Chapter Title: Money: Its Character and Origins

Book Title: Money, Markets, and Trade in Early Southeast Asia

Book Subtitle: The Development of Indigenous Monetary Systems to AD 1400
Book Author(s): Robert S. Wicks
Published by: Cornell University Press; Southeast Asia Program Publications at Cornell
University

Stable URL: https://www.jstor.org/stable/10.7591/j.ctv1nhjzp.6

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 1
MONEY: ITS CHARACTER AND ORIGINS

B
etween the third century BC and the early fifteenth century a large number of
Southeast Asian polities became money-using. While it is possible to dis-
cern a general trend toward monetization during these centuries, money
use varied considerably throughout the region. Money was not always com-
mercial in orientation nor did it necessarily involve the use of readily identifiable
money objects. In some societies money took the form of rice, cowrie shells, or other
commodities which also served as measures of value for fiscal or religious payments.
In others, indicative perhaps of a greater frequency of monetized transactions, the
adoption of money involved the use of coinage or paper currency to facilitate market-
ized exchange.1
The disparate nature of money use in early Southeast Asia means we must adopt
a definition of money capable of encompassing all possible constructions of the
monetary experience. One such definition considers money to be a "convention
established in relation to payments which dictates that particular objects with agreed
measures of value are recognized as the regular means of discharging the obligation
to pay."2 The convention of money, established through legal imposition or as the
formalization of commonly accepted practice, provides a shared vocabulary of money
terms and understanding of those terms among the community in which they oper-
ate. The convention also defines a class of physical objects which can serve as
money, as well as the contexts in which they are to function. Money, according to this
definition, has three main components: a physical money object (or record of that
object); an explicit measure of value, which may or may not be identical with the
money object; and a time-related element, regular use. In other words, the object-
value combination forms a routine, and indeed integral, part of monetized transac-
tions with the potential for endless replication.
Before proceeding to analyze the chief components of money, it is necessary to
stress that the burden of "moneyness" is carried by the form or shape of a transaction
and not by the physical stuff utilized to facilitate it. It is not what\s used in a transaction
which makes it monetized, but ftotvthe various elements of a transaction are com-
bined. For example, rice or cattle are not usually thought of as physical monies, yet
they can become "money" when they serve as such in a transaction. And coins, one
of the most readily identifiable money objects, often cease to be used as "money"
when they are found outside their intended area of circulation. Because the form of a
1
I am grateful to Victor Lieberman for his comments on this point.
2
I would like thank Joe Cribb of the Department of Coins and Medals at the British Museum for
suggesting this definition.

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 Money 7

transaction best reveals the conventions of money use within a society, it constitutes
the primary unit of analysis in the present study.
Another key point is that the form of a transaction must be viewed, not in isolation,
but as a consequence of the monetary conventions adopted by the society and the
context in which the transaction operates. The major transactional forms include direct
exchange, indirect exchange, and linked transfers. Each of these becomes mone-
tized in a different way, due chiefly to the disparate contexts in which each is carried
out, i.e. how the transaction fulfills some social, fiscal-administrative, commercial, or
religious obligation. The context of a transaction includes its articulation with transac-
tions which preceded it and those which will follow as a consequence of it, as in the
interconnectedness of the links of a chain.
Monetization must also be seen as a process: to what degree are payments con-
ventionalized and regularized; what is their impact on the society in which they
operate; and how do these conventions change over time? Although the main pur-
pose of a monetary system is to facilitate the exchange of goods and services and the
discharge of fiscal and other obligations, the presence of money does more than
simply reduce transaction costs. With the advent of money, economic relationships
become abstracted and less personal, motivated by values independent of such fac-
tors as kinship ties, the status of individuals involved in the transactions, and personal
obligation.3 With the advent of money also cash payments tend to replace seasonal
labor obligations, further weakening traditional means of maintaining power and influ-
ence. While it could be argued that these tendencies are the cause rather than the
result of the adoption of money, they nonetheless signal that critical changes are
taking place within the society.
One of money's distinguishing features is that it provides an explicit statement of
value. Value does not exist in and of itself but is inherently comparative. In most
monetary systems, a physical quantity of some object becomes the measure whereby
transactions are valued. Value may also be expressed as a factor of labor in the sense
of a replacement cost. Limiting ourselves for the time being to exchange transactions,
if the object to be sold were a blanket, its value might be calculated from the number
of days expended to weave it. If the object under consideration were land, its value
might be determined on the basis of productivity, such as how many bushels of rice
might be expected during a normal growing season. These intrinsic measures of
value are directly related to the object being exchanged. If the value of a bull is calcu-
lated as worth so many strings of cowrie shells or so many ounces of silver, the
measure of value would be extrinsic to the object being exchanged. Once the exter-
nalization of the measure of value has taken place, it becomes possible to value and
compare dissimilar objects much more easily, the measure of value then having the
potential of becoming generalized as a standard of value. (A distinction should be
maintained between a measure of value [which might have only one application] and a
standard of value, which implies applicability over a wider range of transactional
contexts.)
In early Southeast Asia, precious metals, such as silver or gold, frequently
became measures of value. In some instances, rice, lengths of cloth, or imported
cowrie shells performed the same function. Where there is only a money of account
(sometimes called a unit of account), the measure exists because the valuational
3
Recent essays on the societal impact of money can be found in J. Parry and N. Bloch, eds.,
Money and the Morality of Exchange (Cambridge: Cambridge University Press, 1989).

