Debt: The First 5000 Years Part 17

10.Of course the very first coins were of fairly high denominations and quite possibly used for paying taxes and fees, and for buying houses and cattle more than for everyday purchases (Kraay 1964, Price 1983, Schaps 2004, Vickers 1985). A real market society in Greece, for instance, could only be said to exist when, as in the fifth century, ordinary citizens went to the market carrying minuscule coins of stamped silver or copper in their cheeks.

11. First proposed by Cook (1958), the explanation has since lost favor (Price 1983, Kraay 1964, Wallace 1987, Schaps 2004:96101; though cf. Ingham 2004:100)-largely, on the argument that one cannot pay soldiers with coins unless there are already markets with people willing to accept the coins. This strikes me as a weak objection, since the absence of coinage does not imply the absence of either money or markets; almost all parties to the debate (e.g., Balmuth [1967, 1971, 1975, 2001) who argues that irregular pieces of silver were already in wide use as currency, and Le Rider (2001), Seaford (2004:31837) or for that matter Schaps (2004:22235), who argue that they were not numerous enough to be a viable everyday currency, seem to give much consideration to the possibility that most market trade took place on credit. Anyway, as I've noted earlier, it would be easy enough for the state to ensure that the coins became acceptable currency simply by insisting that they were the only acceptable means of payment for obligations to the state itself.

12. Most of the earliest known Greek bankers were of Phoenician descent, and it's quite possible that they first introduced the concept of interest there (Hudson 1992).

13. Elayi & Elayi 1992.

14. Starr 1977:113; see Lee 2000.

15. It's interesting to note that, to our knowledge, the great trading nations did not produce much in the way of great art or philosophy.

16. The great exception was of course Sparta, which refused to issue its own coinage but developed a system whereby aristocrats adopted a strict military lifestyle and trained permanently for war.

17. Aristotle himself noted the connection when he emphasized that the const.i.tution of a Greek state could be predicted by the main army of its military: aristocracies if they relied on cavalry (since horses were very expensive), oligarchies in the case of heavy infantry (since armor was not cheap), democracy in the case of light infantry or navies (since anyone could wield a sling or row a boat) (Politics 4.3.1289b3344, 13.1297b1624, 6.7.1321a614).

18. Keyt (1997:103) summarizing Politics 1304b2731.

19. Thucydides (6.97.7) claimed that 20,000 escaped from the mines in 421 bc, which is probably exaggerated, but most sources estimate at least 10,000 for most of that century, generally working shackled and under atrocious conditions (Robinson 1973).

20. Ingham 2004:99100.

21. MacDonald 2006:43.

22. On Alexander's armies monetary needs, Davies 1996:80 in turn, 83; on his logistics more generally, Engels 1978. The figure 120,000 includes not only actual troops but servants, camp-followers, and so forth.

23. Green 1993:366.

24. The Roman inst.i.tution was called nexum, and we don't know entirely how it worked: i.e., whether it was a form of labor contract, whereby one worked off the debt for a fixed term, or something more like African p.a.w.n systems, where the debtor-and his or her children-served in conditions roughly like those of a slave until redemption (see Testart 2002 for the possibilities). See Buckler 1895, Brunt 1974, Cornell 1994:26667, 33032.

25. Hence, most of the scandalous stories that sparked uprisings against debt bondage centered on dramatic cases of physical or s.e.xual abuse; of course, once debt bondage was abolished and household labor was instead supplied by slaves, such abuse was considered normal and acceptable.

26. The first bronze coins paid to soldiers seem to have been coined around 400 bc (Scheidel 2006), but this was the traditional date according to Roman historians.

27. What I am arguing flies in the face of much of the conventional scholarly wisdom, summed up best perhaps by Moses Finley when he wrote "in Greece and Rome the debtor cla.s.s rebelled; whereas in the Near East they did not"-and therefore reforms like those of Nehemiah were at least minor, temporary palliatives. Near Eastern rebellion took a different form; moreover, Greek and Roman solutions were both more limited and more temporary than he supposed.

