History of Money, Banking, and Trade
A historical look at the development and evolution of money, banking, and trade. From the ancient civilizations to the present.
History of Money, Banking, and Trade
Episode 47. How Greek Coins Built Markets, Empires, And Ideas
Ships got faster, markets thickened, and stamped silver began doing political work that speeches couldn’t. We follow how Greek city-states turned metal into money and money into power—financing fleets, paying jurors and rowers, and turning owls and gods into portable propaganda. Seigniorage became public revenue, the Agora became a humming marketplace, and social mobility crept in as status shifted from lineage to ledger.
We dig into the messy mechanics: clashing weight standards, missing denominations, and the rise of "trapezites" who sat at simple tables and priced trust for a fee. Athens bankrolled prestige by paying Olympic and Isthmian champions, proving that sports funding is ancient soft power. Philosophers pushed back; Aristotle’s fear of endless accumulation echoes today’s debates over fiduciary duty, environmental costs, and the obligations of wealth. Persia minted the gold daric yet watched Greek silver dominate circulation through network effects, while city-states navigated debasement and emergency bronze issues by anchoring coins to taxes and fines.
One city refused the current: Sparta, with heavy iron money designed to choke off luxury and bribery. That austere system depended on helots and periokoi, revealing how military readiness and economic insulation fed each other. We also confront the human cost of liquidity—Laurion’s mines powered the money supply through enslaved labor in lethal conditions—alongside a broader view of credit and risk. Barter myths fall away as we map gift economies, ledgers, letters of credit, and the hard truth that when war rises, interest rates and metal hoards rise with it. If this journey through ancient finance and power made you rethink money’s true alloy—trust, law, and force—follow the show, share it with a friend, and leave a quick review to help others find us.
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Ships got faster, roads stretched farther, and fear did the rest. The Greeks rose up from the Greek ashes of the late Bronze Age collapse to a world where their stamped silver coins didn't just buy grains and oarsmen, it built fleets, financed wars, and rewired how people thought about law, status, and freedom. Lydia may have been the first to mint coins, but the Ionian Greeks made their coinage part of their culture, turning measured metal into everyday money that paid for juries, rowers, craftsmen, and mercenaries. As the Agora shifted from public debate to humming marketplaces, Athens funded its ambitions through Laurean silver, tribute from subject cities, fines, and services assigned to the wealthy, sidestepping direct taxes while scaling a maritime empire. Mercenaries accelerated the revolution. States needed reliable payrolls, and coins beat IOUs and in kind payments on campaign. Carthage, long tied to ingots, minted coins in Sicily to pay Greek soldiers, proving how war can force monetary innovation. Signorage powered city-states, mints captured the spread between the face value and metal costs, turning coinage into civic revenue. Designs mattered. Owls, gods, and later Alexander's portrait broadcast identity and legitimacy, turning currency into portable propaganda. Silver dominated daily life because it divided cleanly and traveled well. Gold stayed in hordes, dowries, and high diplomacy. Where coin circulation rose, money velocity jumped, markets thickened, and specialized labor took root. Beneath the metal ran ideas. The Axial Age brought written laws, standardized measures, and a new respect for reasoned order. Perfect companions to standardized money. Coins became currency as it was rooted in law, as they were framed as instruments of justice as much as exchange. Monetization loosened rigid hierarchies, birth seeded ground to balance sheets, and social mobility edged in without revolution. From owls to armies, from hordes to harbors, the Greek story shows how money's most durable alloy is trust, law, and the hard calculus of power. I am Mike D. This is the history of money, banking, and trade podcast. If this journey through ancient finance, warfare, and market sparked new questions, please follow and share the show. Unlike modern coins, ancient coins typically did not display their denomination value. People had to learn by experience, the weight standards, and the relative worth of gold, silver, and bronze, which varied from state to state. In Athens, for example, the Attic silver, the drachmas, which means to grasp or to seize, and also handful in Greek, weighed about 4.2 grams, while just 20 miles away on Eegina, the same denomination weighed 6.3 grams under their standard. This lack of standardization would create inefficiencies and therefore make transactions much more complicated. For example, a buyer of fish at a fish market could be forced to pay with heavy Eeginatan coins, but