W&L Students Learn the Real Value of Money


Colin Elliott

Colin Elliott

We live in a society where using money is like breathing. It makes our lives easier, but we don't really understand why, according to Colin Elliott, Mellon Postdoctoral Fellow in classics and ancient history at Washington and Lee University.

Elliott teaches the spring term course "Money is Power: Control, Destruction and Revolution in the First 100 Years of Coinage," which explores how coinage and the historical events it caused acted upon individuals, rulers, states and societies. "I want students to have an appreciation for how the revolutionary concept of money left nothing unchanged," he said.

Elliott described how coinage began in the 7th or 6th century B.C., although the principle of a medium of exchange started well before that with cattle, precious metals, sea shells, even rocks, depending on where people lived.

In western Turkey people traded balls of metal made from electrum, a naturally-occurring mix of gold and silver, but the problem was that electrum varied as to how much gold and silver was in it. So a man called Phanes decided to put his seal of approval on the metal balls in the form of a deer stamp so that people would know that he was guaranteeing its value. Once money could be simply counted instead of weighed, the possibilities for exchange grew exponentially.

The concept spread like wildfire. The rest of the Greek world adopted it, the Persians adopted it and eventually the Romans adopted it. It spread throughout the Mediterranean world and almost every culture that encountered coinage incorporated it into their own practices of exchange.

Prior to money, people had to engage with people they knew and trusted, but suddenly money that was a set standard and had a set mark that was guaranteed by someone allowed strangers to interact, opening up cultural interaction and long-distance trade.

Elliott is bringing Exeter University's Richard Seaford to speak to his class; a scholar who has shown that the introduction of money also changed thinking and brought about philosophy and tragedy.

"The ancient world tells us that every time money evolves and changes the way it is used it is a revolutionary process," said Elliott. "I study the third century of Rome when the first real attempt was made to divorce money from a tangible thing—gold and silver. When the Roman government attempted to pass off coins with virtually no precious metal content it was an unmitigated disaster and is arguably an important reason why the Roman Empire collapsed. Now, of course, we have fiat—money without a tangible thing—and it works reasonably fine."

Elliott said that the emergence of bitcoins is just such a revolutionary moment and that the ancient perspective tells us that the concept of virtual money will probably endure.

"Bitcoins are really interesting because in our progression of money we've gone from money based on something tangible to money based on trust and the state—we trade our U.S. dollars because we believe the government will accept them and guarantee their value. Bitcoins have removed even that aspect because there's no state associated with it and no central bank controls it. There isn't even a person associated with it because the inventor is anonymous.

"It basically keeps all of the properties of money but sheds itself of all the steps that money has taken up until the inception of bitcoins. I suspect we will all be using virtual money at some point, maybe in the not too distant future – but there may be quite a few obstacles to overcome before we arrive at that point."

Elliott received his B.A. in history from the University of Oregon and his Ph.D., in ancient history from the University of Bristol.

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