It was recently decided on this blog that in general guest posts here were not a good idea, but that the occasional elevation of a comment into a blog post, at my discretion, was fine. I am happy to go along with that.
I am also delighted that Helen Schofield, who is one of the regulator commentators on the blog has, as I asked if she might, summarised her thinking on the relationship between Christine Desan's work on money and modern monetary theory.
Helen supplied this to me in eight comments, but I think they might become our blogs to be published over the next few days. I have not edited them. I offer them as Helen did to me, in the hope that they might stimulate discussion. These are the first two.
–––-
Christine Desan's Work In Relation To MMT
Instalment One
Richard asked me to write about the relevance of Christine Desan's work to furthering MMT knowledge. Desan's first degree involved her in the Sociology of Religion and her second degree was in Law. The main message of her work as I see it is to point out to us that the design of money is continuously evolving in its design. I suspect her involvement with the Sociology of Religion made her aware of the fact the cooperative endeavour embedded in nature, of which we're part, is very much part of the evolutionary design of money.
The recognition “evolutionary design” was going on made Desan pay attention to history but I think it helps before you start looking at money's history to ask “What are the key tasks we're asking money to do for us?” It seems reasonable to narrow these tasks down to three; firstly, to overcome the “coincidence of wants problem” in private exchange, secondly, to enable the government, or chief stakeholder in a society or country as Desan calls this agency, to easily obtain resources from members of the society or country to deal with collective needs including threats, and thirdly, to enable saving by society members or country citizens to deal with future events and desires.
As MMTer's we should all be familiar with these three tasks for money, collective and private with savings, there is, however, one other very important need necessary to accompany them and that is any money created must hold its value for as long as possible. Desan like Richard argues the best promise available to achieve this is government created money. I have to tell you that it's with this argument that historically contention breaks out and thinking gets confused but let me start with Desan's first argument on “value holding” which is really an enhanced core MMT argument.
Desan quotes the work of Gary Gorton (also a professor at Harvard University like her) and other colleagues. Gorton asks the question what constitute safe-assets. He argues there needs to be two essential factors information-insensitivity and good collateral.
The first factor is not having to constantly check that the so called safe-asset will “honour” its promise to be reliable for medium of exchange and savings purposes. The classic case of this is the early days of private sector banking where there'd be insufficient reserves to honour a bank's promises. So, for example, in the case of gold-smith banks who offered receipts for holding gold and silver coins and bullion in their vaults and those receipts were subsequently traded to buy goods and services then come the time an individual decided to redeem a receipt for specie coinage or bullion but the gold-smith bank had over-issued too many receipts and there'd been too many redemptions there was a problem. Once word got out there's likely be a bank run. In the 19th century and early 20th when cheques were being used there were often problems of them bouncing at banks down the line or customers being able to withdraw savings from the bank for lack of reserves. It may, of course, been too many bad loans that resulted in lack of reserves.
The second factor that determines what is a safe-asset is having good collateral. One of Gorton's colleagues Tri Vi Dang calls “debt on debt” the best form of collateral. This is the ability to redeem or retire a debt. Clearly contractual law applies if a bank wants to redeem a bank loan either holding the debtor to the original loan repayment agreement or a modified version of it. It can of course take action to recover money from a loan defaulter via the defaulter's collateral but note the law might limit the amount. In the United States, for example, there is a $10,000 limit on credit card recovery. The best “debt on debt” agency is obviously government which sets the laws including its powers to impose taxation and get coercive about it if it needs to. Again this is what Richard means when he say's “the government has by far the best promise” meaning ability to retire money so as to maintain its value as long as possible.
Instalment Two
The second argument Desan puts forward is that whilst the work of Gorton and colleagues makes sense you also have to take into consideration what the state of the society or country is in that the safe-assets are being used. To identify just how stable that society or country really is. Is it under threat from something like other societies or countries or the environment or disease, is there internal conflict with power struggles taking place. Desan tells us that the long history of societies and nations using specie money, gold and silver, is that if there's a collapse of civilisation or another society or country takes over yours there's always the possibility the coinage can be melted down and sold as bullion either within your own territory or abroad.
It's believed that in the Western world coins were first invented by Greeks in Lydia (now part of Turkey) sometime in the 7th century BC. The use of silver coinage was a central part of the Roman Empire. Whilst they imposed taxes in kind on some countries in the Empire (wheat from Egypt, for example) generally speaking they preferred taxes paid in their coinage. Notably they made sure that silver mines were firmly controlled and coins were struck by “mint magistrates.” Italy itself contained few silver mines and the creation of the Roman Empire would have been driven in part by the desire to obtain more silver for coinage. It should be noted the Romans traded with Greek colonies in Italy which used silver coinage. Clearly taxing in coinage although thought of as tribute from non-Italian countries in the Empire had the effect of maintaining the value of the coinage as long as possible from the ravages of inflation. However, the Romans minimised taxation on Romans in Italy unfairly distributing the tax burden to the non-Italian countries, ultimately this was probably one of the drivers that led to the collapse of the empire. It would also seem unclear whether the Romans understood the concept of monetary inflation or indeed deflation by issuing too many or too few coins but emperors did engage in debasing the coinage in order to make government spending money go further.
