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Monday, February 21, 2011

Gold-Stater: Ancient Gold coin commentary Feb 22, 2011

Gold-Stater comment: The Invention of coinage was central to the creation of Democracy.

Ancient coins are generally divided into three categories: Greek, Roman, Byzantine. Of these three Greek, to my mind, is the most fascinating because the Greeks invented coinage, just as they invented Democracy - and civil law.

This isn't to say that civil contracts hadn't existed for thousands of years prior in Mesopotamia and the fertile Crescent. They had. But they were administered by Divinely appointed Judges, rather than civilian advocates - or rhetors - who persuaded committees of citizens by the eloquence of their arguments.

It is easy to forget that this Rhetoric was, in fact, the basis of Democracy. This Greek invention changed the fabric of the world in that, for the first time in history, Government was instituted wherein private citizens would persuade each other through the eloquence of argument rather than by Divine Right, or the force of arms.

Rhetoricians would persuade by Reason. The Greek word for "to reason" is Nomizo. The Greek word for "law" is Nomos. And the Greek word for "coin" is Nomos (hence "numismatics.")

It is only by considering this linguistic connection that we can truly appreciate the absolutely central role the invention of coinage played in the creation of Democracy.

Coinage, to be sure, was invented by Tyrants in Lydia (the black sea area of modern day Turkey). Allyates: father of Croesus, was responsible, in the late seventh century BCE, for minting the first series of ingots of precious metal stamped with seals that identified them as being of a certain weight and provenance.

But the invention transformed his country into a cauldron of private enterprise. Herodotus famously referred to Lydia as a "nation of shopkeepers." It should be understood that this term also comprised the idea of merchants and traders. Though the process is largely undocumented, we can infer that a tremendous amount of power and freedom was transferred from the Tyrant to the populace through coinage. That Croesus himself was described by Herodotus as a great patron of the arts, a lover of poetry, philosophy, sculpture and music lends credence to the idea that an empowered populace would not have been anathema to him

The mainland Greeks too were ruled by Tyrants during the seventh century BCE. But by the mid sixth century, as coinage spread down through Greece, so did Democracy.

In fact, the famous Athenian law-giver: Solon, visited the court of Croesus of Lydia and warned him of the dangers of confusing wealth with happiness. When Croesus was later conquered by Darios of Persia, he cried: "Oh, but I should have listened to Solon." When Darios asked what he meant, Croesus explained Solon's rationale for happiness existing at the heart of the Greek concept of the Private Citizen living a productive life of virtue, temperance and freedom. Darios spared his life.

In Athens Solon was responsible for laws governing the rights and responsibilities of the private citizen, as well as reforms of weights and standards governing the issuance of coinage. According to Aristotle, he legislated for all citizens to be admitted into the ecclesia (council) and for a court to be formed from all the citizens. By giving common people the power not only to elect officials but also to call them to account, Solon appears to have established the foundations of a true democracy. And though there are no contemporary records regarding Athenian coinage of the period, it speaks volumes that historians like Herodotus and Aristotle assumed that democratic standards of coinage and law (both described by the same word: Nomos) were equally central to Solon's reforms.

The Greek invention of coinage lasted about 2600 years - from the seventh century BCE all the way until 1970 when Richard Nixon abolished the precious metal standard of coinage and replaced it with pure fiat money issued and controlled by central banks - thus returning Political power back into the hands of Tyrants.

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