Review of Coins, Bodies, Games, and Gold, by Leslie Kurke, Princeton University Press, Princeton, New Jersey, 1999; xxi, 385; paper $29.95 (ISBN 0-691-00736-5), cloth $65.00 (ISBN 0-691-01731-X). Reviewed by L. Randall Wray, University of Missouri—Kansas City.

We all know the orthodox story about the origins of coins. A commodity money functioning as a medium of exchange replaced inconvenient barter. Eventually, societies settled on precious metals due to their inherent characteristics (high value-to-weight, divisibility, and so on), which were later stamped to indicate fineness and to reduce counterfeiting. At the same time, it has long been established that the first coins were issued in Lydia and East Greece, probably no earlier than the third or fourth quarter of the seventh century B.C.. The dating is puzzling, because we also know that money, local markets, long-distance trade, and even complex financial instruments existed for several thousands of years before coins were invented. If precious metal coins were indeed invented to reduce transactions costs, one wonders why it took so long for sophisticated traders to discover them. Further, as Innes (1913) has pointed out, while coins might have been important to the Greek world and perhaps to the Roman world, they played a relatively unimportant role throughout most of European history—with bills of exchange far more important for long-distance trade and with tally sticks or entries on merchant ledgers sufficient to finance domestic trade (a point confirmed by recent scholarship, such as that of McIntosh 1988). Unfortunately, economists—even Institutionalists—have paid far too little attention to this paradox.

Numismatists and cultural archeologists have been, at least recently, more reluctant to impose modern economistic thinking on early societies. As Polanyi warned long ago, the Greek economy was "embedded" in other noneconomic institutions, "the economic process itself being instituted through kinship, marriage, age-groups, secret societies, totemic associations, and public solemnities." (Polanyi 1968 p. 84) Leslie Kurke, Professor of Classics and Comparative Literature at the University of California—Berkeley, tackles this subject from a close analysis of the literary texts of the period, sans economistic blinders. While, as she admits, "this is a hard book to characterize"—and, I might add, a difficult book to read—it provides an analysis that I found to be eminently engaging and largely consistent with an Institutionalist approach. Indeed, Kurke approvingly quotes the passage from Polanyi above, and carefully adopts the embedded/disembedded dichotomy throughout her book, arguing "the fact of an embedded economy must make a difference to the causes for the invention of coinage". (p. 5) The two main questions she attempts to answer are: Why were coins introduced?, and, Did this represent a conceptual revolution?

She begins by quoting an intriguing passage from Herodotus:

The Lydians use customs very similar to those of the Greeks, apart from the fact that they prostitute their female children. And first of men whom we know, they struck and used currency of gold and silver, and they were also the first retail traders. And the Lydians themselves claim that also the games that now exist for them and for the Greeks were their invention. (p. 3) Note how Herodotus juxtaposes prostitution, coinage, retail trade, and games—all (inaccurately) attributed to the Lydians, who are otherwise supposed to be much like the Greeks. As Kurke wonders, "why do all these phenomena form a natural class for the historian (if they do)? In a sense, the entire discussion that follows is an attempt to make this a comprehensible list: to explain why it is especially so for a mid-fifth-century writer and why it occurs in Herodotus’s Histories." (pp. 3-4) Her discussion is based primarily on literary texts, although there is also some analysis of art (of an erotic nature, with photographs). There are two problems. First, as she emphasizes, "we possess only 5 to 10 percent of the original literary and artistic production" (xi). Second, while prostitution, games, and retail trade are frequently discussed and linked in the literature, coinage is virtually never discussed (at least in a positive sense; almost all references are to counterfeiting). One might conclude that coinage must have been quite unimportant, meriting barely a mention. Quite the contrary, Kurke insists, pointing to ample precedent in psychoanalysis, deconstructionism, and Marxist criticism for concern with what the texts don’t say. She also notes that the greatest Greek democracy, Athens, produced not a single text supportive of democracy—rather, all contemporaneous discussion of Athenian political theory was written by a hostile elite. While her line of argument might appear far-fetched, one can imagine the cultural archeologist in 4050 studying today’s economic textbooks. As Heilbroner (1999) has famously argued, the word "capitalism" almost never appears in any current text. Is one to conclude that capitalism is not important at the turn of the new millennium? Or, does the deafening silence tell us more about the ideology of the brown-nosing sycophants who write textbooks? Is capitalism never mentioned because of its overriding dominance in our modern society?