As we know in the UK the Romans left here but they also left other countries in Europe and yet the use of specie money continued. In the UK it continued for over 1600 years although there was a two hundred year break after 400AD where little specie money was used except probably for trading with other countries. Since we don't know if the Romans understood the dangers of monetary deflation and inflation we don't know if that knowledge was lost in the UK when they finally left in 400AD. I suspect the British learned the lesson of inflation for the simple reason European countries were often at war internally or with each other with the collapse of the Roman Empire and Kings and Queens, ultimately Parliaments, were almost constantly looking for money to fight these wars and debasement of the currency was one way to do this. Indeed in England for all but three years in the 17th century the country was involved in fighting one war or another!
Specie money was therefore both a hedge against uncertainty particularly war outcomes but even in interludes, periods of peace, there was always the potential for it to have a deflationary effect because merchants could sell coins at a higher price often abroad for melting down for non-coinage and coinage uses. It seems reasonable to argue that once the tight empire control grip of the Romans had gone England never really succeeded in getting a tight control of its species money right up until the end of the 17th century. Indeed unlike the Romans England allowed private citizens to bring silver or gold bullion along to Royal mints and have coins created. The government exercised seigniorage by keeping some of the coins created for its own use. Of course if a higher price could be obtained for selling silver or gold as bullion private citizens wouldn't bother having coins created which ultimately meant government hadn't very good control over the amount of currency in circulation and therefore demand in the economy. It could only increase its control by securing silver or gold from abroad and it could be said this was a driver of imperialism.
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A government “promise to pay” is a more reliable guarantee for the preservation of value in savings than commodities, whether wheat, gold, silver, copper zinc etc due to the “volatility” nor uncertainty of the “open” market.
This then means that governments, especially the main currency issuers – US, Japan ECB/EU, UK, Switzerland et al have a huge responsibility in not issuing too much and restricting the issuance according to the productive capacity/employment/unemployment levels of their respective economies.
@ Bill Hughes
Thanks Bill for introducing the word “volatility” I think that’s a great descriptive word for what was going on in English society during the 17th century. There was the fight for a genuinely democratic Parliamentary political system and government aligned with the problem of trying to continue with the centuries old use of a “volatile” specie currency. The combination of these two factors resulted in a re-design of the English currency. I think the reason the Roman Empire lasted so long was the Romans keeping their specie currency “volatility” under control by imperialistic political force and a careful limitation on who could create coinage.
The issue of ‘volatility’ in the context of the security of the promise is really important. The reliance on ‘commodity’ is misleading. Graeber, appealing to Laum provides the corrective: “The German historian Bernard Laum long ago pointed out that in Homer, when people measure the value of a ship, or a suit of armour, they always measure it in oxen – even though when they actually exchange things , they never pay for anything in oxen. It is hard to escape the conclusion that this was because an ox was what one offered the gods in sacrifice. Hence oxen represented absolute value”. (David Graeber, ‘Debt’; Ch.3, p.59).
This is a theory of value rooted in religion, a point I have made elsewhere. In my other comment here I made reference to Adam Smith’s use of the Homeric oxen analogy. Smith’s ‘invisible hand’ was essentially providential – it arises from Smith’s discreet, liberal but nevertheless religious intellectual framework. The sense of the kind of measurement being used in the early formation of ideas of ‘money’, and the link between religion and value, became lost in the rise in the use of commodities, and perhaps even misled Smith when he formed the conjecture on the origins of money.
I am enjoying this ox narrative…..
Graeber was one clever fella!
@ John S Warren
Vince Richardson has posted on the Hawala system of motionlessly transferring money between countries in his comment on my 5th Installment “Institutions/Agencies”. I think this system has to be backed up by the religious “Golden Rule” to work so well and for so long.
https://en.m.wikipedia.org/wiki/Hawala#:~:text=Hawala%20or%20hewala%20(Arabic:%20%D8%AD%D9%90%D9%88%D8%A7%D9%84%D8%A9%20%E2%80%8E%20%E1%B8%A5aw%C4%81la,%20meaning,huge%20network%20of%20money%20brokers%20(known%20as%20hawaladars)
Thank you, Helen (and Richard). “Every day is a school day” on this blog.
Next lesson tomorrow….
Thank you for that invaluable introduction. I found myself looking for footnotes so that I could refer to the precise locations of your sources (I confess probably this betrays a sad tendency to pointless pedantry!).