could receive his change in the lighter addict coins. And then on top of that, he could be charged an exchange fee by the vendor. As such, the vendor often double-dipped. Therefore, this exchange rate fee acted as an additional tax. Thus, this stifled economic activity. In modern times, it would be the equivalent of imposing tariffs on imported goods. It is nothing more than a tax on the transaction that the buyer pays. Over time, a class of professional money changers stepped in to manage this complex coin system with a fee attached. These money changers were early forms of bankers that operated from a simple table or a trapoza, which is still the word for bank in modern Greece. Like so many bankers throughout history, they quickly gained a reputation for greed and dishonesty, whether that was deserved or not. Coin money also provided states with opportunities for profit, a practice that started with the Lydians as the cities issued coins valued slightly higher than the metal contents, allowing them to recover minting costs as well as earning additional income, a practice that is known as signorage. Not only was coinage used in transactions and tributes, but it was also popular in sport. The Olympic Games, which originated in Olympia, Greece, were first recorded in 776 BCE and then held every four years. Initially, only free-born Greek men were allowed to participate, and they were as much a religious festival as an athletic event, with sacrifices and offerings made to Zeus. They were so vital to the culture that even when certain cities were warring with each other, a truce was enforced during the Games to allow for safe travels for the athletes and visitors. During the early 6th century BCE, Athens began to provide significant monetary awards to athletes who were victorious in the Panhellenic athletic competitions, which wasn't just the Olympics. This represents an important step in recognizing and supporting athletic achievements within the city-states. Athenian champions at the Olympic Games were rewarded 500 drachmas by the states. This was a considerable amount at the time. For example, a skilled laborer or craftsman, such as a carpenter or a mason, would typically earn around one drachma per day, whereas an unskilled laborer would earn less, as he would earn about a half a drachma or three obes for a day's work. So in other words, an Athenian Olympic champion would receive around 16 months of wages, and an unskilled laborer would earn nearly 33 months' worth of wages. Additionally, there were other competitions. Isthmian Games were a series of athletic and musical competitions held in ancient Greece in honor of the sea god Poseidon. The games took place every two years in the spring of the second and fourth years of each Olympiad at the Sanctuary of Poseidon on Isthmus of Corinth. Athenian victors at the Isthmian Games received 100 drachmas from the Athenian states. Consequently, these monetary prizes provided financial support to the athletes, making it possible for individuals from different social classes to pursue athletic careers. Athens wasn't unlike modern nation states that use athletics to enhance its reputation among other states. So just like modern states, they use money to reward successful athletes, thereby giving them means to continue training. This ultimately led to successful competitions, leading to not only the athlete gaining status, but more importantly, the state could have bragging rights over others. This still happens to this very day, as it did then, as it showcased the city's power and cultural achievements. In addition to money, victorious athletes could also receive other honors and privileges, such as free meals for life in the city hall, tax exemptions, special seating at public events, and even statues or poetry dedicated to their achievements. As such, their monetary rewards were significant and could afford an individual to live the life of luxury and celebrity. So when someone complains about people like LeBron James or Michael Jordan like my generation, just know this has been happening for well over 2,000 years. The spread of coins democratized society, as it made people feel freer and gave them more opportunities to leave the life they had been born into. Therefore, the traditional establishment wasn't necessarily the biggest fan of coinage. In fact, a lot of influential philosophers in Greece hated coinage, as they saw it as the destruction of the traditional way of life as people moved away from farm to the sea, despite the fact that traditional subsistence farming could not support their populations anyway. As it were, around 400 BCE in Greece, almost every social class had adopted coinage. Coinage was expanded even further than what was locally mined as kings and governments struck coins from bullion plundered from conquests, in addition to the tributes received from their vassal states. Furthermore, from a purely administrative perspective, taxing monetary transactions along with income proved far more efficient with coins than dealing with income perishable goods. This