Larry White on the Origins of Coined Money: A Critique

The free banker Larry White has a recent post here on the origins of coined money:

Larry White, “Why the ‘State Theory of Money’ doesn’t explain the Coinage of Precious Metals,” Alt-M Ideas for an Alternative Monetary Future, August 24, 2017.

White is essentially talking about the origins of coined money in ancient Lydia and Greece.

First of all, there are some points in White’s article that may be freely acknowledged as correct, as follows:

(1) Chartalism does not have a universal theory of the origins of money (as defined as a general medium of exchange, unit of account and store of purchasing power) anymore than Neoclassical economics does. But it does have part of the story.

(2) it is true that the theories of certain MMT economists who wish to argue that ancient states chose silver and gold coins only as state-issued tax-anticipation tokens ignores the subjective value that gold and silver did have for human beings. Precious metals were high prestige goods and did obtain value in the market, to some extent, by the subjective value people had for them. So, in this sense, precious metal gold and silver coins were not simply “mere tokens” for the ancients, although some important qualifications can be said about electrum coins, as we will see below.

But now we turn to the flaws in White’s theory.

To begin with, it is empirically wrong to assert that opposition to the Neoclassical/Austrian barter theory of the origins of money is in resurgence just because of Chartalism. In reality, anthropology had already – by the mid-20th century – presented strong evidence against the Austrian/Neoclassical theory, and modern opponents of it are not all necessarily Chartalists.

Secondly, the really serious and empirically dubious claim in White’s argument is his contention that coined money was invented by the private sector in ancient Lydia and Greece:

“An important technical advance came with the introduction and spread of coinage in Turkey and Greece during the 7th to 5th centuries BCE. Unlike raw nuggets straight from the mine or variously refined precious-metal bars, coined pieces of silver and gold gained a major additional advantage: they became (5) uniform in size and quality, so that traders need not incur the cost of testing (or the risk of not testing) each piece for its weight and its fineness (percentage of pure silver or gold content). Early coining entrepreneurs could have profited, as later mint masters in California did, by charging for the service of converting raw silver or gold into easier-to-spend uniform coins. With the spread of coinage to India, the Middle East, and Europe, merchants found silver and gold payments easier to make and to accept. ….

Once sovereigns monopolized the mints they took advantage of the propaganda value of stamping their own faces on the coins, of course. But as far as we know coins were already in use among merchants before that happened. Very early coins from ancient Lydia, in what is now Turkey, were not inscribed with human faces but rather animal figures. The Ancient History Encyclopedia states: ‘It appears that many early Lydian coins were minted by merchants as tokens to be used in trade transactions. The Lydian state also minted coins.’ Regarding Lydian coins inscribed with the names Walwel and Kalil, the British Museum comments: ‘It is unclear whether these are names of kings or just rich men who produced the earliest coins.’ Regarding a nearly contemporary ancient Greek coin bearing the legend ‘I am the badge of Phanes,’ the Museum comments: ‘We cannot be certain who this Phanes was, but it seems that he was placing his badge on coins as a guarantee of their quality.’”
Larry White, “Why the ‘State Theory of Money’ doesn’t explain the Coinage of Precious Metals,” Alt-M Ideas for an Alternative Monetary Future, August 24, 2017.

White is clearly asserting that coined money was invented by the private sector in ancient Lydia and Greece.

But is this true? The evidence for it is feeble at best, and there is much evidence against it.

The first coins were minted in the second half of the 7th century BC (650–600) in what is now western Turkey (what was called “Asia Minor” by the Classical Greeks) in ancient Ionia and within the ancient kingdom of Lydia. Both the ancient writers Xenophanes (as cited in Pollux, Onom. 9.83) and Herodotus (Histories 1.94) report this.

Let us run through the counterarguments to White as follows:

(1) the earliest coins were made of electrum, which was a naturally occurring alloy in ancient Lydia (Kroll 2008: 17–18). The evidence shows that the Lydian kings either controlled the mines in their kingdom directly (Briant 2002: 400), and/or levied taxes on mining or extraction of metals, and indeed a certain Lydian called Pythius under the later Persian empire, who owned a number of mines in Lydia, may have been a descendant of the Lydian royal family who had inherited these mines as private family property (Briant 2002: 401). It follows that, if the Lydian kings extracted and owned much of the silver, gold and electrum (panned from the rivers), it is most probable that the kings also minted the first electrum coinage too, since a large quantity of this metal was needed.

(2) that the “early coins from ancient Lydia, in what is now Turkey, were not inscribed with human faces but rather animal figures” does not provide good evidence against them having been minted by, or for, the Lydian kings: for a long time in the ancient world, coins did not carry any images of living human beings nor writing, and there is no reason why the kings would have bothered to put their images or names on the coins when people at the time knew perfectly well that they had been minted by the state. Early coins of the state mostly depicted gods, seals or other symbols. In Western civilization, one of the first kings to be depicted on coins in his own lifetime was Alexander the Great in the 4th century BC, but centuries after coins had been invented.

(3) it is true that some early Lydian coins carry an inscription, apparently in the Lydian language, and refer to .WALWE. and .KALI. (Schaps 2004: 96). However, the question of who or what these names refers to is not settled at all in modern scholarship. Howgego (1995: 3) suggests that the names may be those of mints, not of individuals. And, even if they do refer to human beings, they could be individuals who minted the coins for the Lydian kings as mint masters (Wallace 1987: 393, n. 51), and this is strongly suggested by the lion symbol which appears on many such early coins, the symbol of the Lydian royal house (Schaps 2004: 96).

(4) it is true we have about four coins with the Greek inscription Φάνεως ειμί σήμα, which can be translated as “I am the badge of Phanes” or “I am the sign of light.” However, as in the case of (3) above, if “I am the badge of Phanes” is the correct translation, it is unclear who this Phanes was. There is a reasonable discussion of the complexities of the issue here.

Kastner (1986) points out that the name may well be that of a god, not a human being (Howgego 1995: 4). Howgego (1995: 4) speculates that even if Phanes was the name of a human being, he might have been an unknown local tyrant or ruler.

So, at best, the evidence for private individuals or merchants being the driving force behind the first minting of coins is feeble.

What is the case for the Lydian kings having minted the earliest electrum coins?

Although it is true that some early 20th-century scholars supported the view that electrum coins were invented by the private merchants, this was strongly criticised by Cook (1958) and Kraay (1964), both of whom made the case that early coins were minted by the Lydian kings or states to pay state expenses, particularly mercenaries.

Early electrum coins did not circulate much beyond the areas where they were minted, and the most common ones were of very high denomination: perhaps worth more than 10 sheep and not useful for small transactions (Cook 1958: 260). If merchants invented early electrum coins, why were they mostly useless for small ordinary commercial transactions in the market? (Schaps 2004: 97; for recent evidence on later smaller denomination coins, see Kim 2002 and Kagan 2006).