28. Ioannatou 2006 for a good example. Cataline's conspiracy of 63 bc was an alliance of indebted aristocrats and desperate peasants. On continued Republican debt and land redistribution campaigns: Mitch.e.l.l 1993.

29. Howgego makes this point: "If less is heard of debt under the Princ.i.p.ate it may well be because political stability removed the opportunity for the expression of discontent. This argument is supported by the way in which debt re-emerges as an issue at times of open revolt" (1992:13).

30. Plutarch, Moralia, 828f-831a.

31. There is, needless to say, a vast and conflicting literature, but probably the best source is Banaji (2001). He emphasizes in the late empire, "debt was the essential means by which employers enforced control over the supply of labour, fragmenting the solidarity of workers and 'personalizing' relations between owners and employees" (ibid:205), a situation he compares interestingly to India.

32. Kosambi 1966, Sharma 1968, Misra 1976, Altekar 1977:10938. Contemporary Indian historians, who refer to them as gana-sanghas ("tribal a.s.semblies"), tend to dismiss them as warrior aristocracies supported by populations of helots or slaves, though of course, Greek city-states could be described the same way.

33. In other words, they looked more like Sparta than like Athens. The slaves were also collectively owned (Chakravarti 1985:4849.) Again, one has to wonder how much this was really the general rule, but I yield to the predominant scholarly opinion on such matters.

34. Arthasastra 2.12.27. See Schaps 2006:18 for a nice comparative commentary.

35. Thapar 2002:34, Diks.h.i.tar 1948.

36. There were also taxes, of course, usually ranging from 1/6 to 1/4 of total yield (Kosambi 1996:316; Sihag 2005), but taxes also served as a way to bring goods to the market.

37. So Kosambi 1966:15257.

38. And wage labor, two phenomena that, as so often in the ancient world, largely overlapped: the common phrase for workers used in texts from the period was dasa-karmakara, "slave-hireling" with the a.s.sumption that slaves and laborers worked together and were barely distinguishable (Chakravarti 1985). On the predominance of slavery, see Sharma 1958, Rai 1981. The extent is contested, but early Buddhist texts do seem to a.s.sume that any wealthy family would normally have domestic slaves-which certainly wasn't true in other periods.

39. Punch-marked coins were also eventually replaced, after Alexander's brief conquest of the Indus Valley and his establishment of Greek colonists in Afghanistan, by Aegean-style coins, ultimately causing the entire Indian tradition to disappear (Kosambi 1981, Gupta & Hardaker 1985.) 40. It's referred to as the "Pillar Edict" (Norman 1975:16).

41. There's a good deal of debate as to when: Schopen (1994) emphasizes there is little evidence for substantial Buddhist monasteries until the first century ad, perhaps three centuries later. This has a great deal of bearing on monetarization too, as we'll see.

42. "The private trader was regarded as a thorn (kantaka), a public enemy just short of a national calamity, by Arth. 4.2, taxed and fined for malpractices of which many are taken for granted" (Kosambi 1996:243).

43. Those wishing to become monks had to first affirm that they were not themselves debtors (just as they also had to promise they weren't runaway slaves); but there was no rule saying the monastery itself could not lend money. In China, as we'll see, providing easy credit terms for peasants came to be seen as a form of charity.

44. Similarly, Buddhist monks are not allowed to see an army, if they can possibly avoid it (Pacittiya, 4851).

45. Lewis 1990.

46. Wilbur 1943, Yates 2002. The state of Qin, during the Warring States period, not only allowed for army officers to be allocated slaves by rank, but for merchants, craftsmen, and the "poor and idle" to themselves be "confiscated as slaves" (Lewis 1990:6162).

47. Scheidel (2006, 2007, 2009) has considered the matter at length and concluded that Chinese currency took the unusual form that it did for two maibn reasons: (1) the historical coincidence that Qin (which used bronze coins) defeated Chu (which used gold) in the civil wars, and subsequent conservatism, and (2) the lack of a highly paid professional army, which allowed the Chinese state to act like the early Roman republic, which also limited itself to bronze coins for peasant conscripts-but unlike the Roman republic, was not surrounded by states accustomed to other forms of currency.