I was particularly struck by your opening, acute remarks about the evolutionary nature of Desan’s ideas. Desan seems to me to be steeped in Enlightenment thought, and I presume this rests on an appreciation that the literati’s distinctive method was fundamentally evolutionary; although at the same time Desan is also a stern critic of Hume and Smith’s errors: for example over what I would term the ‘barter origins conjecture’. The conventional criticism here is either of Smith’s anecdotalism, or at least a failure to pursue the Newtonian method that provided his paradigm, sufficiently rigorously. This however, overlooks the essentially provisional nature of the approach, which reflects the evolutionary nature of the analysis. This is best seen in the first great commentator on and historian of the literati’s method, Dugald Stewart (1753-1828), who termed one aspect of the method “conjectural history”. There were, therefore understood limitations to the ability of a given conjecture to survive intact new observations, new tests, new information. Hume would not have expected their analysis to survive unchanged by subsequent research. What is remarkable is not the errors, but the extent of the insights and the illumination the literati provided.
Smith was writing at a time of rapid expansion in exploration of the world, of Empire, and scholarly examination of little known societies, and of past civilisations. His discussion ‘Of the Origin and Use of Money’, in the ‘Wealth of Nations’ (Book I, Ch.4) is sufficiently well grounded in his references, for example to the Homeric use of Oxen as a unit of measurement, for quite similar references to be used throughout the history of economics (for example by such seminal text-book writers as Samuelson), with far less justification or need subsequently to rely on such relatively limited or incomplete sources, over two hundred years later, and well into the 20th century. Frankly this is merely lazy, and perhaps betrays a later casual, lack of interest in an important issue. Both Smith and Samuelson make a similar mistake in interpretation, but it is the endurance of the error long after Smith that is entirely inexplicable, much less the flaw in the original conjecture.
Ironically, Charles Goodhart, in his notably titled ‘The Evolution of Central Banks’ (1988), conforms to the Enlightenment approach, and he highlights Hayek (who understood the evolutionary method of the Enlightenment very well), nevertheless struggling to reconcile his assumptions with the evolution in general understanding of Central Banking (Ch.3, pp.24-28), with his own, deep intellectual prejudices over his commitment to possessive individualism, without effective checks or balances: a commitment which may perhaps only ever properly be understood in the context of Hayek’s own history in the turmoil of post-WWI Vienna and the rise of Fascism; which were eventually given articulation in ideological rather than evolutionary/Enlightenment form in, ‘The Road to Serfdom’ (1944). The best critical response to Hayek’s ideological dogma was provided indirectly by Karl Polyani, perhaps especially in his stark contrast to Hayek’s hostility to the US New Deal, and Polyani’s more perceptive and even prophetic understanding than Hayek’s naive faith in the responsibility of unloosed laissez-faire, of the real mechanisms that produce dictatorship. This distinction is of particular relevance to us, in our Coronavirus, post-Brexit, populist, intolerant, Trumpist age.
@ John S Warren
If you’re looking for appropriate analytical method or lack of it historically the more I think about it Bill Hughes has provided a clue “look for the volatility” in any situation! Clearly trying to use specie currency was volatile, trying to have two agencies, monarchy and Parliament, vying to be in charge was another, and John Maynard Keynes asked us to look at the role played by “uncertainty” in private sector investment. Are not the words uncertainty and volatility closely related? In more recent times what, for example, was the “volatility” involved in the cause/s of the 2007/2008 Great Financial Crash. Now we have the volatility in the economy caused by Covid. So what I’m saying is that if you methodologically identify what’s causing volatility or will cause it within your society you can then better go on to work out solutions to stop it.
I realise I missed the all-time favourite for causing volatility the Gold Standard!
Yes, “absolute value” – the Homeric oxen as totemic religous sacrifice, for example -defines for the whole community not just the absence of volatility, but its opposite. The search was for a guaranteed measure that everyone can depend on, no matter what. Only religion could offer such a measure. The significant point here is that it provides an absolute value yet its existence has no physical representation whatsoever it is a bond of religious trust transformed into transactional community value; its fundamental nature is metaphysical, and cloaked in reverence.
The ‘money-value’ relationship relies on trust, and who trusted government in the volatile 17th century in Britain? Instead, there were simultaneous civil wars in the three kingdoms, and then a revolution (conducted through a Dutch invasion, with exiled Scots support), all within 50 years. Indeed, the resort to commodity-money implies lack of trust, because it introduces a dual measure of value and attempts to conflate them; value as ‘money’ and value as commodity. This relationship is essentially volatile, because as ‘money’ it depends on the commodity value, rather than its own value (implicitly this lack of an independent measure of value as ‘money’ – as noumena – undermines itself); and as commodity its value is volatile, because commodities follow the contingencies of demand and supply, not an absolute measure of value.