R. M. Cook concluded that early electrum coins were minted by the Lydian kings in order to make large payments in a portable and durable form to people owed a large debt by the king, most probably soldiers or mercenaries (Cook 1958: 261).

This view has won large-scale acceptance in modern scholarship. We can take a standard work for reference here: The Oxford Handbook of Greek and Roman Coinage (Oxford and New York, 2012). In this work, Kroll (2012: 44) concludes electrum coins were created by the kings of Lydia. The view is held by Wallace (1987: 386), Osborne (1996: 256), Kim (2001: 10), Whitley (2001: 193), Hornblower et al. (2014: 182), Freeman (2004: 185), and Howgego (1995: 3, noting that no certain evidence in all of antiquity for coins being produced by private individuals).

There are a few dissenters like Holloway (1978), but their arguments, as can be seen from the scant evidence above, are weak. And, while both Schaps (2004: 100) and Seaford (2004: 133) allow some role for private individuals, both concede a large role for the Lydian state in driving the process and being the impetus for it.

Notably, while these early electrum coins had a surprisingly near uniform weight, they were actually variable in their metallic content, and the proportion of gold to silver varied in these coins: for example, one study has found that the silver content of the electrum coins could range from 20% to 75%, which reflected the natural variability of the electrum alloy itself, or even further dilution with extra silver (Wallace 1987: 386).

The near uniform weight but variable metal content of the electrum coins is an important datum. It would have been very difficult for the public to test the true metal content of early electrum coins (Wallace 1987: 392), or indeed small bits of electrum or electrum dust (Kroll 2008: 18). The great difficulty in ascertaining the gold to silver content and metallic value of electrum even before it was coined is actually good evidence against the Mengerian/Neoclassical explanation of its emergence as money.

Given the variable metal content of electrum and difficulties of assessing its value, one cannot easily argue that early merchants invented electrum coins as standardised money with consistent gold and silver value as the most saleable medium of exchange.

Rather, various scholars (see Wallace 1987: 393, Kroll 2012: 44) concluded that the Lydian kings invented electrum coins as a way of standardising the value of individual issues of electrum (despite the variability of the gold to silver content in the coins) by means of a royal seal on the coin, so that this would stabilise their value by accepting the coins back at the same value, presumably as taxes, fines or payments due to the government.

That is to say, the royal stamp was a sign of redeemability at a fixed value (Seaford 2004: 133; Osborne 1996: 256). In the sense that value was not always equal to the metallic content of the coins, electrum coins were fiduciary and state-guaranteed money (Wallace 1987: 393).

These points count against electrum coinage having been an invention of the private sector, because, as we have seen, the difficulty of ascertaining the gold or silver content of electrum coins, or earlier small electrum portions or electrum dust, does not suggest electrum was the most saleable commodity that emerged as money by the barter spot trade.

Instead, it was a royal government that selected electrum as a state-guaranteed money or form of payment, and that could overcome people’s concerns about the actual metal content of the coins by fixing value.

Further Reading
“The Origin of Money and Coinage in Western Civilisation: The Case of Ancient Greece,” April 5, 2013.

“George Selgin versus David Graeber on the Origin of Money,” March 30, 2016.

BIBLIOGRAPHY
Briant, Pierre. 2002. From Cyrus to Alexander: A History of the Persian Empire (trans. Peter T. Daniels). Eisenbraun, Winona Lake, In.

Cook, R. M. 1958. “Speculation on the Origins of Coinage,” Historia 7: 257–262.

Freeman, Charles. 2004. Egypt, Greece and Rome: Civilizations of the Ancient Mediterranean. Oxford University Press, Oxford.

Hall, Jonathan M. 2007. A History of the Archaic Greek World, ca. 1200–479 BCE. Blackwell Publishing, Malden, Mass.

Harris, W. V. (ed.). 2008. The Monetary Systems of the Greeks and Romans. Oxford University Press, Oxford and New York.

Holloway, R. Ross. 1978. “La ricerca attuale sull’origine della moneta,” Rivista italiana di numismatica e scienze affini 80: 7–14.

Hornblower, Simon, Spawforth, Antony and Esther Eidinow (eds.). 2014. Oxford Companion to Classical Civilization. Oxford University Press, New York.

Howgego, Christopher J. 1995. Ancient History from Coins. Routledge, London.

Kagan, J. H. 2006. “Small Change and the Beginning of Coinage at Abdera,” in Peter van Alfen (ed.), Agoranomia: Studies in Money and Exchange Presented to John H. Kroll. The American Numismatic Society. New York. 49–60.

Kastner, Wolfgang. 1986. “‘Phanes’ oder ‘Phano’,” Schiunzerische Numismatische Rundschau 65: 5–11.

Kim, H. S. 2001. “Archaic Coinage as Evidence for the Use of Money,” in Andrew Meadows and Kirsty Shipton (eds.). Money and its Uses in the Ancient Greek World. Oxford University Press, Oxford. 7–21.

Kim, H. S. 2002. “Small Change and the Moneyed Economy,” in P. Cartledge, E. E. Cohen and L. Foxhall (eds.), Money, Labour and Land. Approaches to the Economies of Ancient Greece. Routledge, London and New York. 52–66.

Kraay, C. M. 1964. “Hoards, Small Change and the Origin of Coinage,” Journal of Hellenic Studies 84: 76–91.

Kroll, J. H. 2008. “The Monetary Use of Weighted Bullion in Archaic Greece,” in W. V. Harris (ed.) The Monetary Systems of the Greeks and Romans. Oxford University Press, Oxford and New York. 12–37.

Kroll, John H. 2012. “The Monetary Background of Early Coinage,” in William E. Metcalf (ed.), The Oxford Handbook of Greek and Roman Coinage. Oxford University Press, Oxford and New York.

Osborne, Robin. 1996. Greece in the Making, 1200–479 BC. Routledge, Abindon.

Peacock, M. S. 2006. “The Origins of Money in Ancient Greece: The Political Economy of Coinage and Exchange,” Cambridge Journal of Economics 30: 637–650.

Peacock, Mark. 2013. Introducing Money. Routledge, London.

Price, Martin Jessop. 1983. “Thoughts on the Beginnings of Coinage,” in C. N. L. Brooke et al., Studies in Numismatic Method Presented to Philip Grierson. Cambridge University Press, Cambridge. 1–10.

Seaford, R. 2004. Money and the Early Greek Mind: Homer, Philosophy, Tragedy. Cambridge University Press, Cambridge.

Schaps, D. M. 2004. The Invention of Coinage and the Monetization of Ancient Greece. University of Michigan Press, Ann Arbor.

Wallace, Robert W. 1987. “The Origin of Electrum Coinage,” American Journal of Archaeology 91.3: 385–397.

Whitley, James. 2001. The Archaeology of Ancient Greece. Cambridge University Press, Cambridge.

