The History of Money, by Jack Weatherford

The History of Money covers similiar territory to David Graeber’s Debt: the first 5,000 years. But it is a much less sprawling volume and hence, perhaps, a better introduction to this most vital and elusive of things.

Weatherford focuses in particular on four paradigm shifts in the history of money: From the development of coinage in Lydia around 600 BCE to the establishment of banking in the Middle Ages, to the development of paper money, notably in the American revolution, to the evolution of money into what it principally is today – electronic information.

If this sounds dull it is not. The History of Money is essentially the story of the development of human society and a roll call of some of the blackest episodes arising from our perverse relationship with money.

Weatherford argues convincingly that it was the shift to coinages of precious metal away from local credit systems or commodity money, such as cattle or slave girls, that allowed international trade to develop. From this societies evolved from “honour” or ritual based societies such as Homeric Greece, into market-oriented ones.

Furthermore in assigning coinage values to everything from a goat to a sexual act with a goat, the development of coinage forced humans to develop our capacities for abstract thought. The international trade enabled by coinage prompted the adoption of a common lingua Franca – Greek – across the Mediterranean basin. This in turn allowed for the exchange of new ideas – from those of Socrates to those of Jesus – that the evolution of abstract thought facilitated.

But, as well as identifying how money catalysed these positive evolutions of human society, Weatherford also charts how the love of money is a particularly tenacious root of human evil. He argues that it was a financial crisis in the Roman state in the Third Century, rather than any profound intolerance of beliefs, that prompted first Diocletian’s bloody persecution of the Christians, and then Constantine’s persecution of the pagans: Declaring whole sections of society treasonous allowed the emperors to expropriate their property and replenish the coffers that had grown bare once the Romans had run out of foreign peoples to plunder.

It was avariciousness also that led to the brutal suppression of the Knights Templar: Their often vicious international crusading operations had led to the development of Europe’s first international banking system and an amassing of vast quantities of cash. King Philip of France decided that this money would be better in his hands than that of the Templars. Hence to justify his looting of their loot he concocted a spectacularly lurid set of allegations against them, from Satanism to necrophilia, that continue to fascinate and inspire salacious conspiracy theorists to this day.

Love of silver and gold inspired the Conquistadors to visit genocide and slavery upon the entire indigenous population of South America, and England’s murderous and shameful pillaging of South Asia. It inspires still the global “bad boys” who to this day plunder the planet and devastate the lives of ordinary people to further enhance their personal wealth.

The evolution of paper money brought with it new problems, or perhaps simply old problems in new guises: The debasement of the coinage that Roman emperors undertook in the Third Century, has been replicated in more recent times in the recurrent practice of financially incompetent rulers simply printing more money to pay their bills. From that spiralling inflation results, which disproportionately impoverishes the poor. The continued growth of electronic money is likely to bring new challenges.

In the end of the day money is trust. And, as always, when trust is broken or abused it can wreak devastation.

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