2002 Reports

The birth of coinage

Mundell, Robert A.

The introduction of coinage marks an important innovation in the history of money and a transition in the development of civilization itself. Sometime in the first millennium BC, coinage was invented, probably in Asia Minor, and it rapidly spread throughout the Mediterranean area. Tradition attributes the invention to Lydia but it quickly became a Greek affair. Wherever Greeks settled coinage followed. In the span of hardly a century the innovation had become established around the Aegean area, Sicily, southern Italy, southern France, Spain, Libya and the Black Sea. It was also taken up by neighboring peoples, including the Persians, the Etruscans and the Carthaginians. Coinage is a subject of interest for many disciplines: history, archaeology, metrology, numismatics, epigraphy, linguistics, classics, metallurgy, history of art, political science and of course economics. Its literature is enormous. Nevertheless, some of the most relevant questions remain unanswered. Why did coins suddenly appear in Asia Minor and the Aegean area in the early seventh century? What is the evidence that coinage was invented in Lydia? What were the early coins used for? Did the device or mark on the early coins guarantee the weight, the purity or the value? What was the purchasing power of the early denominations? Did the coins exchange at their "intrinsic worth" or were they overvalued? How were the coins related to prevailing weight systems? This essay attempts to answer some of these questions and provide an introduction to our knowledge about the invention of coinage.