Debt (41 page)

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 possible 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

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:

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:

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.

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 kingdoms 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.

In both India and China, we can observe the same pattern: invented by private citizens, coinage was quickly monopolized by the state. The first Indian money, which seems to have appeared at some point in the sixth century, consisted of bars of silver trimmed down to uniform weights, then punch-marked with some kind of official symbol.
⁶
Most of the examples discovered by archaeologists contain numerous additional counter-punches, presumably added much in the way that a check or other credit instrument is endorsed before being transferred. This strongly suggests that they were being handled by people used to dealing with more abstract credit instruments.
⁷
Much early Chinese coinage also shows signs of having evolved directly from social currencies: some were in fact cast bronze in the shape of cowries, though others took the shape of diminutive knives, disks, or spades. In every case, local governments quickly stepped in—presumably within the space of about a generation.
⁸
However, since in each of the three areas there was a plethora of tiny states, this meant that each ended up with a wide variety of different currency systems. For example, around 700 bc, northern India was still divided into Janapadas or “tribal territories,” some of them monarchies and some republics, and in the sixth century there were still at least sixteen major kingdoms. In China, this was the period where the old Zhou Empire first devolved into vying principalities (the “Spring and Autumn” period, 722–481 bc), then splintered into the chaos of the “Warring States” (475–221 bc.) Like the Greek city-states, all of the resulting kingdoms, no matter how diminutive, aspired to issue their own official currency.

Recent scholarship has shed a great deal of light on how this must have happened. Gold, silver, and bronze—the materials from which coins were made—had long been the media of international trade; but until that time, only the rich had actually had much in their possession. A typical Sumerian farmer may well have never had occasion to hold a substantial piece of silver in his hand, except perhaps at his wedding. Most precious metals took the form of wealthy women’s anklets and heirloom chalices presented by kings to their retainers, or it was simply stockpiled in temples, in ingot form, as sureties for loans. Somehow, during the Axial Age, all this began to change. Large amounts of silver, gold, and copper were dethesaurized, as the economic historians like
to say; it was removed from the temples and houses of the rich and placed in the hands of ordinary people, was broken into tinier pieces, and began to be used in everyday transactions.

How? Israeli Classicist David Schaps provides the most plausible suggestion: most of it was stolen. This was a period of generalized warfare, and it is in the nature of war that precious things are plundered.