efficiency became a primary driver for governments favoring coinage over income payments. The treasury in modern society injects currency into circulation through lending facilities, but in ancient Greece, coins were injected into circulation by paying soldiers, funding public projects, and covering royal expenses, thereby injecting coins into the broader economy. In fact, the reason why the Persians adopted coinage was it provided a means to pay soldiers, but more importantly, the Persians frequently hired Greek mercenaries who expected to be paid in coin. Therefore, currency had little impact in Persia because it was a vast tribute empire ruled by a centralized military. The Persians never established new mints in their Iranian heartland. Instead, they relied on the Lydian mints as Sardis. Initially, they produced more crocids, which were coins in the style set by Cretus. They used these until Emperor Darius instructed the mint to issue gold coins bearing his own likeness, possibly marking the first time a coin produced a ruler's portrait. These gold derricks became a local standard. Yet, to Darius' frustration, most of the coins circulated across the Persian Empire were in fact silver units from Greece. A big reason was Greek coins were flowing in from well over a hundred different city-states. Consequently, it wasn't a single Greek mint under one ruler who had become internationally dominant. Rather, Greek coinage as a whole had become widely accepted across the region regardless of the source. Furthermore, the various treasuries gradually depended on its specialized coin-producing division, which was the mint, and the mint's job was to regulate the currencies introduced into the economy. Accordingly, at the height of the classical Greece period, with hundreds of city-states each producing their own currencies under different weights and denomination systems, merchants often carried scales and treated coins, especially foreign ones, simply as lumps of silver, much like Indian merchants later treated Roman coins. However, within each city-state, its own currency held a special status, as it was accepted at face value for taxes, public fees, and legal penalties. This is why ancient governments could often introduce base metals into their coinage without causing immediate inflation. A debased coin might lose its value abroad, but at home it retained its full value when paying for licenses or entry into the public theater, for example. During emergencies, Greek city-states would sometimes mint coins entirely from bronze or tin, and for the duration of the crisis, everyone agreed to treat these as if they were silver. The Han Chinese would primarily mint their coins in bronze or copper. This is why their coins generally didn't circulate outside of China as there was basically no demand. Richard Seaford argued that the invention of coinage fundamentally shaped Greek philosophy and tragedy by introducing a new, impersonal, and abstract form of value. The point central to Seaford's argument was a coin was in essence a piece of metal, but once shaped and stamped with words and images, it became something more through the collective agreement of the civic community. Yet this power had limits. Bronze coins could not circulate indefinitely, and if the state debased the coinage too far, inflation would eventually follow. So, even though the Greek world generally moved towards coinage, Sparta was the exception. Sparta was an ultra-conservative city-state and therefore was a notable exception in Greece's economic modernization. Sparta discouraged trade with other city-states because they feared that exposure to foreign money and goods would introduce new ideas and create a desire for luxury and threaten their military-focused society. Instead of gold and silver coins used by other Greek cities like Athens, Sparta used large, heavy iron bars as a form of currency. These were difficult to transport or hoard. As such, this discouraged trade and limited the ability to accumulate wealth. Additionally, these heavy iron bars would most likely prevent greed and corruption. A bribe that would require just a few silver coins in another city would require a wagon load of heavy iron in Sparta, making it nearly impossible to conceal. The Spartan society's main focus was on maintenance of a strong military. Spartan citizens were trained as professional soldiers and were prohibited from participating in trade or agriculture. Spartan society was unique in that the stratification allowed its citizens to train as full-time professional soldiers. This was achieved through a rigid class structure that outsourced all manual labor. To support the Spartan citizen soldiers, the economy relied on labor of the helots, a subjugated population who were essentially state-owned slaves. Therefore, unlike typical slaves in other Greek city-states, helots were owned by the Spartan state, not by individual citizens. The helot could not be bought or sold and was permanently bound to the land they worked as they performed agriculture and other unskilled