48. Pythagoras was, as far as we know, the first to take the latter course, founding a secret political society that for a while had control over the levers of political power in the Greek cities of southern Italy.

49. Hadot 1995, 2002. In the ancient world, Christianity was recognized as a philosophy largely because it had its own forms of ascetic practice.

50. On the Tillers: Graham 1979, 1994:67110. They seem to have flourished around the same time as Mo Di, the founder of Mohism (roughly 470391 bc). The Tillers ultimately vanished, leaving behind mainly a series of treatises on agricultural technology, but they had a tremendous influence on early Taoism-which, in turn, became the favorite philosophy for peasant rebels for many centuries to come, starting with the Yellow Turbans of 184 ad. Eventually, Taoism was displaced by messianic forms of Buddhism as the favorite ideology of rebellious peasants.

51. Wei-Ming 1986, Graham 1989, Schwartz 1986.

52. Legend has it that after one Pythagorean mathematician discovered the existence of irrational numbers, other members of the sect took him on a cruise and dropped him overboard. For an extended discussion of the relation of early Pythagoreanism (530400 bc) to the rise of a cash economy, see Seaford 2004:26675).

53. At least if my own experience in Madagascar is anything to go on.

54. War is quite similar: it's also an area in which it's possible to imagine everyone as playing a game where the rules and stakes are unusually transparent. The main difference is that in war one does care about one's fellow soldiers. On the origins of our own notion of "self-interest," see chapter 11 below.

55. Not to be confused with the unrelated Confucian term li, meaning "ritual" or "etiquette." Later, li became the word for "interest"-that is, not only "self-interest," but also "interest payment" (e.g., Cartier 1988:2627). I should note that my argument here is slightly unconventional. Schwartz (1985:14551) notes that in Confucius, "profit" has a purely pejorative meaning, and he argues that it was subversively reinterpreted by Mo Di. I find it unlikely that Confucius represents conventional wisdom at this time; while his writings are the earliest we have on the subject, his position was clearly marginal for centuries after his death. I am a.s.suming instead that the Legalist tradition reflected the common wisdom even before Confucius-or certainly, Mencius.

56. Zhan Guo Ce ("Strategies of the Warring States") no. 109, 7.175 57. Annuals of Lu Buwei, 8/5.4.

58. See Ames (1994) for a discussion of key terms: si li (self-interest), shi (strategic advantage), and li min (public profit).

59. Book of Lord Shang 94748, Duyvendak 1928:65.

60. Kosambi's translation (1965:142); the Encyclopedia Britannica prefers "handbook on profit" (entry for "Crvka"); Altekar (1977:3), "the science of wealth."

61. Nag & Diks.h.i.tar 1927:15. Kosambi argues that the Mauryan polity was thus based on a fundamental contradiction: "a moral law-abiding population ruled by a completely amoral king" (1996:237). Yet such a situation is hardly unusual, before or since.

62. Thucydides 5.85-113 (cf. 3.3649). The event took place in 416 bc, around the same time that Lord Shang and Kautilya were writing. Significantly, Thucydides' own objections to such behavior are not explicitly moral but center on showing that it was not to the "long-term profit" of the empire (Kallet 2001:19). On Thucydides' own utilitarian materialism more generally, see Sahlins 2004.

63. Mozi 6:7B, in Hansen 2000:137 64. Mencius 4.1, in Duyvendak 1928:7677. He appears to be referring to a distinction originally made by Confucius himself: "the superior person understands what is right while the inferior person only understands what is personally profitable" (a.n.a.lects 7.4.16).

65. The Mohist path-overtly embrace financial logic-was the less well trodden. We've already seen how in India and Greece, attempts to frame morality as debt went nowhere: even the Vedic principles are ostensibly about liberation from debt, which was also, as we've seen, a central theme in Israel.