I should have clarified better my use of ‘representation’ here: that the oxen has representation (oxen existed), but has no substantive existence in money transactions. In this sense the ox is metaphysical. It stands for absolute value, but oxen are never used as money in real transactions.
@ John S Warren
I think your comment about “volatility” being created as a result of money having two values “commodity” and “abstract (nominal)” is absolutely spot on in its clarification. Thank you for that!
@ John S Warren
“I found myself looking for footnotes so that I could refer to the precise locations of your sources (I confess probably this betrays a sad tendency to pointless pedantry!). ”
If it’s foot-notes you crave Christine Desan is definitely the pedant woman for you. She’ll have you exploring places you never knew existed!
Seriously though it sounds as though you would enjoy both my two main source books for what I’ve written:-
“Making Money: Coin, Currency and the Coming of Capitalism.” Desan
“The Day the King Defaulted: Financial Lessons from The Stop of The Exchequer.” Milevsky
No, no I already have them; and many of her journal articles, pdf format on the laptop. I was greatly helped by your early posts with links in much earlier threads (some of us actually use them, you know). When I say references and footnotes I was meaning academic journal style, for close reading/ cross-referencing, with sources literally to hand. Well, I did use the word ‘pedantry’: I know that is not appropriate in this environment, but hey; I’m a nuisance!
I used to find academic refencing annoying. Now it is second nature, when required. But for most people hyperlinks are much more useful.
The evolution of living organisms has occurred because genetic networks incorporate what is termed “redundancy”. There are large areas in these networks that have no immediately obvious function but it seems that they provide “back up” which permits the network to survive mutations and thereby adapt without the mutations destroying it.This is nature’s insurance against system shocks or volatility or uncertainty.In monetary networks we call this savings….so I firmly believe Richard is on the right track with his thoughts on hypothecated savings. It also points to the Importance of a diversified and decentralised banking system….in such a network no bank will be too big to fail. Failure can occur without endangering the whole network.
‘Redundancy’ as a concept has almost disappeared because Neo-liberal efficiency requirements tend scoop out as much money as possible from an operation for the investor as possible. This too has affected the efficacy of the public sector who have been made to behave the same. It explains why nearly everything is so crap – out inability to cope with Covid, the lack of ready PPE, to why when trains breakdown you’re more likely to get a cancellation as there is hardly any spare rolling stock hanging about anymore.
BTW – I think that Desan is a great find in these debates and this has been a fascinating blog – my thanks to all.
@ Jim Osborne
On the subject of “redundancy” or “backup” and musing further on Bill Hughes use of the word “volatility” it would seem that whilst in some circumstances we need as societies to identify what “volatility” we don’t want in the institutions and systems we use we do actually need some “volatility” to inject new ways or revamped ways of doing things.
The obvious examples are competition in private market capitalism and an electoral system that encourages competition between parties in regard to policies. Certainly the perennial complaint of MMTer’s in the UK, myself included, is that the First Past The Post system has resulted in two major parties Conservative and Labour that believe government has no money creating powers of its own and operates on a credit card.
I posted a paper by Jeffrey Lau and John Smithin yesterday on another one of Richard’s posts. It’s worth referencing a point they make on Marx’s explanation of private market capitalism that it’s M>C>M+ (Money>Commodity>Money return plus profit) but for capitalists to engage in this exercise there first needs to be a stable unit of account where money holds its value for as long as possible.
Of course none can provide this “safe-asset” based unit of account better than a stable sovereign government. The form in which this currency is delivered into a country also has to be one that is capable of wide dissemination to stimulate demand for goods and services production. This was the problem with specie money it was volatile, not stable.
https://www.researchgate.net/publication/5172361_The_Role_of_Money_in_Capitalism/link/548898b00cf2ef344790a152/download
Helen…I would frame the issue the other way round. We don’t “need” volatility…it is a fact of life….actually more than that, it is a fact of nature. What we need is redundancy so that we are able to adapt. Included in the scope of redundancy is the promotion of “tinkering”….valuing the “nut jobs” and “whackos” experimenting with crazy ideas and inventions which have no obvious and immediate use. In evolution these are known as “pre-adaptations” which emerge without any real function until something dramatic happens and reshaped the environment….and hey presto the pre adaptation turns out to provide competitive advantage in the process of natural selection. This is how to navigate uncertainty, external shocks and volatility, all of which are objective features of…..well everything.
@ Jim Osborne
What you say Jim about “volatility” is right it reminded of the work by the late Eshel Ben-Jacob on bacterial colony functioning. In the following article he talks about a colony’s adaptive functionality in regard to antibiotic attack being made possible by short term epigenetic memory:-
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1618491/
In case of interest I discover Christine Desan is ‘Managing Editor’ of https://justmoney.org/
In case of interest I discover Christine Desan is ‘Managing Editor’ of https://justmoney.org/
Yes Peter there are some interesting papers on the Just Money website. Well worth exploring for MMT fans.