Kurke notes that Kraay (1964) revolutionized numismatics when he argued that coins were invented to standardize payments made by and to the state. He challenged the economist’s assumption that coins originated to facilitate trade by noting that the early denominations were too large, that circulation of coins was too narrow, and that use of coins was limited to Greeks while trade existed for thousands of years without coins. Kurke recognizes that some of Kraay’s evidence has since been disputed, however, her primary objection is that Kraay had not paid sufficient attention to culture, institutions, and other social and political motivations. In her view, "the minting of coin would represent the state’s assertion of its ultimate authority to constitute and regulate value in all the spheres in which general-purpose money operated simultaneously—economic, social, political, and religious. Thus, state-issued coinage as a universal equivalent, like the civic agora in which it circulated, symbolized the merger in a single token or site of many different domains of value, all under the final authority of the city." (pp. 12-13) In a sense, the choice of precious metals for coinage was a historical accident, a pointed challenge to elite monopoly over precious metal. By coining precious metal, the polis appropriated the highest sphere of gift exchange, and with its stamp it asserted its ultimate authority—both inwardly (or domestically) but also outwardly (in long-distance trade): "For every Greek polis that issued its own coin asserted its autonomy and independence from every other Greek city, while coinage also functions as one institution among many through which the city constituted itself as the final instance against the claims of an internal elite." (p. 13) As the polis used coins for its own payments and insisted on payment in coin, it inserted its sovereignty into retail trade in the agora. Mainstream economists frequently assert that growth of the local market was associated with expansion of democracy, but Kurke stands the typical Austrian argument on its head by noting the critical role played by the polis in wresting control away from the elite. By tying the invention of coinage to the special circumstances of Greece, Kurke’s analysis makes it clear why coins have been so unimportant to other economies before and since.

Of course, from the perspective of Greece, coinage was no historical accident. As Kurke argues, introduction of coins arose out of a "seventh/sixth century crisis of justice and unfair distribution of property". (p. 13) Coins appeared at this particular time because the polis had gained sufficient strength to rival the symposia, hetaireiai (private drinking clubs) and other institutions and xenia (elite networking) that maintained elite dominance. At the same time, the agora and its use of coined money subverted hierarchies of gift exchange, just as a shift to taxes and regular payments to city officials (as well as severe penalties levied on officials who accepted gifts) challenged the "natural" order that relied on gifts and favors. It is no coincidence that elite literary works disparaged the agora as a place for deceit, and coinage was always noted for its "counterfeit" quality. As Kurke argues, as coins are nothing more than tokens of the city’s authority, they could have been produced from any material. However, because the aristocrats measured a man’s worth by the quantity and quality of the precious metal he had accumulated, the polis was required to mint high quality coins, unvarying in fineness. (Note that gold is called the noble metal because it remains the same through time, like the king.) The citizens of the polis by their association with high quality, uniform, coin (and in the texts the citizen’s "mettle" was tested by the quality of the coin) gained equal status; by providing a standard measure of value, coinage rendered labor comparable and in this sense coinage was an egalitarian innovation. Obviously the elite reacted to such developments, although in a veiled manner. When money is discussed in the texts, its introduction is invariably attributed to tyrants who destroy the nomos, the community, the devine order. It is also interesting that the elite usually attributes invention of money to the requirements of scorned retail trade—just as modern economics does, albeit without scorn—rather than to the struggle to assert sovereignty of the polis. As Kurke argues, this "mystification" of the origins of money is ideological—as it remains today—a purposeful rejection of the legitimacy of democratic government.

A major portion of the book is devoted to elite representations of games and "bodies" (prostitution, objectification of women, and artistic depiction of the female form). Recall from the quote above that Herodotus linked Lydian creation of coinage to invention of games and prostitution of female children. Kurke notes that the whole array of Greek games emerged at the same time as coins, and wonders how games form a natural class with coins in literary texts—with games of chance ridiculed while games of order were held to be appropriate. She argues that games of chance served as a short-hand for all the vices of a disembedded economy: the acquisition of small profits by shameful means and creation of random fortunes as opposed to the "natural" fortune gained through aristocratic birth. However, she cautions