The Origin of Money and Coinage in Western Civilisation: The Case of Ancient Greece

A recent brouhaha has erupted over this article about the nature of coinage and its minting by the state, which also cites a classic article by Goodhart (1998; reprinted in Goodhart 2003). Libertarians like Robert Murphy are outraged.

While I do not agree with everything said in the original article, it does make the excellent point that coins seem to have been invented by ancient states to “pay soldiers … and then made … the only acceptable currency for paying taxes.” This, along with much other evidence, indicates that there is something wrong with the Mengerian account of money.

The whole debate raises three questions:

(1) what was Menger’s theory of money’s origins?
(2) how did coinage emerge in Western Civilisation in ancient Greece?
(3) did any kind of money exist in ancient Greece before coinage and what was its nature and extent?

I answer these questions below.

I. Menger’s Theory on the Origin of Money
We know people exchange goods for goods in spot transactions (barter). What happens when person A wants a good from person B, but the latter does not want the goods the former has to trade? This is the famous problem of the double coincidence of wants.

Menger notes that commodities have “different degrees of saleableness,” and that the thing we call money has a virtually unlimited saleableness (Menger 1892: 242–243). Yet the differences in degrees of saleableness apply to many other commodities. Many goods once bought cannot be sold again except at a loss (Menger 1892: 244).

But what to do with your excess goods once you have obtained what you immediately want in a barter exchange? What if you are unable to obtain what you want through a direct barter spot transaction? It makes sense for you to obtain goods with a high degree of saleableness, and then exchange these in the wider community at present or in the future. By this process, the most saleable good (or goods) becomes the physical medium of exchange (Menger 1892: 249).

Menger concludes that precious metals have arisen as a medium of exchange among many peoples because “their saleableness is far and away superior to that of all other commodities” (Menger 1892: 252).

Now it will not do to argue (as some internet Austrians do) that all a commodity requires before becoming money is to have a market value in some sense (such as occasional use as a normal barter good). That is not Menger’s argument.

In essence, Menger’s process requires the following steps:

(1) a world of significant barter spot trades;

(2) a commodity used significantly in barter spot trades attains a high degree of saleableness: that is, the proto-money commodity must be held and traded to a significant extent in the market;

(3) the proto-money commodity then emerges in the market as a real and actively exchanged medium of exchange to become money, the dominant good of “virtually unlimited saleableness.”

For Menger, money is, above all, a medium of exchange emerging from active and widespread market exchanges. The “unit of account” function of money arises secondarily from its medium of exchange role.

Apart from the fact that there are severe theoretical and empirical problems with Menger’s theory, which I describe here, does our empirical evidence from ancient Western civilisation confirm this in the case of ancient Greece?

II. Money before Coinage in ancient Greece
Coinage in ancient Greece appeared from 650 to 550 BC. But the question that any Austrian or libertarian defender of Menger’s theory of money would ask is this: was there some type of money before coins in Greece, and did it emerge by Menger’s barter spot trade process?

Before the age of Greek coinage, historians have identified certain goods which seem to have some of the functions of conventional money (but not all). But there was no identifiable metal money, or indeed identifiable money in the strict Mengerian sense.

In short, the state of affairs was this:

(1) cattle or oxen functioned as a largely abstract unit of account (but not a common medium of exchange) and
(2) iron spits might (or might not!) have been a very limited or weak medium of exchange.

Our important evidence for early Greek monetary history comes from the Homeric epics the Iliad and the Odyssey, which were written c. 750–700 BC, and reflect real social practices in the late Dark (or Geometric) Age from c. 1200–800 BC, and early Archaic period (800–480 BC).

In Homer’s epics, cattle or oxen are a type of unit of account, but the actual means of payment tend to be many other types of goods, not just cattle (Peacock 2011: 49–54).

Now one might argue that cattle did become the most common medium of exchange but then receded in importance to become a mere unit of account, but there are serious problems with this view.

First, the emergence of a “cattle/ox” unit of account in Greece appears to be related to religion and cult offerings, not emergence of cattle as the most saleable good (see below).

Secondly, cattle are of rather high value in an agrarian society but cannot be used for small transactions that are often the basis of trade. Cattle are not physically divisible into smaller units (and even conceptually this presents difficulties). Cattle are not always uniform or homogenous either, but come in different ages, breeds, degrees of health, and use. Nor are cattle durable, being mortal animals subject to age and disease, and hardly suited to be a long-term store of value. And finally cattle can be difficult to transport and hardly a very portable good (e.g., do you take one to market or travelling, if you want to buy things?). Will foreign merchants accept cattle for imported goods? What if your cattle run off?

Menger argues that metals are “far and away superior to that of all other commodities” (Menger 1892: 252) for use as money. Although the Greeks did have access to scarce metals such as gold, silver and copper, these do not appear as money in any accepted sense of that term in pre-Classical Greek history, even though the Greeks in private trade had centuries to select some metal as the reigning medium of exchange. But, instead, metal and bullion appear as just another barter good. Yet, according to Menger, metal is what we should expect to have emerged as money being the most saleable good.

So why an ox standard? While cattle no doubt had value in market trades, they were an important sacrificial animal and offering to the gods. The Greeks appear to have developed a cattle or ox unit of account derived from the value these animals had in ritual and sacrifice (Semenova 2011; Seaford 2004: 61; Einzig 1966: 372; Laum 1924). This thesis was put forward by the German scholar Bernhard Laum in Heiliges Geld: eine historische Untersuchung über den sakralen Ursprung des Geldes (1924), and has since won a great deal of acceptance from modern scholars (Semenova 2011: 381). Religious rituals and then temples had a preeminent place in the ancient Greek society, and the city government’s major responsibility was to honour, appease and placate the gods by offering sacrifices. In this sense, the ancient Greek temple and city are not separate entities, but really one and the same. So the emergence of an ox unit of account can be seen as another state-based, institutional process affecting economic life.

As we have seen, cattle seem unfitted under Mengerian theory to be a money commodity. But the ox acquired an importance over and above its mere agricultural use or commercial exchange value, because not only was it a crucial sacrificial animal, but also a means of payment for the services of priests (Semenova 2011: 385).

Priests needed to be paid in cattle for religious services, but it was soon also necessary to calculate the ox-value of other commodities offered for payment to temples or for sacrifice in lieu of oxen (Semenova 2011: 385): hence people came to develop “prices” of other goods in terms of oxen, and an ox unit of account emerged (see Schaps 2004: 9–10; Laum 1924; Heidel 1926; Peacock 2011: 54–63; Peacock 2003–2004).

What has provided crucial evidence of the link is the correspondence between (1) numbers of oxen used in sacrifices and (2) the monetary value of goods in terms of oxen as described in Homeric texts:

“what is so peculiar about Homeric valuation of things in terms of cattle (‘worth a hundred cattle,’ ‘worth ninety cattle’) is the correspondence between the numbers of cattle quoted as the value of various objects to the numbers of cattle sacrificed in Homeric sacrificial rituals (Seaford 2004: 61). More specifically, the numbers of oxen sacrificed are usually hundred, twenty, twelve, nine, four and one. But these units are also the customary units of value in the Iliad and Odyssey (Einzig [1949] 1966: 382; Seaford 2004: 61). This means that there is a distinct connection between the customized numbers of sacrificial victims and the specific quantities of oxen (the specific numbers of the ox-units) in terms of which the worth of various goods was estimated.” (Semenova 2011: 385).

