Chapter 9 (Part 1) The Axial Age, Debt The First 5,000 Years by David Graeber
In the second half of his argument, Graeber proposes that in wartime, cash rules.
Dear Reader,
Oh boy, we’ve had a hot few days and I’m happy to have a respite today. Cool summer days are gifts! I did not plan to be out in the big city during the second round of summer heat. But day trips are a good break. Lest anyone forgets, the Olympics is ongoing in Paris and the Eurostar station puts on a creative show to remind you that it is only 3 hours away!
Amsterdam shines on a sunny day. The skyline in the city centre has changed. You can barely see the outline of the old structures now. More changes are afoot and there are fewer rough spots in the city—good for pedestrians, paid for by tourists and foreign investments. Perhaps, a bitter pill to swallow for long-time residents.
The tension continues. Let us enjoy though what the paradox offers. That is the cost of living in the present.
Regards,
Melanie
Cash, Coinage and War (800 BC‒642 AD)
Graeber promises that he will prove that the use of cash proliferated during the time of war in human history. In the last chapter, he examined the credit systems in:
Egypt
China
Mesopotamia
What he found is that, unlike the extensive accounting records in Mesopotamia, the rest of the regions were in transition towards a money-based economy. There was little evidence that money was used extensively or that was there a compelling need to use cash given the social structure.
The Axial Age, a term coined by philosopher Karl Jaspers and borrowed by Graeber, attempts to cohesively tell the story of humanity’s period between empires (or the early Iron Age). Graeber has its purpose for using this simplified term:
This was a period of breakdown with the rise of smaller kingdoms and city-states that were constantly at war or under threat of war
There was a proliferation of humanity’s foremost philosophers and spiritual leaders like Pythagoras, Confucius, Buddha and others that would lead to the birth of humanity’s organised religions like Judaism, Christianity, Islam, Hinduism, etc.
The minting of coins appeared during the same period these events began unfolding across different cities and periods
Though there are problems with the simplification of human cultures across different geographies, this abstract labelling helps think about the convergence of human development around money use.
There was a shared pattern of minting the first coins in uniform weight by citizens for multiple uses.
The earliest Greek Lydian coins found along the coast of Anatolia (Turkey) were alloys of gold and silver sourced from the River Pactolus. It was hammered with an insignia, most notably a lion with the reverse bearing the anvil insertion point.
Several transformations had to happen for money to proliferate in society:
It had to find its way into the common folk when the treasury was stored in temples and exclusively used by the monarchial elite
It had to be reduced in size for ease of transport and transactions.
The state or government had to monopolise its creation, standardisation and distribution
There must be a national market for its use
Two reasons we outlined earlier become important here. Classicist David Schaps as Graeber points out, identifies plunder as the most plausible reason why the temple treasury would reach the common folk. During the political turmoil of that era and even much earlier, it was one of the easiest diffusion mechanisms of wealth. However, Graeber observed that it was the rise of the soldier as a professional class that would cascade money use in the form of salaries and payments for their services by other city-states. This was the use case of Lydian coins. By 480 BC, there were about 100 mints in different Greek cities to pay for mercenaries.1
In the next coming posts, we shall examine Graeber’s primary question, what is the relationship between coinage, war, and the birth of new ideas?
The Mediterranean War Complex
Before coinage, Athens and Rome were in the middle of their respective crises due to their commodity, slave and debt markets as we’ve seen in Chapter 7, Part 4. In a war economy, this posed several problems:
A potential soldier class, the plebians, are tied to their debt patron or creditor rather than an army or state.
The patricians had to reduce or free their debt peons to serve the army
Coins were the solution but also the problem.
What ensued is what Graeber calls the ‘military-coinage-slavery complex.’2 This triumvirate was essential to the Greeks to ensure that it had enough free population for war. They needed to create a money production complex to make this happen:
War slaves dedicated to mining gold and silver
Temple complexes for minting and storage of the loot
State authority to distribute coins not only to soldiers but also to other areas of social life such as ship construction, fees, and taxation; money had to become a legal tender of the state
Coins for war: Alexander in Persia
A great story of how this worked was the conquest of Alexander the Great of the Achaemenid Empire of Persia.
To fund his campaign, he melted the gold and silver from his previous victories to mint money for his creditors and soldiers. The calculation then was half a ton of silver was needed to pay for 120,000 men per day. This required an enormous amount of slave labour to work in the mines. Ultimately, he also transformed the credit-based Mesopotamian society. He forced the release of the temple treasury to mint coins as payment for his taxes.
War as a temporary solution in a debt crisis
It is easy enough to see that a free soldier class relieved the debt peonage crisis in both Greek and Roman societies. This soldier class was a temporary way out of the clashes between patricians and plebians.
Patricians’ agricultural loans turned plebians into bonded labour on their estates
Peasantries were constantly abandoning their fields and threatened abrogation of their duties on the estates
This class tension was in part relieved by the military complex. The patrician had to free their labourers from agricultural debt to serve in the army. The soldier class enabled the plebians to enjoy war loot and debt freedom. Rome would eventually eliminate debt bondage in 326 BC about the same time as the first coins were minted in 338 BC. Coins circulated heavily where soldiers were stationed in Italian cities.
Though it was outlawed, debt bondage was not fully eliminated. The crises escalated and led to more locals becoming serfs without any hope of debt release. The fall of the Roman empire, as Graeber paints, was due to the enslavement of the locals and ultimately the elimination of the local soldier class. Ironically, the army had to hire Germanic barbarians which hastened the downfall of the Empire.
Round-Up
Graeber introduces his second argument: the proliferation of money use or coinage is a result of a war economy. Unlike his previous argument, this time, he has more evidence to support it.
The Mediterranean experience on coinage shows the military complex is supported by slaves and portable money. The soldier class is one of the key social developments in the proliferation of cash use. This became an important debt relief for plebians against the strict debt bondage to the estates of patricians. However, as Graeber rightly points out, debt crises preceded this. Colonisation and the establishment of satellite cities in the previous chapter and the military complex temporarily eased the debt enslavement of the local population.
The core problem here is the creation of the debt crises and I am expecting him to develop that later in the book.
Graeber has a strong beginning on the relationship between money and the war machine but not the development of ideas. Let’s wait until the end.
Re-read the previous post
Interestingly, not all empires used coins. The Phoenicians were the exception. Though they were widely known as merchants, bankers, accountants, and inventors of the abacus, they preferred the use of ingots and promissory notes as in our previous Mesopotamia examples. These ‘trading nations’ as Graeber calls them contrast with the military states of Greece, Rome, and Persia.
He developed his concept from Geoffrey Ingram who coined the term ‘military-coinage complex.’ See the The Nature of Money or a preview of his ideas.