Review of a book by Nicola Parise, Donzelli Editore, Rome, 2000
La Nascita
Della Moneta — Segni Premonetari e forme arcaiche dello scambio
(The
Birth of Money — Pre-monetary tokens and archaic forms of exchange)
by
William
Krehm
Under our very eyes, the essence of money is undergoing change. Time was when money, in the form of gold or silver or notes issued by a government, earned no interest by the mere fact of its existence. Giving off interest was a function of debt denominated in one currency or another, but not of the currency itself. That contributed to the relative stability of currencies for it made them less dependent on current interest rates. Today, since all currency is lent into existence and thus bears interest, the value of existing debt is doubly interest-sensitive: once since a rise in interest rates depresses the value of previously issued debt, and again due to the higher exchange value of the domestic currency due to increased foreign demand for it.
The time has come for rethinking the very nature of money. An interesting contribution to this is being made by studies in the literature of ancient Greece, particularly of the Homeric poems. One overriding conclusion: rather than a natural phenomenon, money is a social product, and like society itself, its nature is constantly undergoing change. And this was often determined by factors quite other than trade. More remarkable still, some of these researches help us understand aspects of the changing role of money today.
“Louis Gernet1 sees in the difference between symbol and token that the first is imbued with direct emotional power, whereas the latter has to do with broader social usages. If so, the origins of money would largely evolve from symbol to token. The research of Gernet on the pre-monetary attempts in ancient Greece to find a measure of universal value remind us of M. Mauss’s Essay on Gifting amongst ‘primitive’ peoples.”2 He held that it was not likely that the notion of money arose all at once. It makes more sense to seek the potential qualities of money in the properties of the materials exchanged in archaic and primitive societies. One thing is certain: pre-money was associated with magic powers. And objects used as money had to be suitable as a measure of value: they could not be physically consumed when used, but had to last for further circulation as a means of acquiring perishable consumption items. That was soon transformed into power that compelled subjects to perform services for those possessing such magic items.
“Bronislaw Malinowski, in a polemic with Charles G. Seligman (1910), protested against the abuse of the designation ‘money,’ and refused to include bracelets, sheets of green stone and other symbols of wealth in the category of money.
“In all archaic and ‘primitive’ societies, that did not have money or monetize either gold, silver, or bronze, sea-shells, precious stones and precious metals performed the function of ‘means of exchange,’ but not in the modern manner. Such objects rather had the character of talismans. Their powers were essentially subjective, whether associated with individuals or groups, and basically unstable, depending on the number of transactions for which they were utilized.
“Circulation combined economic and non-economic considerations. It was an archaic form of exchange that related to marriage, military and juridical services, divinity, and wealth” – with no lack of mystique that in fact still occurs in our day.
“Only later did the magic and precious objects that the community had earlier associated with purchasing power become permanent instruments for the universal measurement of value.”
“Economic theory, however, views the economy as something wholly autonomous and isolated from the rest of social life. It represents the beginnings of economic activity as a period of pure “natural economy” practising forms of barter. In fact no archaic or ‘primitive’ society appears to have practised barter among individuals. Instead, as Mauss observed, exchange seems to have been an affair of groups or of their leaders, or of both. What was involved was not only institutions of economic utility, but banquets, rites, courtesies, women, games and military display.
“And though the manner in which the successive ceremonies of gifting – the original gift, its acceptance, and the requital – appeared voluntary, they were in fact obligatory. No one had the right to refuse a gift offered, or not to reciprocate. That would be equivalent to a declaration of hostility. The prestige of the groups concerned and the authority of their leaders depended on respecting this etiquette.
“The role of pre-money was assured by magic and the value attributed to precious objects due to the prestige of the chain of its earlier owners, and how long it had remained in circulation.