But oxen were not generally used as a physical medium of exchange: they did not emerge as a unit of account from being the most saleable commodity in real and widespread barter spot trades. This is not consistent with Menger’s theory.

Instead, other goods like items associated with sacrifice of oxen such as tripods, cauldrons, double-axes, and spits were used as a means of payment as well as other metal objects (Schaps 2004: 10), all of which were measured in a cattle unit of account. (As an aside, some early fines in Greek city states appear to have been payable in tripods and cauldrons too.) One must also recognise that pre-Classical Greece was a society where gift exchange was an important activity alongside commercial exchange. Some objects were high prestige goods functioning as “gifts” that were neither traded nor “consumed”; instead, gifts were stored and then offered again to a new party as a gift.

What existed in pre-Classical Greece was an economy with an almost abstract unit of account where actual payment could, and usually was, made in many different kinds of goods through conventional barter exchange (and with gift exchange and debt/credit exchange in goods).

The second development of a type of possible proto-money alongside the cattle unit of value was the iron spit (or oboloi). Iron spits were employed to roast bull’s flesh in religious/state sacrificial meals and then used to distribute the meat to the public citizenry. Iron spits appear as dedications in Greek temples and tombs, but they might have had a very limited role as a proto-medium of exchange from the late 8th (or early 7th) to the 6th centuries BC (Seaford 2004: 103–104). But the trouble here is that they never seem to have acquired any universal or even significant medium of exchange value, and still seem to have been used alongside other commonly bartered objects like tripods and cauldrons (Schaps 2004: 85–88; Schaps concludes that spits were just used in barter trade). Spits were not useful for anything more than local barter, and probably useless for international or long-distance trade. Even on the most generous interpretation of the evidence, they can only have been a type of weak proto-money, which never emerged as a real “money thing.” And their religious or sacrificial use suggests a partial non-commercial source of their value anyway in temples, gift exchange, and bride price (Schaps 2004: 87); in other words, they could be a type of non-commercial money familiar from other cultures.

The Mengerian apologists might seize on these points and counter that none of these things discussed above are in fact money in their proper definition of that term; therefore Menger is not refuted. But that has the following consequence: the emergence of coinage is in fact the story of the origin of true money in ancient Greece.

Curiously, heterodox economists might agree that, strictly speaking, there was no widely-used physical good with all the threefold functions of money – as a medium of exchange, store of value, and unit of account – coalescing into a full-bodied money-thing in pre-Classical Greece. But, if one wants to argue this, again the consequences are quite clear:

“In sum, the Homeric world has no money-thing, that is, an object which answers to the description of money. Certain things perform certain functions, e.g., cattle (standard of value) and prestige objects (store of value) but neither performs the role of means of exchange or payment. Only in the Classical Period does a money-thing, coinage, come into existence.” (Peacock 2006: 642).

So what was the origin of coins?

III. The Origin of Coins
The first coins were minted in the second half of the 7th century BC (650–600) in what is now western Turkey (what was called “Asia Minor” by the Classical Greeks) in ancient Ionia and Lydia. Both the ancient writers Xenophanes (as cited in Pollux, Onom. 9.83) and Herodotus (Histories 1.94) report this.

These earliest coins consisted of stamped pieces of electrum with a roughly uniform weight in large numbers. Their value was large: about ten sheep. That is, they were of large denomination: perhaps worth more than 10 sheep and not useful for small transactions (Cook 1958: 260).

The scholar R.M. Cook long ago concluded that:

“From all this it may reasonably be inferred that coinage was invented to make a large number of uniform payments of considerable value in a portable and durable form, and that the person or authority making the payment was the king of Lydia. One solution suggests itself, that the purpose of coinage was the payment of mercenaries.” (Cook 1958: 261).

A reconstruction from the evidence is as follows: royal paymasters of mercenaries began to prepare electrum in lumps or shapes of uniform weight, instead of weighing out electrum pellets or dust as payment. Then the lumps were given uniform shape and marked with some sign and finally an official seal. Thus coins came into existence as the means for paying wages, but as a type of large pay packet for medium to long-term service (Cook 1958: 261).

At this point, the libertarian or Mengerian critic might question whether the earliest coins from Lydia were really minted by the state.

Glasner (1989: 30) contends that since these earliest coins had no names of Lydian kings “we can safely conclude that they were privately minted.” Yet that is a highly dubious argument. For a long time, coins did not carry writing at all, and there is no reason why the kings would have bothered to write their names on the coins when people at the time knew perfectly well that they had been minted by the state. Nor did early coins carry images of the living king: they mostly depicted gods, seals or other symbols. In Western civilization, one of the first kings to be depicted on coins was Alexander the Great in the 4th century BC, but centuries after coins had been invented.

Moreover, the evidence suggests that the Lydian kings either controlled the mines in their kingdom (Briant 2002: 400) or levied taxes on mining or extraction of metals (indeed a certain Lydian called Pythius under the later Persian empire, who owned a number of mines in Lydia, may have been a descendant of the Lydian royal family who had inherited these mines as private family property [Briant 2002: 401]), and it follows that, if they extracted and owned much of the silver, gold and electrum (panned from the rivers), it is most probable that the kings also minted the first electrum coins too.

Coinage spread to mainland Greece around 575 to 550 BC (or the second quarter of the 6th century). The numismatist C. M. Kraay looked at a wider sample of evidence from the whole Greek world and concluded that,

“since most coinages were not exported, and since those that were exported were not among the earliest coinages, the original intention in striking coins was not to facilitate foreign trade, or to provide merchants with a means of purchasing goods or materials not available locally. …. We must conclude that coinage [sc. ancient Greece] was not devised to meet the needs of foreign trade, and that, in so far as it came to do so, this was a secondary development.” (Kraay 1964: 89).

In addition, it does not seem that coins were introduced to facilitate internal trade either, for most states lacked enough small denomination coinage or had no coinage at all, and coinage had originated in Asia Minor and Lydia in large denominations too large for daily and normal retail trade (Kraay 1964: 89).

Everywhere one finds coinage in the early Greek world it has the stamp of the public authority: the issuing government or city state (Kraay 1964: 89).

The purpose of issuing coins appears to be bound up with both government taxation and expenditure: on the one hand, demand for harbour dues, fines and penalties in law codes (as law became increasing public, not private), and taxes, and on the other hand spending of the state on pay to mercenaries or soldiers, salaries to state employees, festivals (both secular and religious) and expenditure on public works (for wages and materials used) (Kraay 1964: 89).

