This connection between borrowing and lying, incidentally, is an important one to history. Herodotus remarked about the Persians: “To tell a lie is considered by them the greatest disgrace, and next to that to be in debt … especially because they think that one in debt must of necessity tell lies.”10 (Later, Herodotus reported a story told to him by a Persian about the origins of the gold that the Persians had acquired in India: they stole it from the nests of giant ants.)11 Jesus’s parable of the unforgiving servant makes a joke out of the matter (“Ten thousand talents? No problem. Just give me a little more time”), but even here, one can see how such endless falsehoods contributed to a broader sense that a world in which moral relations are conceived as debts is also, while in certain ways entertaining, necessarily a world of corruption, guilt, and sin.
By the time of the earliest Sumerian documents, this world may not yet have arrived. Still, the principle of lending at interest, even compound interest, was already familiar to everyone. In 2402 bc, for instance, a royal inscription by King Enmetena of Lagash—one of the earliest we have—complains that his enemy, the King of Umma, had been occupying a huge stretch of farmland that had rightfully belonged to Lagash for decades. He announces: if one were to calculate the rental fees for all that land, then the interest that would have been due on that rent, compounded annually, it would reveal that Umma now owes Lagash four and a half trillion liters of barley. The sum was, as in the parable, intentionally preposterous.12 It was just an excuse to start a war. Still, he wanted everyone to know that he knew exactly how to do the math.
Usury—in the sense of interest-bearing consumer loans—was also well established by Enmetena’s time. The king ultimately had his war and won it, and two years later, fresh off his victory, he was forced to publish another edict: this one, a general debt cancellation within his kingdom. As he later boasted, “he instituted freedom (amargi) in Lagash. He restored the child to its mother, and the mother to her child; he cancelled all interest due.”13 This was, in fact, the very first such declaration we have on record—and the first time in history that the word “freedom” appears in a political document.
Enmetena’s text is a bit vague on the details, but a half-century later, when his successor Uruinimgina declared a general amnesty during the New Year’s ceremonies of 2350 bc, the terms are all spelled out, and they conform to what was to become typical of such amnesties: cancelling not only all outstanding loans, but all forms of debt servitude, even those based on failure to pay fees or criminal penalties—the only thing excepted being commercial loans.
Similar declarations are to be found again and again, in Sumerian and later Babylonian and Assyrian records, and always with the same theme: the restoration of “justice and equity,” the protection of widows and orphans, to ensure—as Hammurabi was to put it when he abolished debts in Babylon in 1761 bc—“that the strong might not oppress the weak.”14 In the words of Michael Hudson,
The designated occasion for clearing Babylonia’s financial slate was the New Year festival, celebrated in the spring. Babylonian rulers oversaw the ritual of “breaking the tablets,” that is, the debt records, restoring economic balance as part of the calendrical renewal of society along with the rest of nature. Hammurabi and his fellow rulers signaled these proclamations by raising a torch, probably symbolizing the sun-god of justice Shamash, whose principles were supposed to guide wise and fair rulers. Persons held as debt pledges were released to rejoin their families. Other debtors were restored cultivation rights to their customary lands, free of whatever mortgage liens had accumulated.15
Over the next several thousand years, this same list—cancelling the debts, destroying the records, reallocating the land—was to become the standard list of demands of peasant revolutionaries everywhere. In Mesopotamia, rulers appear to have headed off the possibility of unrest by instituting such reforms themselves, as a grand gesture of cosmic renewal, a recreation of the social universe—in Babylonia, during the same ceremony in which the king reenacts his god Marduk’s creation of the physical universe. The history of debt and sin was wiped out, and it was time to begin again. But it’s also clear what they saw as the alternative: the world plunged into chaos, with farmers defecting to swell the ranks of nomadic pastoralists, and ultimately, if the breakdown continued, returning to overrun the cities and destroy the existing economic order entirely.
Egypt
(2650–716 BC)
Egypt represents an interesting contrast, since for most of its history, it managed to avoid the development of interest-bearing debt entirely.