66. Leenhardt 1979:164.

67. This interpretation does fly fairly directly in the face of the main thrust of scholarship on the issue, which tends instead to emphasize the "transcendental" nature of Axial Age ideas (e.g., Schwartz 1975, Eisenstadt 1982, 1984, 1986, Roetz 1993, Bellah 2005).

68. The Greek system actually began with Fire, Air, and Water, and the Indian with Fire, Water, and Earth, though in each case there were numerous elaborations. The Chinese elemental system was fivefold: Wood, Fire, Earth, Metal, Water.

69. In Christianity, at least in the Augustinian tradition, this is quite explicit: the material world does not in any sense partake of G.o.d; G.o.d is not in it; it was simply made by Him (De civitate dei 4. 12)-this radical separation of spirit and nature being-according to Henri Frankfort (1948:34244)-a peculiarity of the Judaeo-Christian tradition. That same Augustinian tradition, though, also drew on Plato to insist that reason, on the other hand-the abstract principle which allows us to understand such things, and which is entirely separate from matter-does partake of the divine (see Hoitenga 1991:11214, for the conflict in Augustine's own ideas here).

70. Sh.e.l.l's essay "The Ring of Gyges" (1978) has already been cited in the last chapter, in my discussion of Plato; Seaford 1998, 2004.

71. This is based on the fact that Miletus was one of the cities, if not the first city, to produce coins of small enough denominations that they could be used for everyday transactions (Kraay 1964:67).

72. Herac.l.i.tus was from the nearby Ionian city of Ephesus and Pythagoras originally from the Ionian island of Samos. After Ionia was incorporated into the Persian empire, large numbers of Ionians fled to southern Italy, which then became the center of Greek philosophy, again, at just the period when the Greek cities there became thoroughly monetarized. Athens became the center of Greek philosophy only in the fifth century, which is also when Athens was militarily dominant and the Athenian "owl" coinage became the main international currency of the Eastern Mediterranean.

73. Or as Seaford (2004:208) puts it, echoing Anaximander's description of his primal substance, "a distinct, eternal, impersonal, all-embracing, unlimited, h.o.m.ogeneous, eternally moving, abstract, regulating substance, destination for all things as well as their origin" (or, at least, "all things" that were available for purchase.) 74. Seaford 2004:13646; see Picard 1975; Wallace 1987; Harris 2008a:10. Purely "fiduciary" money is of course what a metallist would call "fiat" or "token" money, or a Keynesian, "chartal money." Despite Finley's arguments to the contrary (1980:141, 196), just about all ancient money was fiduciary to some extent. It's easy to see why coins would ordinarily circulate at a higher face value than their weight in gold or silver, since the price of the latter would tend to fluctuate, but the moment the coin's face value was lower than that of its metal content, there would be no reason not to melt it down.

75. In the case of truly large states like the Roman or Mauryan empires, inflation did eventually result, but the full effects were not felt for at least a century (see Ingham 2002:1014, Kessler & Temin 2008, Harris 2008b for some good discussions of the Roman situation.) 76. Seaford 2004:13839.

77. I am partly inspired here by Marcel Mauss's arguments about of the concept of substance (Allen 1998).

78. Hence, as we'll see Aristotle's position that a coin was only a social convention (Nicomachean Ethics 1133a2931) remained very much a minority view in the ancient world. It did become the predominant view later, in the Middle Ages.

79. He is known as Pysi in the Buddhist scriptures, Paesi in the Jaina (see Bronkhorst 2007:143159 for a good discussion of these earliest Indian materialists; for the later materialist school, to which Kautilya is said to belong, see Chattopadhyaya 1994. Jaspers (1951:135), writing of India, notes the appearance of "all philosophical trends, including skepticism and materialism, sophistry and nihilism"-a significant list, since it's obviously not a list of "all" philosophical trends at all, but only the most materialist.

80. In The Republic it is rejected out of hand. In India, as I've argued, the Hindu tradition only appears to embrace it. Buddhists, Jains, and other oppositional philosophies didn't use the term at all.