[…] began posting a series of comments from Helen Schofield on the history of money yesterday. Today I add here third and fourth instalments. The series will […]
I totally agree on having money as stable as possible ,I can’t recall who, but some eminent economist said that a good money has to be stable ,for which Bitcoin serves as a great example of what is a bad money. When the money itself become the target of interest or speculation ,the money loses its usefulness. Which is also why gold and silver make poor money or currency. Any good money will therefore be worthless in of itself. Which is why paper and electronic money is such a “good money”, it is the value it represents that matters. A £20 pound note costs about 20 p to make, so there is no point melting down a £20 note or even a computer!
This issue about the nature of what money was has caused quite some debate over the centuries. All money is is credit but not all credit is money. There needs to be a “transfer element” of credit before it is classed as money, as the shadow banking sector has learned well. As long as it can be passed onto a third party and is widely accepted, it becomes money.
Going back to the Romans,they tended to used coins for small transactions, but used promissory notes or bonds(cheques) for larger ones, called “littera” or “nomina”. Tiberius actually faced a huge credit crisis in 33AD due to a boom in lending, to counter the threat he used an old forgotten law from the days of Julius Caesar that limited the amount of loans the aristocracy could lend. This was in effect an early capital adequacy requirement for lenders. This however cause a huge call in of loans, collapse of the property market and ensuing fire sales and mass bankruptcies. Things got so bad Tiberius had to agree to a bailout,most of the Senate faced ruin. So The Imperial treasury allowed a 100 million sesterces programme of 3 year interest free loans against real estate security. Credit was restored and lending resumed after the panic subsided. Now who would have thought we would be doing exactly the same in 2008?
But the subject of what was money continued throughout the ages. In the UK as you say, silver coinage disappeared in the late 1600’s because the silver content was worth more the the face value of the coin and was melted for bullion. A perfect example of bad money. Not that many of brightest of the day understood that concept. John Locke argued that the new coinage that was planned to replace the old clipped worn and “disappeared” silver coins, must retain its “purity” so as to maintain confidence in it, this was the exact opposite to the Treasury secretary’s, (William Lowndes who was an extensive student of historical money/coinage issues) own Report which wanted a coinage made of less valuable metals. Locke’s view won out, but the subsequent new “pure” silver coins swiftly disappeared as well ,only faster, leading to riots and recession. This particular “abolitionist “attitude to money has long been a fallacy that many have since made ,keeping us on a gold standard that eventually had to be abandoned.
Thanks for these posts ,I am enjoying them.
Sorry that last line should read “Absolutionist” not “abolitionist.”
@ Vince Richardson
“There needs to be a “transfer element” of credit before it is classed as money, as the shadow banking sector has learned well. As long as it can be passed onto a third party and is widely accepted, it becomes money.”
Your sentence reminds me that one thing I neglected in my Christine Desan and MMT saga was the important point she makes as a law professor and that’s how a currency creating government backs up the use of that currency by enshrining its use in law. This is covered in her book at some length “Making Money: Coin, Currency and the Coming of Capitalism.”
@ Vince Richardson
Thank you very much for your information on the Roman’s use of promissory notes. I wouldn’t claim to know a great deal about Roman history but what you say is fascinating. Lender of Last Resort started much earlier than we imagined and there’s our prime-minister took a Classics degree at Oxford University!
@ Vince Richardson
Thinking about it Vince do you have a weblink or a book link to the Roman use of promissory notes? The reason I ask is Libertarians like Friedrich Hayek go on about there’s no need for government created money and the private sector is perfectly capable of taking care of its own medium of exchange needs.
https://iea.org.uk/publications/research/choice-in-currency-a-way-to-stop-inflation
Helen,
My Tiberius story came from Felix Martin s book “Money; An unauthorised history ” page 82. Martin also references it with this foot note;
“The law was de modo credendi possidendique intra Italiam!
” Regulating lending and title within Italy”
Tacitus in “Annals” also comments on it by saying about attempts to control such crises;
“Though continually put down by new regulations, still, through strange artifices, reappeared”
Sound familiar.
Felix Martin also studied classics, as well a international relations and economics ,has worked for the World bank and investment world. So he comes at this with a classic historic view which is eye opening.
Hope this helps
@ Vince Richardson
Yes thanks very much Vince. You’ve sent me down another rabbit hole exploring! From the little research I’ve done it looks like Tiberius resolved the credit crisis by creating 100 million “brass” coins (sestertii) not silver or gold. So what’s going on that Romans had reached the level of sophistication that they actually understood MMT (chartalism/tokenism) nearly 2000 years ago? How come the English and Welsh promptly forgot all this when the Romans left the country nearly 400 years later?
https://epicenter.wcfia.harvard.edu/blog/financial-crisis-then-and-now
[…] is the third in  a series of comments from Helen Schofield on the history of money. The first is here, and the second here. Today I offer what Helen describes as her fifth and sixth instalments. The […]
Thanks Helen.