Egypt was, like Mesopotamia, extraordinarily rich by ancient standards, but it was also a self-contained society, a river running through a desert, and far more centralized than Mesopotamia. The pharaoh was a god, and the state and temple bureaucracies had their hands in everything: there were a dazzling array of taxes and a continual distribution of allotments, wages, and payments from the state. Here, too, money clearly arose as a means of account. The basic unit was the deben, or “measure”—originally referring to measures of grain, and later of copper or silver. A few records make clear the catch-as-catch-can nature of most transactions:
In the 15th year of Ramses II [c. 1275 BC] a merchant offered the Egyptian lady Erenofre a Syrian slave girl whose price, no doubt after bargaining, was fixed at 4 deben 1 kite [about 373 grams] of silver. Erenofre made up a collection of clothes and blankets to the value of 2 deben 2 1/3 kite—the details are set out in the record—and then borrowed a miscellany of objects from her neighbors—bronze vessels, a pot of honey, ten shirts, ten deben of copper ingots—till the price was made up.16
Most merchants were itinerant, either foreigners or commercial agents for the owners of large estates. There’s not much evidence for commercial credit, however; loans in Egypt were still more likely to take the form of mutual aid between neighbors.17
Substantial, legally enforceable loans, the kind that can lead to the loss of lands or family members, are documented, but they appear to have been rare—and much less pernicious, as the loans did not bear interest. Similarly, we do occasionally hear of debt-bondservants, and even debt slaves, but these seem to have been unusual phenomena and there’s no suggestion that matters ever reached crisis proportions, as they so regularly did in Mesopotamia and the Levant.18
In fact, for the first several thousand years, we seem to be in a somewhat different world, where debt really was a matter of “guilt” and treated largely as a criminal matter:
When a debtor failed to repay his debt on time, his creditor could take him to court, where the debtor would be required to promise to pay in full by a specific date. As part of his promise—which was under oath—the debtor also pledged to undergo 100 blows and/or repay twice the amount of the original loan if he failed to pay by the date specified.19
The “and/or” is significant. There was no formal distinction between a fine and a beating. In fact, the entire purpose of the oath (rather like the Cretan custom of having a borrower pretend to snatch the money) seems to have been to create the justification for punitive action: so the debtor could be punished as either a perjurer or a thief.20
By the time of the New Kingdom (1550–1070) there is more evidence for markets, but it’s only by the time we reach the Iron Age, just before Egypt was absorbed into the Persian empire, that we begin to see evidence for Mesopotamian-style debt crises. Greek sources, for instance, record that the Pharaoh Bakenranef (reigned 720–715 bc) issued a decree abolishing debt bondage and annulling all outstanding liabilities, since “he felt it would be absurd for a soldier, perhaps at the moment when he was setting forth to fight for his fatherland, to be hauled off to prison by his creditor for an unpaid loan”—which, if true, is also one of the earliest mentions of a debt prison.21 Under the Ptolemies, the Greek dynasty that ruled Egypt after Alexander, periodic clean slates had become institutionized. It’s well known that the Rosetta Stone, written both in Greek and Egyptian, proved to be the key that made it pos
sible to translate Egyptian hieroglyphics. Few are aware of what it actually says. The stela was originally raised to announce an amnesty, both for debtors and for prisoners, declared by Ptolemy V in 196 bc.22
China
(2200–771 BC)
We can say almost nothing about Bronze Age India, since its writing remains indecipherable, and not much more about Early China. What little we do know—mainly culled from dribs and drabs in later literary sources—suggests that the earliest Chinese states were far less bureaucratic than their western cousins.23 There being no centralized temple or palace system with priests and administrators managing the storerooms and recording inputs and outputs, there was also little incentive to create a single, uniform unit of account. Instead, the evidence suggests a different path, with social currencies of various sorts still holding sway in the countryside and being converted to commercial purposes in dealings between strangers.
Later sources recall that early rulers “used pearls and jade as their superior method of payment, gold as their middle method of payment, and knives and spades as their lower method of payment.”24 The author can only be talking about gifts here, and hierarchical ones at that: kings and great magnates rewarding their followers for services in theory rendered voluntarily. In most places, long strings of cowrie shells figure prominently, but even here, though we often hear of “the cowrie money of early China,” and it’s easy enough to find texts in which the value of sumptuous gifts are measured in cowries, it’s never clear whether people were really carrying them around to buy and sell things in the marketplace.25
The most likely interpretation is that they were carrying the shells, but for a long time marketplaces themselves were of minor significance, so this use was not nearly as important as the usual uses for social currencies: marriage presents, fines, fees, and tokens of honor.26 At any rate, all sources insist that there was a wide variety of currencies in circulation. As David Scheidel, one of the premier contemporary scholars of early money, notes:
In pre-imperial China, money took the form of cowrie shells, both originals and—increasingly—bronze imitations, tortoise shells, weighed gold and (rarely) silver bars, and most notably—from at least 1000 BC onward—utensil money in the shape of spade blades and knives made of bronze.27
These were most often used between people who didn’t know each other very well. For tabulating debts between neighbors, with local vendors, or with anything having to do with the government, people appear to have employed a variety of credit instruments: later Chinese historians claimed that the earliest of these were knotted strings, rather like the Inca khipu system, and then later, notched strips of wood or bamboo.28 As in Mesopotamia, these appear to have long predated writing.
