"Paper money" over 5000 years ago?

Posted by dbhalling 3 years, 11 months ago to Economics
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Well not paper, but clay. Interesting article that may clarify some nonsense about money and banking.
SOURCE URL: https://www.armstrongeconomics.com/research/monetary-history-of-the-world/historical-outline-origins-of-money/money-and-the-evolution-of-banking/

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  • Posted by $ MikeMarotta 3 years, 11 months ago
    I think the article cited is a bit early in its dating. The Code of Hammurabi is only about 1750 BCE. Cuneiform only to 2700 BCE. "5000 years" is a nice, round approximation, but sophisticated banking is not that old, though the roots of commerce truly are.

    Numeracy is the source of literacy. Counting led to writing. What was being counted was promises to the temple. The farm goods - sheep, kids, wheat, beer - were represented by clay tokens. The tokens were at first stored loose, then, 1000 years later, baked inside clay envelopes. You cannot see what is inside, so they impressed the tokens on the outside before baking it shut. Cuneiform evolved from representations of the tokens,
    See Denise Schmandt-Besserat's works:
    Before Writing (2 vols), University of Texas Press 1992;
    How Writing Came About, University of Texas Press 1996;
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  • Posted by scojohnson 3 years, 11 months ago
    The Knights Templar first amassed their power by providing security for travelers to the Holy Land. In addition to protecting the roads, they would also exchange the travelers' gold for a letter of credit that could be drawn from as needed along the trip by KT outposts, and the remainder issued (minus a fee) to them upon arrival. It was basically the first credit card.
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  • Posted by $ MikeMarotta 3 years, 11 months ago
    Bankers in the Middle Ages invented "pounds-shillings-pence" as abstract units of account. With a plethora of coinages - often debased over time - there was no convenient way to pay. (The German "mark" was a bar of silver; and marks were good money, too.) So, L-S-D meant that in whatever form you offered or accepted, there had to be a specified amount of good silver.

    Moreover, when they met at the Great Fairs, such as Champagne, bankers could clear their books without ever touching a coin.

    The importance of double-entry bookkeeping is greatly under-appreciated. It should be up there with Arabic numerals and algebra as an intellectual leap in progress.

    I have a reprint, Capitalism & Arithmetic by Frank J. Swetz (Open Court, 1987), which is an essay built around a reprint of The Treviso Arithmetic of 1478. The UK still calls its national treasury The Exchequer, but you really cannot run a modern enterprise (or a nation) by stacking counters on a checker board. You need long division and all that goes with it.
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  • Posted by LarryHeart 3 years, 11 months ago
    The article mentions Egypt and grain. That's 3,500 years ago where Joseph (one of the 12 Sons of Israel) , viceroy of Egypt, was the one who gathered the grain during the 7 years of plenty and traded that for land in the 7 years of famine. Way before Hammurabi.

    BTW Cuneiform according to carbon dating of Akkadian clay tablets is 10,00 years old. I do not believe carbon dating to be all that accurate unless they use the new detectors, which would show very different dates. However history dates the Akkadian civilization (Cuneiform was not a language, it was a code that could represent any language) whose clay tablets were found is approximately 5,000 years old.

    BTW Akkadian had the same roots as Hebrew as did most of the ancient languages, pointing to a common original language.
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    • Posted by $ MikeMarotta 3 years, 11 months ago
      Yes and no. 3500 years ago was a bit after Hammurabi (c. 1750 BCE).

      (2) The story of Joseph dates to no earlier than about 900-800 BCE.

      Cuneiform is not 10,000 years old. The tokens only go back to about 4000 BCE. Cuneiform came from representations of the tokens. The oldest cuneiform is dated also to about 4000 BCE, but must have come some generations later and a date closer to 3000 BCE is more likely. Realize that this is like saying that the Declaration of Independence was written between 1000 and 2000 CE. We can turn the page, but we cannot read the edge of the page.

      It is true that cuneiform was first used for Sumerian, which was not a Semitic language. The Semitic Akkadians conquered Sumeria and replaced its (unrelated and seemingly unique) language with their own. (Some Sumerian words were adopted into Akkadian.)

      It is true that Akkadian shows the roots of modern Semitic languages such as Arabic and Hebrew.

      It is not true that "most of the ancient languages" have the same roots as Hebrew. The linguistic revolutions that we can trace go back to about 8000 BCE. Theories about common ancestors deeper than that are compelling, but arguable. While the deep roots of language in animal calls cannot be denied, the actual conceptual use of language is another matter entirely. It is an interesting subject, but not much about it is as certain as the as the mass of an electron or the mass of Jupiter.
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  • Posted by Herb7734 3 years, 11 months ago
    Thanks for the lesson db.
    So, if I get this right, what was happening was that credit came before money which in reality was a sort of indication of wealth and an assurance of future payment.
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    • Posted by 3 years, 11 months ago
      Money really is a type of credit (IOU). In the example of the article the cuneiform represented so many units of grain. The cuneiform was an asset to the farmer and a liability to the grain house.
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      • Posted by Herb7734 3 years, 11 months ago
        Got it.
        When I was in business and discussing the nature of how profit and loss works, one of the most difficult things I had to point out was how money flows downhill. By that, I meant that the commodity is almost always purchased from whoever has the lowest price, unless some additional incentive is offered with it. Usually it was with a person who attributed this in a retailer as greed but as a consumer, just common sense. Because a retailer is making a profit.. I no longer bother having discussions with those types.
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  • Posted by $ blarman 3 years, 11 months ago
    Minor typo: "The absence of banking led to the [brake] down of trade and organization." Oops.

    Nice article, nevertheless, though I would have liked to have heard more about the Jewish bankers than an afterthought since the paper argues that they were an anomaly leading up to the Reformation.
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  • Posted by $ Olduglycarl 3 years, 11 months ago
    "If there is one lesson to be learned from history, it is that need for moderation in both directions of the economic pendulum."
    A strong will, the knowledge of moderation and a "Mind" to go with that...supersized if you like, is all it takes to accomplish that.
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