Lots to digest.
I have now got my head around the idea of the retirement of money as a means of keeping its value.
The ability to remove money from the economy, is vital to maintaining the value of the money that is left in the economy. Otherwise too much money chasing too few goods, creates inflation, which reduces the purchasing power “value” of the money.
How best to remove money from the economy? TAX.
Who’s best set, to do the removing? GOVERNMENT.
They copied it from the Greeks, like everything else.!But spread it further.
This is a direct quote.
“If Rome’s technological achievements were impressive, they were as nothing to its financial sophistication, Within a few centuries of its birth in the Aegean, money was everywhere in Rome. The financial infrastructure was vast and complex”
Cicero also said on large payments “one provides the bonds and completes the transaction.” as well as that “concerning the the acquisition and placing of money and its use, certain fellows, whose place of business is near the Temple of Janus, converse more eloquently than philosophers of any school”
Even in Roman art, the poet Ovid says in one book about one character “it is no use that you have no cash on you can always write a cheque”
According to Martin as the military might of the Romans faded, after the loss of Egypt, there was a “serious money disorder” including a spectacular 1000 % inflation in 274-5 AD. He says after 300 AD the bankers “disappear” from record. Social and political stability had gone. As the governing institutions retreated the ability to sustain professional financial went with it. I guess they ran out of apprentice bankers. By 500 AD In the UK coinage stopped being used for the next 200 years despite having been used here for the previous 5 centuries. “We entered the Dark Age”.
From my reading of early Saxon/Ancient Briton histories they were quite fragmented societies, no one even wrote much let alone carried out banking. Plus they were very superstitious about anything Roman, thinking them to be “giants” They kingdoms were small and they uses a system of patronage and sharing in a pyramid system. Offerings and land were measured in hides, as in how many hides a piece of and could generate.
As civilisation slowly progressed, eventually coins were struck and money introduced by late 700s.
Martin footnotes a few quotes from a book by Harris W “The Nature of Roman Money” 2008,if you need to find more on this.
I recall reading a book a few years back by an anthropologist and he marked civilisations out of 10 for various categories like population of cities, levels of stories in building, military capability, economy, wealth etc and plotted the overall scores on a graph through time. What he found was that during the Roman era Europe grew on all fronts rapidly ,equalling China in the east. Then after the fall of the Roman Empire, civilisation in Europe went backward by quite some amount and never recovered for1400 years. European civilisation only actually reached the Roman level of civilisation until the 1800 s with the arrival of the Industrial Revolution….that is some Dark Era.!
Anyhow don’t get stuck down that rabbit hole too long, remember to come up for air.
I am much enjoying all this
@ Vince Richardson
Thanks Vince I went down the rabbit hole and came up with this by William V. Harris “A Revisionist View of Roman Money” 2006 which can be downloaded from the following website:-
https://www.academia.edu/38733467/CREDIT_MONEY_IN_THE_ROMAN_ECONOMY
This would strongly suggest there was a private banking system that had something akin to the use of cheques for purchasing high value items instead of moving large quantities of gold and/or silver coinage or bullion between buyer and seller.
The following website suggests that the Romans were using a wide variety of metals for coinage gold, silver, bronze copper and brass. The first three were probably melted down to achieve more value as bullion but I’m unsure if the latter two were.
https://www.ancient.eu/Roman_Coinage/
William Harris’s revisionist conclusion is as follows:-
“We have seen that there is every reason to think that credit-money in particular enabled the Romans to extend their money supply far beyond the limits of their monetized metal.”
And that I think is where it has to be left the Romans were a lot smarter about what constituted money than we imagine and probably wouldn’t have struggled to understand MMT ideas as much as the British populace do today! So much for us thinking our current civilisation has progressed in monetary system understanding!
Helen,
Thanks for the research that is a good find. I was thinking about this today on my walk. It had t be the case that the Romans did not use coinage as their only method of financial dealings over such a large empire. Moving vast amounts of precious metal over dangerous seas and lands is not a particularly smart idea. It is far easier to use records of debts and credits ,besides the Romans were not the only ones to realise this.