Previously, payments to and from the state may have been made in kind, but as economies become more complex this itself became inconvenient. What was needed was a standard unit of value.

Although bullion was a high prestige commodity, there is no convincing evidence that it functioned as a common medium of exchange before coinage, first because it was rare and secondly because it was not easily divisible into uniform and small enough amounts. What certain kinds of bullion or metal did provide was weight units. The monetary unit of classical Athens, for example, was the drachma. It seems to have emerged as a reformed weight unit – that is, a pre-monetary metal weight unit – used as a common standard for assessing tax payments in kind to the state (Horsmann 2000; von Reden 2002: 153).

The Lydian state first adopted large denomination coins to make payments to soldiers and demanded coins back in tax obligations, and in this manner that coin unit emerged as money. But notice how the process violates the standard Mengerian account of the origin of money: electrum was not already functioning as a common medium of exchange by having emerged as the most saleable commodity in the marketplace.

Before Lydian coinage, a metal like electrum was a high prestige object and was simply one of many goods used in conventional barter trades: there is no convincing evidence that it was the reigning medium of exchange (money) that had already emerged as the most saleable good in spot barter trades.

Instead, electrum was a high prestige commodity selected by the state, standardised and used as a form of payment as wages. Its subsequent rise in market trades on a significant, but still (compared to modern money) limited scale as a common medium of exchange was then induced by the exchange of these coins for goods by soldiers, and the need to acquire the coins themselves to pay taxes. Prices for goods were created as a result of both the state payment of, and demand for, coins. That is, economies with previous barter, gift exchange and extensive debt/credit exchanges in kind were monetised by the state creation of coined money and the state demand for the coins, owing to taxes and other obligations (Peacock 2006: 644).

Furthermore, the earliest coins already seem to have been fiduciary to some extent, in the sense that the conventional (or nominal) value could be somewhat higher than their intrinsic value (Peacock 2006: 643, citing Price 1983: 5 and Wallace 1987: 393). People tended to count coins, not weigh them out (Peacock 2006: 643). What provided the major inducement for acceptance of official, stamped coins was the demand for them to pay taxes, fines and obligations to the state.

Another telling factor is that in many Greek states coins appear to have largely stayed within their national or city state boundaries (Kraay 1964: 90), because this was where the major demand for coins was: again both from the state itself and from citizens and non-citizens having to pay obligations to the state. Curiously, the one of two exceptions was the Athenian silver coinage, which became a type of international reserve currency by the 5th century BC, but because of (1) the overwhelming military and imperial power of classical Athens with its overseas empire and exaction of taxes and tribute from its allies and subject states and (2) the sheer good fortune that Athens was blessed with very productive silver mines.

In general, even by the 6th and 5th centuries BC numismatists have noticed that few areas of the Greek world seem to have had sufficient, lower denomination stocks of coins to meet the ordinary requirements of daily trade and commerce (Kraay 1964: 88). The only exceptions are Athens, Aegina and Ionia, whose economies appear to have been monetised to a greater degree than elsewhere (Kraay 1964: 88; Kim 2002). More recent modification of Kraay’s thesis by Kagan (2006) and Kim (2001 and 2002) does not overturn his fundamental point (Kurke 1999: 8).

IV. Conclusion
In pre-Classical Greece, no definitive “money thing” is found. At most, we have, firstly, a good (cattle) which only partially fulfills the functions of money by being a unit of account, and secondly a good (iron spits) that might (even on the most generous view) have performed a proto-money function as a medium of exchange to a limited extent (but the evidence is weak and it may have been no more than another prestige good used in barter).

But if one denies that either of these were real money, then the origin of money in Western civilisation is the invention of coinage. And coinage was an invention of the state.

Advanced monetised economies developed as the demand for money expanded though the need to have coins to pay taxes and obligations. The state itself provided the money in payments to the community. While one can point to other cases where Menger’s theory might have some empirical support (a fact recognised even by the critical David Graeber [2011: 75]), this is not one of them. In this very important case, Menger’s theory has been tried and found wanting.

FURTHER READING
My list of posts on the origins of money are below:

“Debate on the Origin of Money,” August 25, 2012.

“The Origin of Money in the Digest of Justinian,” August 21, 2012.

“Alfred Mitchell Innes on the Credit Theory of Money,” March 24, 2012.

“A Note on Menger on the Nature and Origin of Money,” July 28, 2012.

“Philip Grierson on the Origin of Money,” March 21, 2012.

“Observations on Non-Commercial Money,” February 18, 2012.

“Money as a Unit of Account and its Origins,” February 11, 2012.

“Quiggin on the Origin of Money,” February 10, 2012.

“David Graeber on Debt and Money, Part 2,” February 9, 2012.

“David Graeber versus Robert Murphy: A Review,” January 24, 2012.

“David Graeber on the Origins of Money,” January 23, 2012.

“Bibliography on the Origins of Money,” January 19, 2012.

“Alla Semenova on the Origins of Money,” January 15, 2012.

“Mises on the Origin of Money,” January 12, 2012.

“The Origins of Money,” January 8, 2012.

“Menger on the Origin of Money,” January 5, 2012.

“Money as Debt,” December 26, 2011.

“David Graeber’s Response to Robert Murphy,” September 9, 2011.

“The Origin of Coinage in Ancient Greece,” April 29, 2011.

BIBLIOGRAPHY

Briant, Pierre. 2002. From Cyrus to Alexander: A History of the Persian Empire (trans. Peter T. Daniels). Eisenbraun, Winona Lake, In.

Cook, R.M. 1958. “Speculation on the Origins of Coinage,” Historia 7: 257–262.

Einzig, P. 1966 [1949]. Primitive Money in its Ethnological, Historical and Economic Aspects. Eyre and Spottiswoode, London.

Glasner, David. 1989. Free Banking and Monetary Reform. Cambridge University Press, Cambridge.

Goodhart, C. A. E. 1998. “The Two Concepts of Money: Implications for the Analysis of Optimal Currency Areas,” European Journal of Political Economy 14.3: 407–432.

Goodhart, C. A. E. 2003. “Two Concepts of Money: Implications for the Analysis of Optimal Currency Areas,” in S. A. Bell and E. J. Nell (eds.), The State, the Market, and the Euro: Chartalism versus Metallism in the Theory of Money. Edward Elgar, Cheltenham. 1–25.

Graeber, D. 2011. Debt: The First 5,000 Years. Melville House, Brooklyn, N.Y.

Heidel, W. A. 1926. “Heiliges Geld, eine historische Untersuchung über den sakralen Ursprung des Geldes by Bernhard Laum” (Review), Classical Philology 21.2: 191–192.

Horsmann, G. 2000. “Athens Weg zur eigenen Währung: Der Zusammenhang der metrologischen Reform Solons mit der timokratischen,” Historia 49: 259–277.