81. Philo of Alexandria, writing around the time of Christ, says of the Essenes: "not a single slave is to be found among them, but all are free, exchanging services with each other, and they denounce the owners of slaves, not merely for their injustice in outraging the law of equality, but also for their impiety in annulling the statute of nature" (Quod omnis probus liber sit 79). The Therapeutae, another Jewish group, group rejected all forms of property, but looked on slavery "to be a thing absolutely and wholly contrary to nature, for nature has created all men free" (De Vita Contemplativa 70). The similarity to Roman law ideas is notable. Jewish groups are unusually well doc.u.mented; if similar sects existed in, say, Thrace, or Numidia, we probably wouldn't know.

82. Later legend had it that his father was a king and he grew up in a palace, but the Sakya "king" of the time was in fact a elected and rotating position (Kosambi 1965:96).

Chapter Ten.

1. Coins produced by the barbarian successor states generally did not have a great deal of gold or silver in them; as a result they tended to circulate only within the princ.i.p.ality of the king or baron who issued them and were largely useless for trade.

2. Dockes (1979:6270) provides a good overview of the situation-literally, since current understandings of the extent of Roman slave estates in France are based largely on aerial photography. Over time even the free communities largely ended up in debt peonage of one sort or another, or bound to the land as serfs (in Latin, coloni).

3. As we've seen, Kosambi saw Magadha as a peak of monetarization. R.S. Sharma (2001:11962) argues that coinage remained commonplace under the Guptas (280 to 550 ad) but then abruptly disappeared almost everywhere thereafter. However, even if he is right that the total number of coins in circulation did not diminish until then, he himself points out (ibid:143) that the total population of the Ganges Plain almost tripled over this period, so even this would mark a steady decline.

4. For an overview: R.S. Sharma 1965, Kane 1968 III:41161, Chatterjee 1971. Schopen (1994) especially emphasizes that the techniques grow more sophisticated over the course of the Middle Ages, for instance, developing bookkeeping techniques for combining compound interest with partial repayments.

5. Doc.u.ments on the regulation of monastic affairs pay a great deal of attention to the details: how when the money was lent out, contracts would be signed, sealed, and deposited in the temple before witnesses; how a surety or pledge worth twice the amount of the loan should be turned over, how "devout lay brothers" should be a.s.signed to manage the investment, and so forth (Schopen 1994).

6. From the Arab dinar, which in turn derives from the Roman denarius. It is unclear whether such sums were actually paid in coins at this point: one early monastic manual, for example, speaking of objects that might be relegated to the Inexhaustible Treasuries and thus put out at interest, mentions "gold and silver, whether in the form of coins, finished or raw, in large or small quant.i.ties, pure or alloyed, or whether in the form of utensils, finished or unfinished" (Mahsmghika Vinaya, in Gernet 1956 [1995:165]).

7. Fleet 1888: 26062, as translated in Schopen 1994:53233. One need hardly remark on the irony of this emphasis on eternity emerging within Buddhism, a religion founded on the recognition of the impermanence of all worldly attachments.

8. The commercial loans are doc.u.mented from an inscription at the West Indian monastery at Karle (Levi 1938: 145; Gernet 1956 [1995:164]; Barreau 1961:44447), the a.s.semblies from later Tamil temples (Ayyar 1982:4068, R.S. Sharma 1965.) It is not clear whether some of these were commercial loans, or more like the later Buddhist custom of jisa still current in Tibet, Bhutan, and Mongolia, where an individual, or collective, or group of families wishing to support a specific ceremony or, say, an educational project might receive a 500-rupee loan "in perpetuity" and then be expected to provide 800 rupees a year to organize the ceremony. The responsibilities are then inherited, though the "loan" can be transferred (Miller 1961, Murphy 1961).

9. Kalhana, Rajatarangini 7.109198; see Basham 1948, Riepe 1961:44n49.) The monks were apparently Ajivkas, who still existed at this time.