The Chinese were and are also adept at using such a system, they still use it now to get money in and out of China, despite communist govt capital controls. There are underground Chinese banks that currently operate to move money in and out of China without any official trace. If you have a reliable system of bankers who trust one another and have some ledgers one can perform miracles with money even across borders and currencies. If you want money transferring to New York thye will find a Chinese person in New York who want money transferring to China. All you have to do is swap the ownership of an account in China for teh equivalent of a bank account in New York. Money gets transferred an no govt official in USA or China even knows : )
The Romans would have found a way to do this too.
https://www.nationalcrimeagency.gov.uk/who-we-are/publications/445-chinese-underground-banking/file
https://www.newsweek.com/chinas-underground-banks-96977#:~:text=Underground%20banking%20goes%20by%20many%20names%20in%20China,,product,%20though%20it%20could%20be%20twice%20that%20much.
Contrary,
Yes that sounds logical. I live not far from eastern end of Hadrian’s Wall and it is my favourite place to walk. It is a amazing place to visit. There is still some debate as to actually why the wall was built. I have even read one historian who claimed it was not built to keep the marauding border tribes out but as a tax collection system. It may have been a way of channelling lots of border trades through chokepoints along the wall, where goods could be more easily taxed.
I have no idea if this has ever been corroborated but it sounds feasible as well. I know from the local history that the border regions were once a highly populated region and so there must have been much local business and trade. Of course that is the opposite case now as it has become a remote and sparsely populated area, which makes it perfect for long walks across the border hills. However I do tend to think that the Romans probably would never recover the cost of building such a project via local taxes, so those border tribes really must have been causing a lot of trouble. I use the word “border ” rather than “Scottish” because although the western end of the Wall is close to the current Scottish border there , with the angle of the border now and the rather horizontal East-West the wall actually takes, there is still quite a bit of English territory north of the wall on its eastern end, making up much of the beautiful county of Northumberland. Which was later fought over by various warring clans based on both sides, so this was historically a very violent place to live. I can confirm it is very peaceful now.
Nit just peaceful, but one of my favourite places for its beauty, hospitality and sense of connectedness to all that is important that is apparent in so many places in the county
Richard,
Yes it is a marvellous county to visit, so much to see and do it is like taking a step back in time. I always say it is the most underestimated county in England, but only by people who have never been.
🙂
I love everything from fish and chips in Seahouses to the beauty of the Cheviots onwards
Vince, and Richard, yes indeed, all along the stretch of Hadrian’s wall and surroundings are beautiful and peaceful, and it’s fantastic that the path is a world heritage site so will hopefully continue to be maintained for a long time. I’ve only visited Kielder Forest a few times, but it’s a lovely area too.
A friend and I became interested after a long weekend of walks, in 2014 I think. And we took 5 years to complete the entire path, in random stages. We bought the T-shirt, avalaible by the end, but people just look at us funny when we proudly say it took us 5 years. For some reason people think it best to race the course over a week. In that 5 years time, we obsessively investigated the history and re-visited many of the visitor centres/museums along the route – each has its own particular theme and each are worthwhile visiting. We did a futurelearn course on the archaeology of Hardrian’s Wall held by Newcastle University and led by Professor Haynes – who my friend’s cousin works with and is fairly close to (I think there may be an invitation, by association, to visit his French chateau home at some point in the future – but I feel pressure to brush up on Roman history if I was to go!). We managed to meet Prof Haynes on his last day of digs at Maryport – we had already visited there, but the general public could get a tour round a live dig site and get first hand information on what was found and its potential meaning. Very worthwhile.
Sorry – I could go on for hours about Hadrian’s Wall! Maryport is one of the coastal forts in Cumbria, which we still plan to visit all of (or walk?) – Ravenglass is of particular interest because of a bathhouse, and a steam train up to the fort that was rebuilt at the top of the hill beside it. It’s interesting that all these places that seem so remote to us now, were once centres of population, or had strategic importance – and like you say the environs of Hadrian’s Wall were once thriving communities.
On the reasons for the Wall being built: I gave what I think are the most likely initial reasons. People tend to package up the Roman occupation into one period – but it lasted about 2-4 centuries, and through many different eras. There is no doubt that the wall was used to control trade and tax collection, but a turf & timber wall would have done just as well for that (indeed, the west end of the wall, from Birdoswald, I think, to the coast was turf and timber for many decades after the wall was build, it was later upgraded) – it’s the fact that it was *stone* that makes the wall unique. South Shields – Arbeia – has a great reconstruction of how a bit of wall might have looked.
Stone construction was usually reserved to Rome and Italy, the remoteness of Hadrian’s Wall – think of the logistics of Hadrian signing off on a design change when it would take weeks or months for letters to go back and forth – makes the decision a strange one, and why those reasons that are still contested. Hugely expensive, including annual truckloads of payment to the legions building and manning it, for what return? There certainly seems to have been booming trade for the local communities, for those that weren’t slaughtered, that is.
The Antonine Wall was turf & timber, and you have to get used to recognising types of ditches & a bit of imagination to appreciate it (and dodge lots of roads and canals that were built over it) – it’s uniqueness was in the stone Distance Slabs that each legion carved out – how those were integrated into that wall I don’t know. (Most can be found in the Huntarian Museum at Glasgow university).