labor, providing the necessary goods and services for the Spartan citizens. Free non-citizens called Pariiki handled skilled crafts and limited trade with outsiders. In essence, Sparta's unique economic structure enabled its citizens to focus exclusively on military training and maintain a high level of military preparedness, while relying on the labor of the helots, which were state-owned serfs, and pre-iki to meet their needs. While military service was central to Spartans' identity, the structure of the society was also an indirect response to their fear of the vast, subjugated helot population. It's not unlike the Western Hemisphere's fear of the chattel slaves of African descent. And just like the United States and other Western countries, much of the ancient Greek economy was built largely upon ancient slavery as well. Estimates vary, but slaves may have made up approximately 30 to 40% of the total population in ancient Greece, with some sources ranging from 20% to over 50%, depending on the region and the time period. Slavery in Greece wasn't the chattel slavery that we saw in the Americas, as slaves performed roles in domestic service, agriculture, crafts, and mining. Some slaves in ancient Greece could be trained to run businesses, especially in Athens. And this is not unlike what was happening in ancient Mesopotamia as well. They had a similar slave structure set up where slaves could be trained to run businesses and could actually garner a profit if a slave was exceptionally good at what he does as far as running businesses go. So, in other words, it wasn't uncommon for slave owners in Mesopotamia to buy a slave, invest a lot of money and time and resources into that slave in order to turn a profit. The Apaphora system allowed slaves to live and work independently from their master's house. They paid their master fixed rents and kept the rest of their profits from their business. While slaves could not own property outright, many were allowed to manage a private fund called a peculium. This enabled them to turn a profit, save money, and negotiate contracts. Therefore, slaves worked in a variety of trades, such as artisans, shopkeepers, and even bankers. Some scholars have compared their enterprise to modern and limited companies due to their relative independence. The opportunity to manage a business was a key incentive for slaves and a possible path to freedom. Therefore, by saving their earnings, some slaves were able to pay their masters for the freedom. A famous case is Pasion, a slave who worked for two Athenian bankers. He proved so valuable and trustworthy that he was granted freedom and eventually inherited the entire bank, becoming one of the wealthiest men in Athens in the process. This type of slavery was vastly different from those who performed hard manual labor, such as the notoriously deadly silver mines, where the prospects for freedom were slim to none. The fact is slaves working in the mines were probably more likely to die before earning their freedom. And if they somehow managed to get their freedom, it's highly unlikely that they didn't have a long life afterwards. Athens slavery was contrasted sharply with the landbound helot system in Sparta, where state-owned serfs cultivated land but did not have the same path forward to individual enterprise and freedom. Ultimately, slaves were acquired through a few different means. If someone was on the losing side of a war and was lucky enough to survive intact, but was captured, these prisoners of war could easily fall into slavery. This would apply to soldiers and civilians alike. In addition, pirates and thieves provided a decent supply of slaves. Lastly, slaves were also acquired through trade between various states and kingdoms. Ultimately, slavery and the new metallic money went hand in hand. Metals emerged as the natural choice for money in that it offered unique advantages versus other commodities. As such, the slave labor force ensured silver coins could flow throughout the local Greek and international economies. Silver being the most important form of money because silver is a precious metal. Using precious metal as a form of money makes sense for a number of reasons. Metals are fungible, meaning each unit is interchangeable. Therefore, it's extremely hard to tell the difference from one metal's origin from another. This means many metals have a somewhat consistent value. However, certain mines would produce more pure silver than others. Metals also offer durability. Unlike perishable goods, metals withstand time and use. They are portable as they offer high value to weight ratios, which made them ideal for trade, and also made them ideal for plunder. They are versatile, meaning they checked in most important boxes in that they served as a medium of exchange, store of wealth, and a unit of account. The use of silver makes an ideal money source for a few reasons. It was relatively scarce and a universally desired metal. The scarcity meant one wouldn't need an excessive amount of metal for ordinary transactions, like those in China that use