Kagan, J. H. 2006. “Small Change and the Beginning of Coinage at Abdera,” in Peter van Alfen (ed.), Agoranomia: Studies in Money and Exchange Presented to John H. Kroll. The American Numismatic Society. New York. 49–60.

Kim, H. S. 2001. “Archaic Coinage as Evidence for the Use of Money,” in Andrew Meadows and Kirsty Shipton (eds.). Money and its Uses in the Ancient Greek World. Oxford University Press, Oxford. 7–21.

Kim, H. S. 2002. “Small Change and the Moneyed Economy,” in P. Cartledge, E. E. Cohen and L. Foxhall (eds.), Money, Labour and Land. Approaches to the Economies of Ancient Greece. Routledge, London and New York. 52–66.

Kurke, Leslie V. 1999. Coins, Bodies, Games, and Gold: The Politics of Meaning in Archaic Greece. Princeton University Press, Princeton, NJ.

Kraay, C. M. 1964. “Hoards, Small Change and the Origin of Coinage,” Journal of Hellenic Studies 84: 76–91.

Kraay, Colin M. 1976. Archaic and Classical Greek Coins. University of California Press, Berkeley, Calif.

Kroll, J. 1998. “Silver in Solon’s Laws,” in R. Ashton and S. Hurter (eds.), Studies in Greek Numismatics in Memory of Martin Jessop Price. Spink, London. 225–232.

Laum, B. 1924. Heiliges Geld: eine historische Untersuchung über den sakralen Ursprung des Geldes. Mohr, Tübingen.

Martin, T. 1996. “Why Did the Greek Polis originally need Coins,” Historia 45: 257–283.

Menger, C. 1892. “On the Origin of Money,” Economic Journal 2: 238–255.

Peacock, M. S. 2003–2004. “State, Money, Catallaxy: Underlaboring for a Chartalist Theory of Money,” Journal of Post Keynesian Economics 26.2: 205–225.

Peacock, M. S. 2006. “The Origins of Money in Ancient Greece: The Political Economy of Coinage and Exchange,” Cambridge Journal of Economics 30: 637–650.

Peacock, M. S. 2011. “The Political Economy of Homeric Society and the Origins of Money,” Contributions to Political Economy 30: 47–65.

Peacock, M S. 2013. “Accounting for Money: The Legal Presuppositions of Money and Accounting in Ancient Greece,” Business History 55.2: 280–301.

Price, M. J. 1983. “Thoughts on the Beginnings of Coinage,” in C. N. L. Brooke et al. (eds.), Studies in Numismatic Method Presented to Philip Grierson. Cambridge University Press, Cambridge and New York. 1–10.

Redish, A. 1992. “Coinage, Development of,” in P. Newman, M. Milgate and J. Eatwell (eds.), The New Palgrave Dictionary of Money and Finance (vol. 1). Macmillan, Basingstoke. 376–378.

Seaford, R. 2004. Money and the Early Greek Mind: Homer, Philosophy, Tragedy. Cambridge University Press, Cambridge.

Schaps, D. M. 2004. The Invention of Coinage and the Monetization of Ancient Greece. University of Michigan Press, Ann Arbor.

Schaps, D. M. 2008. “What Was Money in Ancient Greece?,” in W. V. Harris (ed.), The Monetary Systems of the Greeks and Romans. Oxford University Press, Oxford. 38-48.

Semenova, A. 2011. “Would You Barter With God? Why Holy Debts and not Profane Markets Created Money,” American Journal of Economics and Sociology 70.2: 376–400.

von Reden, S. 2002. “Money in the Ancient Economy: A Survey of Recent Research,” Klio 84.1: 141–174.

Wallace, R. 1987. “The Origin of Electrum Coinage,” American Journal of Archaeology 91: 385–397.

Keynes on Metallism versus Chartalism in 1914

There is a most interesting book review, now almost forgotten, written by John Maynard Keynes and published in 1914, in which Keynes reviews both the original German edition of Ludwig von Mises’s Theorie des Geldes und der Umlaufsmittel (Theory of Money and Credit; Munich and Leipzig, 1912), and Geld und Kapital (Money and Capital; Leipzig, 1912) by the German Chartalist Friedrich Bendixen (see Keynes 1914a).

The Chartalist theory of money derived from Georg Friedrich Knapp’s Staatliche Theorie des Geldes (The State Theory of Money; original German edition 1905; English translation 1924), which has been one of the important sources of recent Chartalism or Modern Monetary Theory.

Although Keynes was not hostile to Mises, nevertheless it is clear from his view of Bendixen’s book that Keynes already repudiated the Metallist position on money and was receptive to Knapp’s Chartalism. Keynes says:

“[sc. Bendixen says that the] … old ‘metallist’ view of money is superstitious, and Dr. Bendixen trounces it with the vigour of a convert. Money is the creation of the State; it is not true to say that gold is international currency, for international contracts are never made in terms of gold, but always in terms of some national monetary unit; there is no essential or important distinction between notes and metallic money; money is the measure of value, but to regard it as having value itself is a relic of the view that the value of money is regulated by the value of the substance of which it is made, and is like confusing a theatre ticket with the performance. With the exception of the last, the only true interpretation of which is purely dialectical, these ideas are undoubtedly of the right complexion. It is probably true that the old ‘metallist’ view and the theories of regulation of note issue based on it do greatly stand in the way of currency reform, whether we are thinking of economy and elasticity or of a change in the standard; and a gospel which can be made the basis of a crusade on these lines is likely to be very useful to the world, whatever its crudities or terminology.” (Keynes 1914a: 418).

Keynes (1914b) also published in 1914 a positive review of Mitchell Innes’s 1913 essay “What is Money?” Keynes (1914b: 421) even said explicitly in this latter review that he thought that Innes’s “historical conclusions ... have, I think, much foundation.”

So Keynes the monetary reformer was already moving to the Chartalist and credit theories of money by 1914, only a few years after he had begun lecturing in economics at Cambridge university in January 1909 (for Keynes’s education and emergence as an economist, see my post here).

BIBLIOGRAPHY

Bendixen, Friedrich. 1912. Geld und Kapital, Duncker & Humblot, Leipzig.

Keynes, J. M. 1914a. “Theorie des Geldes und der Umlaufsmittel. by Ludwig von Mises; Geld und Kapital. by Friedrich Bendixen” (review), Economic Journal 24.95 (Sep.): 417–419.

Keynes, J. M. 1914b. “What is Money? by A. Mitchell Innes” (review), Economic Journal 24.95 (Sep.): 419–421.

Knapp, G. F. 1905. Staatliche Theorie des Geldes, Duncker & Humblot, Leipzig.

Knapp, G. F. 1973 [1924]. The State Theory of Money (trans. H. M. Lucas and J. Bonar), Augustus M. Kelley, Clifton, NY.

Mises, L. von. 1912. Theorie des Geldes und der Umlaufsmittel, Duncker & Humblot, Munich and Leipzig.