10. Naskar 1996, R.S. Sharma 2001:4566, on the Puranic description of the "Kali age," which seems to be the way later Brahmins referred to the period from roughly Alexander's reign to the early Middle Ages, a period of insecurity and unrest when foreign dynasties ruled much of India, and caste hierarchies were widely challenged or rejected.

11. Ma.n.u.smrti 8.5.257. Significantly, the debt to other humans vanishes entirely in these texts.

12. Ma.n.u.smrti 8.5.27072. A Sudra's tongue would also be cut off for insulting a member of the twice-born castes (8.270).

13. R.S. Sharma 1958, 1987, Chauhan 2003.

14. "A Sudra, though emanc.i.p.ated by his master, is not released from a state of servitude, for a state which is natural to him, by whom can he be divested?" (Ma.n.u.smrti, Yjnavalkya Smrti 8.5.419), or even "Sudras must be reduced to slavery, either by purchase or without purchase, because they were created by G.o.d for the sake or serving others (8.5.413).

15. Kautilya allowed 60 percent for commercial loans, 120 percent "for enterprises that involve journeys through forests," and twice that for those that involve shipping goods by sea (Arthasastra 3.11; one later code, Yjnavalkya Smrti 2.38 follows this.) 16. Yjnavalkya Smrti 2.37, Ma.n.u.smrti 8.143, Visnusmrti 5.6.2, see Kane 1968 III:421.

17. R.S. Sharma 1965:68. Similarly, early law-codes specified that anyone who defaulted on a debt should be reborn as a slave or even a domestic animal in their creditor's household: one later Chinese Buddhist text was even more exact, specifying that for each eight wen defaulted, one must spend one day as an ox, or for each seven, one day as a horse (Zhuang Chun in Peng 1994:244n17) 18. Dumont (1966).

19. Gyan Prakash (2003:184) makes this point for the colonial period: when one-time caste hierarchies began to be treated instead as matters of debt bondage, subordinates turned into persons who had equal rights, but whose rights were temporarily "suspended."

20. To be fair, one could also argue that indebted peasants are also likely to be in command of more resources, and thus be more capable of organizing a rebellion. We know very little about popular insurrections in Medieval India (though see Guha (1999). Palat (1986, 1988:20515; Kosambi 1996:39293), but the total number of such revolts seems to have been relatively low in comparison to Europe and certainly in comparison to China, where rebellion was almost ceaseless.

21. "No one knows just how many rebellions have taken place in Chinese history. From the official record there were several thousand incidents within just three years from 613 to 615 ad, probably one thousand events a year (Wei Z. ad 656: ch. "Report of the Imperial Historians"). According to Parsons, during the period 162944, there were as many as 234,185 insurrections in China, averaging 43 events per day, or 1.8 outbreaks per hour" (Deng 1999:220).

22. Following Deng (1999).

23. Huang 1999:231.

24. These loans appear to have been an extension of the logic of the state granaries, which stockpiled food; some to sell at strategic moments to keep prices low, some to distribute free in times of famine; some to loan at low interest to provide an alternative to usurers.

25. Huang op cit; cf. Zhuoyun & Dull 1980:2224. For his complex currency reforms: Peng 1994:11114.

26. Generally, interest rates were set at a maximum of 20 percent and compound interest was banned. Chinese authorities eventually also adopted the Indian principle that interest should not be allowed to exceed the princ.i.p.al (Cartier 1988:28; Yang 1971:92103).

27. Braudel 1979; Wallerstein 1991, 2001.

28. I am here especially following the work of Boy Bin Wong (1997, 2002; also Mielants 2001, 2007.) Granted, most Braudelans only see later dynasties like the Ming as fully embodying this principle, but I think it can be projected backwards.

29. So, for instance, while markets themselves were considered beneficial, the government also systematically intervened to prevent price fluctuations, stockpiling commodities when they were cheap and releasing them if prices rose. There were periods of Chinese history when rulers made common cause with merchants, but the result was usually a major popular backlash (Deng 1999:146).