“Indeed, all social groups involved in such gifting seem to have been based on blood ties. Once that was left behind, economic factors emerged as determinants of other social relationships. The structure of the community was no longer that of a family tree. Gifting and economic exchange thus appear in two distinct stages of development. But traces of the old rules lived on long after in juridical, political and religious practices. To the ‘wanax’ [king] in Mycenian Greece were attributed certain cosmic powers like rain-making, and he presided over the religious, economic and political life of the community. His palace was seen as a repository of precious things: talismans. The memory of these lived on through the disturbances and invasions which led to the destruction of the old order by invasions and internal turmoil towards the end of the second millennium BC. Administrative control of society and the use of writing were lost by the time the cities of Greece described by Homer appeared on a more modest scale. The custom of gifting lived on within families (the oikos), but not grandly organized by a central bureaucracy out of palaces. More modest rivalries amongst equals took over. And the gifts now given and received symbolized the wealth under the dimly remembered ancient regime were now replaced by prized objects that served as wedding gifts, to guests, and blood relationships.”
Once the blood-relationship is left behind as a basis for exchange, the family tree is replaced by the relationships of production in the structuring of the community. That becomes the arch-type of all groupings founded on reciprocity. On the other hand, when the implications of mutual gifting were largely religious, they symbolized the wealth and power of the donor. These contrasted with another item of gifting-the heads of cattle, more often serving the more utilitarian function as a unit for counting, than to set out the grandeur of the donor.
Gernet emphasizes the notion of social power originally vested in many of these precious objects. They may, for example, have served as wedding gifts in the family. They thus carried a cluster of personal merits and expressed other values than strictly economic ones. In Homer it was above all the heirlooms kept in the bedroom that the master of the house had received as gift and was restoring to circulation. They symbolized a social accumulation of the qualities of previous donors.
“The division of booty, votive offerings and wedding presents were all occasions for rising above the concrete individual form of value to a more general aspect of equivalent values.”
The importance of cattle in Homer for valuating other assets suggested to B. Laum the religious origin of money.3 In turn the value of pottery, bronze armour, a girl, bars of metal, or the sumptuous fare the guests had eaten in Odysseus’s house were valued in terms of oxen.
Laum concluded that it was not the object exchanged that acquired value because it was employed for a religious purpose, but rather that it could be employed for ritual purposes because it already had something sacral about it.
Laum and other scholars have ransacked the great Homeric poems for evidence on this dawning period of money. “He was struck by the progression of the various numbers of cattle by which Homer expressed the value of other items: 1, 4, 9, 20, 100. Likewise the number of cattle that were mentioned in sacrifices were 100, 20, 12, 9, 1. There is no mention of a sacrifice of four oxen, for example. From the identity of the number of cows used to evaluate other assets and for religious sacrifice, Laum concluded that the measurement of value had a religious rather than a commercial connotation.
Of course, you are free to conclude that it might be as a sort of throw-back that so many wealthy folk make it their purpose to collect money today as a sort of religious mission.
Any “circulating value” could do as value equivalent. However, the role of general measure of value came to be filled not by some “circulating value,” but by oxen. Although oxen did not offer durability or the possibility of hoarding, or easy transport, they were ideal sacrificial victims. And that determined their choice as a value measure. By their part in the religious rites were ideally suited for the early expression of abstract value. Sacrifice led directly to instruments connected with such rites. Thus the spit, originally a tool of sacrifice, gradually became metal money, as did the tripod and the double-axe.
In this way the process began in which circulating objects of wealth, became pre-monetary tokens, filling the functions as autonomous media of exchange, in no way dependent on the prestige and connections of their previous owners Since the contribution of the recipient was much to the fore, the choicest part of the animal sacrifice went to the greatest heroes according to merit. What finally remained was divided amongst the rank-and-file, the small pence of the occasion. This was an essential link in the chain of development that led to the introduction of money in Asia Minor in the last decades of the 7th century BC.
Light Shed on Contemporary Money Mutations
This little book of which we have covered less than a half because of space limitations, sheds light on the more recent transformations in the role and nature of money. There is a powerful suggestion of symmetry in the traits of pre-monetary exchange media, and the most recent degenerative trends in money. Of necessity it had to be cut loose from identification with precious metals by the sheer volume attained by world trade, and above all by the explosion of speculative activities. But the process has been very one-sided favouring those with control over credit money creation. The notion of abstract valuation was retained only when it suited those in charge, while on the contrary when it suited those in the saddle monetary policy seemed to work on the assumption that money remained something concrete that we would run out of unless it reduced its spending for social purpose. On the other hand when the very valuation extrapolated the rate of growth of profit rates already attained into the indefinite future and then incorporated them into current price, its availability is deemed unlimited. Booms take on the headiness of religious orgies. In general the trend was to deal with growth rates of perceived values rather than with the value themselves. And the real production is guided by the interest rate (again a rate) as the one blunt tool. The values placed on various gifts in pre-monetary society reflected in part the value real or fictitious of goods and people in long extinct societies.