To get back on subject, maybe – I think the border Reiver era was after the Roman control fell apart. There was obviously violence and many attacks throughout the occupation, but it might have only been after Severus’ scorched earth policy through the south of Scotland (and wholesale slaughter) that things became very unsettled – although, that was from 211, so I suppose fairly early on. Hoardes of silver found near Edinburgh show that Romans were likely trading happily well into ‘barbarian’ territory.
It is Wooliscroft (who I believe is the leading history/archaeological expert in Scottish Roman history) who suggests that the Iron Age communities (in Scottish regions) – remembering this age lasted 3000 years, not just 300! – lived peacefully in general, without the need for monetary exchange but with trade, in a non-centralised manner – and that perhaps this led to the difficulties the Romans had in ‘subduing’ the population – trade did take place, otherwise the marching legions could not have survived for months on end – but having any kind of administrative structure thrust on them was resisted. (I don’t give much credence to Tactus’ propaganda piece on Agricola’s great adventures.) Is there any use for money if you don’t have a central, controlling, administration? MMT says to me, no – money only works as a method of exchange if everyone agrees to it and trusts that central administration.
Thanks
I enjoyed that
Ravenglass is another favourite of mine – or rather, Eskdale, and the L’aal Ratty as the railway is called
As to the last point, I suspect the answer is no
Contrary,
Thanks for that travelogue, you should have a job with the Wall’s publicity team. I love Housesteads as it was a major Wall fort and in a beautiful location where you get superb views as well as get to walk on top of the wall , Arbeia is terrific too, it means “Arab” as there was allegedly an Arab Roman legion stationed there….and it is free and you don’t get much or free these days.
Would agree that money is not much use without a central controlling force, there have been successful local currencies ,the most successful probably l being the Swiss WIR system that has been around over a 100 years. And you have Bitcoin now, but that is not particularly a good money ,as well as money like Paypal and potentially Facebooks Libra. There was also an interesting period of Scottish free banking back like happened in Scotland in the 1700 and 1800s,whereby there was no central control. How free they were however is moot.
I do like to joke with my Scottish friends that the Romans spread civilisation across the most of Europe and and Africa world but when they got to Scotland they said “no its not worth the effort, we draw the line here and you can keep everything above it” : )
I’m a bit late with getting through Helen’s posts, but I’ll throw in my tuppence worth anyway.
Just to say that it’s thought that one of the biggest reasons that Britain – England really – was such a huge prize to the Roman Empire was because of its tin and silver reserves. England continued to be a hugely influential part of the Roman Empire, being stationed in Britain could make or break a Roman career (in Rome).
Hadrian’s Wall is a fascinating one too – the cost that went into building such a permanent stone edifice (most forts and barriers were turf and wood structures, and frontiers more like the German Limes, which was the longest frontier), and some think it either a vanity project, or Hadrian consolidating the empire’s extents. But not just the cost of building it, the military costs for manning it and maintaining it must have been huge. The continued raids into north Britain (Scotland), and repeated attempts to conquer the whole island appear to have been political rather than have value – most of the valuable assets, for the Romans, the silver and the tin, were already firmly held and we’re all in the southern parts of Britain.
Not really about money, sorry, just some context; when I read the part about silver mines being a driver for expanding the empire.
Didn’t the Scottish clans engage in a lot of cattle raiding including expeditions into England? In Applachian country in the United States which was settled by a lot of Scottish and Northern Ireland people it was famous for its blood feuds which was believed to be derived from cattle raiding tensions back in the old countries. If this is true then wouldn’t that be an argument for Hadrian’s Wall?
Helen,
I can beleive that old hatred were hard to die.
It probably would have helped to rebuild the wall, but the costs of patrolling it would have been astronomical. The border reivers on both sides made much wealth raiding back and forth and it went on for some 500 years to the annoyance of many a Scottish and English monarch, they were a law unto themselves even provoking war between the nations at times. They would even fight their own respective kings too if it served a purpose. William the Conquerers son the appointed an effective second King of England ,the role of Prince Bishop of Durham rather than a wall. Who in effect was the King in the North ,charged with maintaining a standing army to repel the Scots and Scottish Reivers, though the English reivers on the other side were just as bad at raiding into Scotland. Interestingly the Prince Bishop was also allowed to mint his own coin and levy taxes….a prerogative only the King in the south had at that time.
So England actually had two kings for quite some time.
: )
https://www.durhamworldheritagesite.com/learn/history/prince-bishops
@ Contrary
Well silver mines weren’t the only driver but also Italy didn’t have much in the way of silver deposits to mine. Now we know they also used bronze, copper and brass for coins as well as gold which tends to suggest the Romans ran a very tight ship to obtain the social stability to use base metals for coinage.