This is not to claim that a particular Greek individual or set of individuals consciously invented the game of polis, say, or kottabos, in order to reflect and reproduce the egalitarian order of the city or the hierarchical relations of the elite symposium; …Instead, I would suggest that by a kind of social alchemy impossible to reconstruct in retrospect, cultural formations produce the practical apparatus through which they perpetuate themselves. (p. 298) Just as two classes of games were created, two classes of prostitute were invented at the time of coinage. Of course, the "world’s oldest profession" pre-dates coinage, but it became necessary for the elite to distinguish their prostitutes from those used by the citizens. Thus, the hetaira (courtesans) who frequented the symposia to exchange their services for "gifts" were distinguished from the porne (whore) who serviced citizens for coins. Significantly, the pornai were associated with the agora and disparaged as "working girls". Even more interestingly, Kurke notes that the polis created cheap public brothels for use by citizens because "to be a citizen means always having a place to put your penis", and state-subsidized brothels ensured "that any citizen, no matter how poor, could enjoy a porne." (p. 196) This invention "serves ‘all mankind’, it is ‘democratic’, and provides women who are ‘common to all’". (p. 197) However, the civic innovation "achieves this effect of political democracy by completely disembedding the women from any social networks"—commodifying them. (p. 197) Further, the behaviors and bodies of the hetaira and porne are contrasted in literary and artistic works, with the hetaira of the symposia generally depicted as attractive, demure, neat, and dainty, while the pornai of the agora are represented as promiscuous gluttons, with grotesque bodies and subject to physical abuse at the hands of their clients. Kurke concludes: The opposition of hetaira and porne operates within a complex network of economic, social, and political differentiation of middling and elitist traditions, whereby the aristocratic symposium invents the hetaira to shield itself from the public sphere, which it figures and traduces through the obscenity of the porne. Egalitarian discourse, in contrast (at least by the fourth century) can embrace precisely what the aristocratic texts revile, celebrating the universal availability of pornai as an emblem and badge of democracy. (p. 219) Coinage was not a transactions-cost-minimizing invention but rather emerged from a spatially and temporally specific contest between an elite that wished to preserve the embedded hierarchy of gift exchange and a democratic polis moving to assert its sovereignty. Precious metals were not chosen for coinage to ensure that nominal value would be maintained by high embodied value, but rather because of the particular role played by precious metals in the hierarchy. Always above all a means of providing for state finance, coins were mystified by an elite that associated their creation with petty, debasing, and contaminating retail trade (most symbolically represented by the porne circulating in the agora). While both the elite and the supporters of the polis claimed legitimacy for their positions through reference to the natural, embedded, order, coinage, development of sovereign government, and evolution of retail trade all contributed to the gradual disembedding of the economy. It is ironic that today’s apologists view the completely disembedded economy as the natural case, emerging from rational, individualistic, pursuits, and even see the "pure" case as one in which only precious metals are used as media of exchange. The evil government only corrupts the natural, disembedded economy by debasing the currency and by substituting its own tokens. As Kurke’s analysis makes clear, through their ignorance of history these economists have wholly misinterpreted the nature of money and the importance of government to the formation of democratizing market exchange, and would instead promote a return to the embedded economy with elite, hierarchical gift exchange and with precious metal at the apex.

At least some readers of this review will recognize that Kurke’s arguments are largely consistent with the chartalist or state money approach of Frederic Knapp and Abba Lerner, or with the modern revival which has been dubbed neo-chartalist. (Wray 1999) Money is, and always has been, a "creature of the state" (in Lerner’s felicitous phrase), and currency has always been a state token. Precious metal coins merely represent one kind of state token, and their origins can be traced to the specific social upheaval that took place at the end of the 7th century B.C. This is an important, fascinating, book that should not be ignored by any monetary theorist.
 

References

Heilbroner, Robert L. (1999) The Worldly Philosophers: the lives, times, and ideas of great economic thinkers, Simon&Schuster: New York, seventh edition.

Innes, A. Mitchell (1913), "What is Money", Banking Law Journal, May, pp. 377-408.

Kraay, C.M. (1964) "Hoards, Small Change and the Origin of Coinage", Journal of Hellenic Studies, 84, pp. 76-91.

McIntosh, Marjorie K. (1988) "Money Lending on the Periphery of London, 1300-1600", Albion, 20(4), Winter, pp. 557-71.

Polanyi, K. (1968) Primitive, Archaic, and Modern Economies: Essays of Karl Polanyi, edited by G. Dalton, Garden City, NY.

Wray, L. Randall (1999) Understanding Modern Money: the key to full employment and price stability, Edward Elgar: Cheltenham.