We don’t really know when the practice of lending at interest first reached China either, or whether Bronze Age China came to see the same sorts of debt crises as occurred in Mesopotamia, but there are tantalizing hints in later documents.29 For instance, later Chinese legends about the origin of coinage ascribed the invention to emperors trying to relieve the effects of natural disasters. One early Han text reports:
In ancient times, during the floods of Yu and the droughts of Tang, the common people became so exhausted that they were forced to borrow from one another in order to obtain food and clothing. [Emperor] Yu coined money for his people from the gold of Mount Li and [Emperor] Tang did likewise from the copper of Mount Yan. Therefore the world called them benevolent.30
Other versions are a little more explicit. The Guanzi, a collection that in early imperial China became the standard primer on political economy, notes “There were people who lacked even gruel to eat, and who were forced to sell their children. To rescue these people, Tang coined money.”31
The story is clearly fanciful (the real origins of coined money were at least a thousand years later), and it is very hard to know what to make of it. Could this reflect a memory of children being taken away as debt sureties? On the face of it, it seems more like starving people selling their children outright—a practice that was later to become commonplace in certain periods of Chinese history.32 But the juxtaposition of loans and the sale of children is suggestive, especially considering what was happening on the other side of Asia at exactly the same time. The Guanzi later goes on to explain that these same rulers instituted the custom of retaining 30 percent of the harvest in public granaries for redistribution in emergencies, so as to ensure that this would never happen again. In other words, they began to set up just the kind of bureaucratic storage facilities that, in places like Egypt and Mesopotamia, had been responsible for creating money as a unit of account to begin with.
Chapter Nine
THE AXIAL AGE
(800 BC – 600 AD)
Let us designate this period as the “axial age.” Extraordinary events are crowded into this period. In China lived Confucius and Lao Tse, all the trends in Chinese philosophy arose … In India it was the age of the Upanishads and of Buddha; as in China, all philosophical trends, including skepticism and materialism, sophistry and nihilism, were developed.
—Karl Jaspers, Way to Wisdom
THE PHRASE “THE AXIAL AGE” was coined by the German existentialist philosopher Karl Jaspers.1 In the course of writing a history of philosophy, Jaspers became fascinated by the fact that figures like Pythagoras (570–495 bc), the Buddha (563–483 bc), and Confucius (551–479 bc), were all alive at exactly the same time, and that Greece, India, and China, in that period, all saw a sudden efflorescence of debate between contending intellectual schools, each group apparently, unaware of the others’ existence. Like the simultaneous invention of coinage, why this happened had always been a puzzle. Jaspers wasn’t entirely sure himself. To some extent, he suggested, it must have been an effect of similar historical conditions. For most of the great urban civilizations of the time, the early Iron Age was a kind of pause between empires, a time when political landscapes were broken into a checkerboard of often diminutive kingdoms and city-states, most often at constant war externally and locked in constant political debate within. Each case witnessed the development of something akin to a drop-out culture, with ascetics and sages fleeing to the wilderness or wandering from town to town seeking wisdom; in each, too, they were eventually reabsorbed into the political order as a new kind of intellectual or spiritual elite, whether as Greek sophists, Jewish prophets, Chinese sages, or Indian holy men.
Whatever the reasons, the result, Jaspers argued, was the first period in history in which human beings applied principles of reasoned inquiry to the great questions of human existence. He observed that all these great regions of the world, China, India, and the Mediterranean, saw the emergence of remarkably parallel philosophical trends, from skepticism to idealism—in fact, almost the entire range of positions about the nature of the cosmos, mind, action, and the ends of human existence that have remained the stuff of philosophy to this day. As one of Jaspers’ disciples later put it—overstating only slightly—“no really new ideas have been added since that time.”2
For Jaspers, the period begins with the Persian prophet Zoroaster, around 800 bc, and ends around 200 bc, to be followed by a Spiritual Age that centers on figures like Jesus and Mohammed. For my own purposes, I find it more useful to combine the two. Let us define the Axial Age, then, as running from 800 bc to 600 ad.3 This makes the Axial Age the period that saw the birth not only of all the world’s major philosophical tendencies, but also, all of today’s major world religions: Zoroastrianism, Prophetic Judaism, Buddhism, Jainism, Hinduism, Confucianism, Taoism, Christianity, and Islam.4
The attentive reader may have noticed that the core period of Jasper’s Axial age—the lifetimes of Pythagoras, Confucius, and the Buddha—corresponds almost exactly to the period in which coinage was invented. What’s more, the three parts of the world where coins were first invented were also the very parts of the world where those sages lived; in fact, they became the epicenters of Axial Age religious and philosophical creativity: the k
ingdoms and city-states around the Yellow River in China, the Ganges valley in northern India, and the shores of the Aegean Sea.
What was the connection? We might start by asking: What is a coin? The normal definition is that a coin is a piece of valuable metal, shaped into a standardized unit, with some emblem or mark inscribed to authenticate it. The world’s first coins appear to have been created within the kingdom of Lydia, in western Anatolia (now Turkey), sometime around 600 bc.5 These first Lydian coins were basically just round lumps of electrum—a gold-silver alloy that occurred naturally in the nearby Pactolus River—that had been heated, then hammered with some kind of insignia. The very first, stamped only with a few letters, appear to have been manufactured by ordinary jewelers, but these disappeared almost instantly, replaced by coins manufactured in a newly established royal mint. Greek cities on the Anatolian coast soon began to strike their own coins, and they came to be adopted in Greece itself; the same thing occurred in the Persian Empire after it absorbed Lydia in 547 bc.