Mitchell Innes, A. 1913. “What is Money?,” Banking Law Journal 30.5 (May): 377–408.

The History of Modern Monetary Theory

My last post got a bit hijacked by my attempt to write a digression on the origin of Modern Monetary Theory (MMT), which has also been called Chartalism, neo-Chartalism, the Kansas City approach, and soft currency economics. It strikes me that the subject deserves a post in its own right, so I will attempt one here (bear in mind there is some repetition).

Chartalism in the historical sense should be distinguished from Modern Monetary Theory. Chartalism was a theory of money developed by Georg Friedrich Knapp (1905; English translation 1924), which he called the “state theory of money.” This was taken up by Keynes in his Treatise on Money (1930). It appears to me that economists in the late 20th century associated with Post Keynesianism revived Chartalism as a theory, with the work of Alfred Mitchell-Innes (1913 and 1914) on credit money, including Charles A. E. Goodhart (although, strictly speaking, Goodhart does not regard himself as a Post Keynesian; see Goodhart 2005: 817).

Chartalism has been one source of MMT, and an early proponent L. Randall Wray appears to have used the term to describe the macrotheory he was developing. Randall Wray states:

“... somehow [sc. Chartalism] ... got the name Modern Money Theory. We think the first time those exact words were used might have been in a comment to Bill’s blog in 2007; if anyone can find that comment or a previous use, please send it along. It also looks like Bill used the term “modern monetary theory” in an academic paper in 2008.”
L. Randall Wray, “MMP Blog #30: What is Modern Money Theory?,” January 1, 2012.

The broader sources of Modern Monetary Theory are as follows:

(1) G. Frederick Knapp’s work (1905; 1973 [1924]);
(2) Mitchell Innes’s work (1913; 1914).
(3) Keynes;
(4) Abba Lerner’s functional finance model (1943; see also Lerner 1944; 1947; 1951);
(5) Post Keynesianism (with influence from both Keynes and Michał Kalecki), and
(6) Hyman Minsky’s work (e.g., the employer of last resort idea and the financial instability hypothesis).

Economists who stand out as inventors of Modern Monetary Theory include L. Randall Wray (1998), William F. “Bill” Mitchell, and Warren Mosler.

L. Randall Wray explains the origin of MMT:

“[sc. the origin of MMT] ... goes back to PKT (Post Keynesian Thought) in the early 1990s—the first internet discussion group I ever heard of. It started off with all the stars of heterodox economics—Paul Davidson, Herb Gintis, Michael Perelman, Ed Nell; even Hyman Minsky contributed a post or two. And then there was ... Bill Mitchell ... He had little tolerance for Keynes but otherwise I found myself agreeing with him more often than with anyone else. On Kalecki, on Marx, on fiscal policy, and especially against the Austrians that were slowly but surely killing PKT.

And one other guy stood out—a hedge fund manager named Warren Mosler who was continually pushing two things. First there was something he called soft currency economics. It sounded to me like good old Keynesian economics from the Treatise on Money, which followed Knapp’s state theory of money. ....

What Warren also added was a much deeper understanding of bank reserves and treasury bonds. I came at this from the PK endogenous money, horizontal reserves view of Basil Moore. There’s nothing seriously wrong with that, but it never understood why a sovereign government would sell bonds. Warren explained bond sales as a reserve drain, and lightbulbs went off. Exactly right: government sells bonds to hit the overnight interest rate target. I think it was Mat Forstater who brought the final piece of the puzzle: Lerner’s functional finance approach.”

Wray, L. R. 2011. “MMT: A Doubly Retrospective Analysis,” December 11.

By 1995, Warren Mosler called his theory “soft currency economics.” I quote Warren Mosler:

“The origin of MMT is ‘Soft Currency Economics’ .... I had never read or even heard of Lerner, Knapp, [Innes], Chartalism, and only knew Keynes by reading his quotes published by others. I ‘created’ what became know as ‘MMT’ entirely independently of prior economic thought. It came from my direct experience in actual monetary operations ... .”
http://mmtwiki.org/wiki/History_of_MMT

Mosler, as I understand it, has a connection with Paul Davidson (see also this interview for Mosler’s passing remarks about Charles Goodhart and the LSE). One of Mosler’s early publications was published in the Journal of Post Keynesian Economics (Mosler 1997-1998: 167-182).

Chartalism clearly was an important influence on other Modern Monetary Theory economists, but MMT, as it now exists, goes well beyond the original theories of Knapp or Mitchell-Innes.

The leading proponents of MMT hold that it is now an independent macroeconomic theory (by contrast, the Cambridge Post Keynesian Mark Hayes regards MMT as a sub-branch of Post Keynesianism). At the very least, Post Keynesianism can be regarded as the important macro-theory that stands behind MMT as one of its intellectual fathers, so to speak.

Perhaps it is even possible to think of MMT economists as a new generation of Post Keynesians—that is, as a younger generation that has developed Post Keynesian theory in new ways.

Appendix
I will end this post with a list of advocates and supporters of MMT (mainly academics):

Warren Mosler
Randall Wray
Bill Mitchell
Pavlina Tcherneva
Stephanie A. Kelton (formerly Stephanie Bell)
Mat Forstater
Ed Nell
Scott Fullwiler
Mike Norman

BIBLIOGRAPHY

Bell, S. 2000. “Do Taxes and Bonds Finance Government Spending?,” Journal of Economic Issues 34.3: 603-620.

Goodhart, C. A. E. 2005. “What is the Essence of Money?” (Reviewing: Geoffrey Ingham, The Nature of Money, Polity, Cambridge, 2004), Cambridge Journal of Economics 29: 817–825.

Keynes, J. M. 1930. A Treatise on Money, Macmillan, London.

Knapp, G. F. 1905. Staatliche Theorie des Geldes, Duncker & Humblot, Leipzig.

Knapp, G. F. 1918. Staatliche Theorie des Geldes (2nd edn.), Duncker & Humblot, Munich and Leipzig.

Knapp, G. F. 1921. Staatliche Theorie des Geldes (3rd edn.), Duncker & Humblot, Munich and Leipzig.

Knapp, G. F. 1973 [1924]. The State Theory of Money (trans. H. M. Lucas and J. Bonar), Augustus M. Kelley, Clifton, NY.

Lerner, A. P. 1943. “Functional Finance and the Federal Debt,” Social Research 10: 38–51.

Lerner, A. P. 1944. The Economics of Control, New York, Macmillan.

Lerner, A. P. 1947. “Money as a Creature of the State,” American Economic Review 37.2: 312–317.

Lerner, A. P. 1951. The Economics of Employment, New York, McGraw Hill.

Mitchell, Bill, 2011. “MMT is Biased Towards Anti-Crony,” December 28.
http://bilbo.economicoutlook.net/blog/?p=17528#more-17528

Mitchell, W. and J. Muysken. 2008. Full Employment Abandoned: Shifting Sands and Policy Failures, Edward Elgar, Cheltenham.