bronze or copper coins. This perfect combination of properties made metals, especially silver, the foundation of monetary systems across ancient civilizations. Silver and gold are considered precious metals, so they are generally located in inaccessible and dangerous places. There were rare exceptions of gold or silver that was easily obtained near the Earth's surface, such as the Iberian Peninsula when the Phoenicians and later Carthaginians colonized it. A more recent example being California in the late 1840s. So the normal case for finding these valuable metals is to go digging well below the surface. In ancient societies, most people weren't going to go into the mines no matter the pay, because working the mines was extremely hazardous to the workers' health. Therefore, it basically meant that they would have their lives shortened considerably, assuming mines didn't collapse on them to begin with. So it was quite obvious that regular civilians were never going to go work in the mines. Therefore, the Greeks, like every other ancient society, utilized chain gangs of prisoners and slaves. That included men, women, and children alike. Ancient Greek thinkers, like the philosopher Aristotle, considered slaves a living tool with low maintenance costs relative to free workers. The vast majority of the mine workers were in fact slaves, with estimates placing the number at 10,000 to 20,000 during the Laurean mines' most productive period. The slave labor in the mines was typically defined. Men were primarily involved in the physically demanding and dangerous tasks underground, such as mining, digging, transporting ore, smelting it. Women and children worked on the surface, primarily in ore extraction, selection, and washing. In some cases they used small children that were small enough to fit in the narrow shafts. They would have worked the mines day and night. Old men would grind the stone to powder, which would be washed to separate the tiniest flecks of gold. Slaves working in the Lorian mines had a very low life expectancy, estimated to be only around three to five years. This indicates the severity of the hazardous conditions. In other words, they would have worked them to death. The mining process, particularly the crushing and processing of lead and silver ore, created a hazardous environment. Workers faced dangers from inhaling toxic lead vapor along with the lung choking dust within the mine galleries. Additionally, the cramped underground tunnels had poor ventilation, leading to the accumulation of poisonous gases, further intensifying their respiratory dangers. The unstable underground environment resulted in frequent accidents, including mine collapses that claimed countless lives. The confined workspaces and difficult manual labor also led to frequent physical injuries. Historical accounts describe the working conditions as harsh and inhumane. Enslaved miners were often leg ironed, routinely starved, savagely beaten, and rarely saw daylight. In Athens, the great beneficiaries of the silver mining industry were the slavers, who supplied the slaves that were leased to extract and work the ore. The large amount of silver extracted increased the money supply in and around Greece. Despite this, it wasn't necessarily accepted by all. As such, the Greeks may have been one of the first cultures to put forth their fears when it came to money. In fact, many, if not most of their fears, are still with us today. These anxieties centered around the possibility that the limitless pursuit of wealth could dislodge ethics, the natural social order, and loyalty to family. Influential philosophers like Aristotle feared that the limitless pursuit of wealth could corrupt the natural household economy. They believed the natural order was based on the needs of the family, and the pursuit of endless riches was seen as unnatural and a dangerous corruption of this order. This new idea of financial freedom led to fears that citizens would become obsessed with their private economic affairs at the expense of their community responsibilities. These fears are still just as valid. While CEOs of publicly traded companies are required to act as fiduciaries, at what point should they put aside that responsibility in favor of the greater good? Such as standing up to a wannabe dictator trying to act like a king instead of flattering him with unprecedented gifts, or companies polluting the environment for short-term gains at the expense of local and international communities. The Greeks were coming to grips with this, just as we are continuing to deal with these concerns to this day. In fact, the Greek word for private citizens solely concerned with personal matters was idiotis, the root word for idiot. Most students, whether they are high school students or university students, were and are still taught that prior to coinage, transactions would have been done through a form of barter. A hypothetical peer barter system was popularized by traditional economists like Adam Smith, and even today, it remains a common thought experiment in economic