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8 Money, Markets, and Trade

standard served (or has the potential of serving) as a means of payment. In ancient
Egypt, for example, a standard weight of copper, the deben, served as a unit of
account for transactions which were conducted without the use of a physical money.
In other contexts, copper would have been accepted as payment.
Some concept of value is present in virtually every transaction. It is appropriate to
begin the discussion of how value is expressed in economic transactions by examin-
ing the major components of direct exchange, that is, exchange without the benefit
of a physical money stuff. Exchange is usually defined as a balanced transaction in
which the goods given and the goods received are deemed to be of roughly equal
value.4 The idea of balance in exchange transactions may be fictive, because a trans-
action generally occurs, not when the exchange is balanced or equal, but when there
is a perception of value inequality. In other words, the person purchasing a good or
service must desire (value) that good or service more than he values that which is
given up in exchange.5
To provide a theoretical example, in which the exchange is completely voluntary,

Xis the good being purchased

Vis the good being given up in exchange for X
care the costs (obligations) associated with the possession of Xor Y
b are the benefits associated with the possession of Xor Y
res is any residue of obligations or benefits still remaining after the transaction is
completed.

In order for someone to be willing to purchase a quantity of Xwith a quantity of Yt the

following conditions must be met—the perceived value of X, Xb-c, must be greater
than the perceived value of Y, Yres + Yb-c. Otherwise there would be no reason for
the transaction to take place. And in order for the possessor of Xto be willing to part
with Xin exchange for Y, the perceived value of Y, Yb-c, must be greater than the
perceived value of X, Xres + Xb-c.
This model points up another important aspect of transactions in traditional socie-
ties, namely that there are often obligations which remain even after the transaction is
completed (res). Unfortunately, it is often difficult to identify the precise nature of
these "bundles of rights and obligations" and how they are valued by the individuals
involved.6 In many of the examples of exchange documented in this study there are
discernable social forces behind the transaction. Their existence is revealed in the
fact that price is not merely a certain number of units of an accepted measure of
value/medium of exchange, but that obligations in addition to the "exchange price"
must be fulfilled before the transaction is considered complete.
4
See Frederick L. Pryor, The Origins of the Economy, A Comparative Study of Distribution in
Primitive and Peasant Economies (New York: Academic Press, 1977); Kwang-chih Chang,
"Ancient Trade as Economics or as Ecology," in Ancient Civilization and Trade, ed. Jeremy
Sabloff and C. C. Lamberg-Karlovsky (Albuquerque: University of New Mexico Press, 1975), p.
215.
5
I do not attempt to distinguish between need as desire versus need as requisite. Likewise, I
recognize that the concept of value is culture-based and do not attempt at this point to distin-
guish between value that is intrinsic to the object or service being transacted and value as an
artifact of the market. I wish to thank Gordon Thomasson for his comments on these points.
6
Pryor, Origins of the Economy, p. 107.