Our current governments are driven by a unrestricted pursuit of monetary accumulation that can never be sated. From a medium of exchange money is becoming primarily a means for gambling leading to the accumulation of personal fortunes that bear no relationship to the real human needs. Distribution between countries and between classes within even the richest lands is unsustainable since credit requires a certain balance of revenue between debtor and creditor.
The pre-monetary periods of the Greeks were motivated by gifting that looked back to a richer, more cultured age, that may have been idealized, but actually had existed. The present goal is inspired by a vision that at no time existed or could exist: a self balancing society where all agents and the power distribution is assured by the infinitesimal size of all actors of production. There is a systemic evasion of a basic constraint of credit money – there must be a substantial access to credit on terms repayable by the borrowers.
Meanwhile, these researches in the Homeric poems and other great ancient literature allows us to grasp the pre-monetary traits that never quite gave up the ghost and that are becoming ever more evident.
Though they may be found falling short of the epics in the Iliad and the Odyssey, there are some striking parallels with them in the following extracts from a front-page story in The Wall Street Journal (27/9, “Lord Black’s Board: A-List Cast Played Acquiescent Role” by Robert Frank and Elena Cherney): “On a winter afternoon four years ago, Hollinger International Inc.’s directors met with the company’s chief executive, Conrad Black, for an especially busy board meeting.
“Gathered around a mahogany table in a boardroom high above Manhattan’s Park Avenue, eight directors of the newspaper publisher, owner of the Chicago Sun Times and Jerusalem Post, nibbled on grilled tuna and chicken served on royal-blue Bernardaud china, according to two attendees, Marie-Josee Kravis, wife of financier Henry Kravis, chatted about world affairs with Lord Black and A. Alfred Taubman, then chairman of Sotheby’s [tip-top auctioneers who have handled more celebrated magic trophies than Homer sang of].
“Turning to business, the board rapidly approved a series of transactions, according to the minutes and a report later commissioned by Hollinger. The board awarded a private company, controlled by Lord Black, $38 million in ‘management fees’ as part of a move by Lord Black’s team to essentially outsource [not to China, however] the company’s management to itself. It agreed to sell two profitable community newspapers to another private company controlled by Lord Black and Hollinger executives for $1 a piece. [That dollar was replete with the Lord’s charisma.] The board also gave Lord Black and his colleagues a cut of profits from a Hollinger Internet unit.
“Finally the directors gave themselves a raise. The meeting lasted about an hour and a half, according to the minutes. The board of Hollinger – a star-studded club with whom Lord Black had long-standing social, political and business ties – is emerging as a particularly passive watchdog. Hollinger directors openly approved more than half the of the transactions that allowed Lord Black and his colleagues to improperly siphon more than $400 million from the publisher, according to a company investigation overseen by former Securities and Exchange Commission Chairman Richard Breeden.
“The board rarely asked basic questions to get the facts it needed, despite warning signs. In addition to the management fees and other payments, the report says the board approved retroactively use of $8 million to buy Franklin D. Roosevelt memorabilia. A company jet, a platoon of servants, four homes, and a constant round of parties – all partly funded by Hollinger – were left largely unscrutinized by the board, according to the Braden report.”
Those who explained as vanity Lord Black’s determination to become a British lord even at the cost of losing his Canadian citizenship misread him. As a scholar of self-advertised depth, he was undoubtedly aware of the role of the previous owners’ charisma in the valuation of whatever they touched, and he was simply applying it in keeping with the tenor of our times. Surely branding and the whole cult of advertising have their affinities with the of the valuations of pre-monetary times.
1. Gernet, L., Anthropologie de la Grece Antique. Paris: 1968 (Italian translation by A. Rocchini, Milan, 1983).
2. Mauss, M. (1965). General Theory of Magic and Other Essays (1950). Translated into Italian.
3. Laum, B. (1924). Heiliges Geld. Eine Historische Untersuchung ueber den sakralen Ursprung des Geldes. Tuebingen.