textbooks. However, anthropologists have found no evidence of a society that primarily used barter. Barter may happen even to this day on a micro level, and it's quite possible that people of various Greek city-states had utilized some sort of barter on a micro level as well, but there just isn't any records of widespread use. Prior to formalized writing systems, trade was often based on a network of favors and obligations or gift exchanges. These were essentially a form of mutual credit based on community trust and reciprocity. Furthermore, as writing systems were developed, credit arrangements were typically drawn up with some sort of repayment date that was established. The repayments, prior to coinage, could have been in specific weights of silver or possibly wheat or some other commodity. In China, for example, repayment was often made in fine silks. Additionally, cuneiform was first developed in Sumer around 3500 to 3200 BCE, primarily for accounting purposes to track goods and transactions. Initially, it served as a ledger system for administrative and economic records, laying the foundation for all subsequent uses of the written word. In other words, the development of cuneiform writing systems allowed transactions to occur on credit with the payable due on an agreed-upon date in whatever the contract stipulated. This was enhanced even further when the Phoenicians developed their alphabet around 1200 BCE that served as a prototype for many modern writing systems, including Greek, Latin, Arabic, and Hebrew. Plutarch noted that in Crete, it was custom for those taking loans to pretend to snatch the money from the lender's purse. While Plutarch noted the unusual custom of borrowers appearing to snatch money from lenders, he did not provide a definitive reason for this practice, but people have speculated why ever since. Some have suggested that by staging the transaction as a violent act, the lender could sidestep the legal intricacies. Of a loan contract in the event of a default. If a borrower failed to repay, the lender could charge him with assault or robbery rather than a simple breach of contract, which could lead to a more severe punishment. Default is an obvious risk to any credit arrangement. However, the use of gold or silver coins differs from a credit arrangement in one major way. They represent a real risk that the coins could be stolen or lost. A debt, by its nature, is a record and a relationship built on trust. By contrast, someone accepting gold or silver in exchange for goods needs only to trust the scales, the quality of metal, and the likelihood that others will accept it in return. This is precisely why long distance trade often evolved to use some form of letter of credit that could be exchanged at a branch in the local city where the money would be needed. Because a letter of credit meant that you weren't at risk of being robbed by thieves. A thief could take the note or a letter of credit, but it would have been useless because the letters often had some sort of reconciliation process attached to them, of which the thief wouldn't know. And that assumes that the thief was literate in the language used in the agreement in the first place. In a world where war and the threat of violence were a constant, whether in the warring states of China, Iron Age Greece, or the Primarian India, there were clear advantages to keeping transactions simple. This is especially true when dealing with soldiers. Soldiers often acquired large amounts of plunder, much of it in silver and gold, and would seek ways to exchange it for goods and services. Yet these heavily armed wandering soldiers are the definition of poor credit risk because they have no or limited history of credit arrangements, may not be from the local area, so they have no incentive to pay back any debts, and they are high risk of dying on the battlefield or taken as a prisoner of war. So the likelihood of repayment is quite low. Despite soldiers needing silver or sometimes gold as payment for defensive purposes, credit systems tend to thrive and even dominate in periods of peace or across networks of trust. These can be communities of the same faith or institutions like merchant guilds. In contrast, in periods characterized by widespread instability or war and plunder, credit risk is so high that lending is usually replaced by spot payments and precious metal. This isn't just an ancient phenomenon. Even in modern capital markets, interest rates tend to soar during periods of war and instability, and people generally tend to look to hoard gold and credit freezes up when modern economies are rocked by economic shocks. Coins eventually become the foundation of the Greek financial system, and Greek banking developed mainly to support coin circulation rather than replace earlier pre-coin roles. This was different from ancient Sumer and Ptolemaic Egypt, where banking stood at the center of wholesale trade and economic exchange.com slash history of money banking trade or visit our website at money bankingtrade.com. Thank you very much. Talk to you soon.