Mitchell-Innes, A. 1913. “What is Money?,” Banking Law Journal 30.5 (May): 377–408.

Mitchell-Innes, A. 1914. “The Credit Theory of Money,” Banking Law Journal 31.2 (January–December): 151-168.

Mosler, W. 1995. “Soft Currency Economics,”
http://www.mosler.org/docs/docs/soft0004.htm

Mosler, W. 1997-1998. “Full Employment and Price Stability,” Journal of Post Keynesian Economics 20.2: 167-182.

Mosler, W. 2010. The Seven Deadly Innocent Frauds of Economic Policy, Valance Co., St Croix, U.S.V.I.
http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

Wray, L. R. 1998. Understanding Modern Money: The Key to Full Employment and Price Stability, Edward Elgar, Cheltenham.

Wray, L. R. 2011. “MMT: A Doubly Retrospective Analysis,” December 11.
http://neweconomicperspectives.blogspot.com/2011/12/mmt-doubly-retrospective-analysis.html

The Origin of Coinage in Ancient Greece

A short post. I note that someone has brought up the issue of the origin of money in comments on an earlier post. I will say that the specialist literature on the origin of coinage in the ancient Greco-Roman world confirms the chartalist theory of the origin of money:

“Numismatists believe that the earliest coins were produced at Lydia (now Western Turkey) in the mid-seventh century BC. The coins were made of electrum, a naturally occurring alloy of gold and silver. They had a design on one side and were of uniform weight but had a highly variable proportion of gold. In an influential article Cook (1958) argued that these coins were introduced to pay mercenaries, a thesis modified by Kraay (1964) who suggested that governments minted coins to pay mercenaries only in order to create a medium for the payment of taxes …”

Redish (1992), quoted in C. A. E. Goodhart, “Two Concepts of Money: Implications for the Analysis of Optimal Currency Areas,” in S. A. Bell and E. J. Nell (eds), The State, the Market, and the Euro: Chartalism versus Metallism in the Theory of Money, Edward Elgar, Cheltenham. p. 7.

One can also read the interesting review article by Peacock (2006), who concludes:

“the state’s role in the development of coinage is undisputed … Coinage was not an endogenous development of the economic sphere, as Menger held, nor was it created merely in order to facilitate trade which had existed thousands of years before money and was in no need of facilitation” (Peacock 2006: 642).

The reason that coinage became a widely-accepted medium of exchange and unit of account was that the state demanded its issued coin back for payment of taxes and other payments to the state, such as harbour dues and fines. This process is what monetized the economy and encouraged the use of coinage as a medium of exchange.


BIBLIOGRAPHY

Cook, R.M. 1958. “Speculation on the Origins of Coinage,” Historia 7: 257–262.

Goodhart, C. A. E. 2003. “Two Concepts of Money: Implications for the Analysis of Optimal Currency Areas,” in S. A. Bell and E. J. Nell (eds), The State, the Market, and the Euro: Chartalism versus Metallism in the Theory of Money, Edward Elgar, Cheltenham. 1–25.

Kraay, C. M. 1964. “Hoards, Small Change and the Origin of Coinage,” Journal of Hellenic Studies 84: 76–91.

Peacock, M. S. 2006. “The Origins of Money in Ancient Greece: The Political Economy of Coinage and Exchange,” Cambridge Journal of Economics 30: 637–650.

Redish, A. 1992. “Coinage, development of,” in P. Newman, M. Milgate and J. Eatwell (eds), The New Palgrave Dictionary of Money and Finance, vol. 1, Macmillan, Basingstoke. 376–378.


FURTHER BIBLIOGRAPHY
For anyone interested in this subject, here is a longer list of the specialist literature.

Bresson, A. 2005. “Coinage and money supply in the Hellenistic Age,” in Z. H. Archibald, J. K. Davies and V. Gabrielsen (eds), Making, Moving and Managing. The New World of Ancient Economies, 323– 31 BC, Oxbow Books, Oxford. 44–72.

Cook, R.M. 1958. “Speculation on the Origins of Coinage,” Historia 7: 257–262.

Figueira, T. J. 2006. Review of Seaford 2004. Classical World 99.4: 467–468.

Goodhart, C. A. E. 2003. “Two Concepts of Money: Implications for the Analysis of Optimal Currency Areas,” in S. A. Bell and E. J. Nell (eds), The State, the Market, and the Euro: Chartalism versus Metallism in the Theory of Money, Edward Elgar, Cheltenham. 1–25.

Henry, J. 2004. “The Social Origins of Money,” in L. R. Wray (ed.), Credit and State Theories of Money, Edward Elgar, Cheltenham. 79–98.

Hudson, M. 2003. “The Creditary/Monetarist Debate in Historical Perspective,” in S. A. Bell and E. J. Nell (eds), The State, the Market, and the Euro: Chartalism versus Metallism in the Theory of Money, Edward Elgar, Cheltenham. 39–76.

Hudson, A. M. 2004. “The Archaeology of Money,” in L. R. Wray (ed.), Credit and State Theories of Money, Edward Elgar, Cheltenham. 99–127

Ingham, G. 2000. “‘Babylonian Madness’: on the Historical and Sociological Origins of Money,” in J. Smithin (ed.), What is Money?, Routledge, London and New York. 16–41.

Kraay, C. M. 1964. “Hoards, Small Change and the Origin of Coinage,” Journal of Hellenic Studies 84: 76–91.

Oliver, G. 2006. “Coinage,” in N. G. Wilson (ed.), Encyclopedia of Ancient Greece, Routledge, New York and London. 174–176.

Peacock, M. S. 2006. “The Origins of Money in Ancient Greece: The Political Economy of Coinage and Exchange,” Cambridge Journal of Economics 30: 637–650.

Seaford, R. 2004. Money and the Early Greek Mind: Homer, Philosophy, Tragedy, Cambridge University Press, Cambridge.

Schaps, D. M. 2007. Review of Seaford 2004. Classical Review n.s. 57: 10–12.

Schaps, D. M. 2003. Review of Georges Le Rider, La naissance de la monnaie: Pratiques monétaires de l’Orient ancient (Presses Universitaires de France, Paris, 2001), Bryn Mawr Classical Review 2003.12.13, http://bmcr.brynmawr.edu/2003/2003-12-13.html

Schaps, D. M. 2004. The Invention of Coinage and the Monetization of Ancient Greece, University of Michigan Press, Ann Arbor.

von Reden, S. 2002. “Money in the ancient economy: A survey of recent research,” Klio 84.1: 141–174.

Wray, L. R. 1998. Understanding Modern Money: The Key to Full Employment and Price Stability, Edward Elgar, Cheltenham, 1998.

Wray, L. R. 2003. “Money,” in J. E. King (ed.), The Elgar Companion to Post Keynesian Economics, Edward Elgar, Cheltenham, UK and Northhampton, MA, USA. 261–265.