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 Money 9

Reciprocal exchange and most barter transactions are examples of direct ex-
change in which one good is exchanged for another without the benefit of a formal or
explicit measure of value. The valuational component is not directly visible in these
transactions as there is no expressed price. In reciprocal exchange the precise quan-
tity of objects tendered is largely determined by social convention or custom; benefits
accruing from such transactions are generally outside the strictly economic realm. In
barter, the rate of exchange is expressed as an exchange ratio, a crude monetary
instrument which, in a sense, is equivalent to price—so many units of one commodity
(or service) are held to be equivalent to so many units of another commodity (or ser-
vice). Except in instances where it is fixed by custom or decree, the exchange ratio
must be recreated with each transaction and does not have a life beyond the imme-
diate agreement.
With the adoption of an explicit measure of value, we have moved beyond pure
barter and into the realm of monetized transactions. As there is still no medium of
exchange, payment is made by disparate goods which may be described as money
substitutes.7 A good example of the use of money substitutes is found in a contract
from ancient Egypt in which a bull was bartered for an array of goods including grain,
oil, honey, cloth, and wood. Both parties agreed that the bull and the goods were
worth 119 deben weight of copper.8 Because there was no physical money which
changed hands, the deben here served as a money of account.
Economists point out that barter trade (direct exchange) often proved incon-
venient because of the difficulty of fulfilling a condition known as the "double coinci-
dence of wants," where two individuals have precisely the goods wanted by the
other.9 The introduction of a medium of exchange enables individuals to sell their
disparate goods for a mutually agreed upon money stuff which can then be readily
exchanged once again for desired purchases, thus giving rise to the term Indirect
exchange."10 White points out several important characteristics of a medium of
exchange.

In addition to being a vehicle or instrument of exchange, (the medium of

exchange) is also a measure of value. When a person takes his commodity to
market and sells it, i.e., receives for it a medium of exchange, this medium must
indicate the magnitude of value of the commodity sold, and, in turn, the magni-
tude of value the medium of exchange will again be equated with when an article
is purchased with it. Thus a medium of exchange measures the value both of
articles sold and of articles purchased. These measurements are expressed
numerically, as so many units of something, such as cattle or cowrie shells, or as
so many measures, e.g. ounces of some material such as gold.11
7
Philip Grierson, The Origins of Money (London: University of London, The Athlone Press,
1977), p. 17.
8
Joseph Cribb, éd., Money, From Cowrie Shells to Credit Cards (London: British Museum Pub-
lications, 1986), p.26, fig. 39.
9
See Paul Einzig, Primitive Money, In /te Ethnobgical, Historical and Economic Aspects, 2nd
éd., rev. and enl. (Oxford: Pergamon Press, 1966).
10
George Dalton, éd., Primitive, Archaic and Modem Economies, Essays of Karl Polanyi
(Boston: Beacon Press, 1971), p. 192.
11
Leslie A. White, The Evolution of Culture, The Development of Civilization to the Fall of Rome
(New York: McGraw-Hill, 1959), p. 339. Emended.

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10 Money, Markets, and Trade

Some objects would have served as media of exchange better than others and
presumably would have been preferred over less suitable rivals. In order for an object
to become an effective medium of exchange it must possess certain qualities.
According to White, a medium of exchange must first possess value, which "accrues
from the expenditure of labor." It should also possess the characteristic of divisibility—
"a medium of exchange must be readily divisible, or exist in the form of small units;
otherwise variations in magnitude of value cannot be easily expressed." A medium of
exchange must be portable as well as durable. And, finally, it must possess value in
concentrated form.12 The difficulties inherent in finding a single medium of exchange
suitable for virtually all economic transactions, large and small, would explain the pres-
ence in many societies of exchange spheres, in which certain goods (such as gold
and silver) serve as measures of value and media of exchange for large transactions
(the purchase of land, for example), while less valuable goods (cowries for instance)
perform identical functions for smaller transactions in the local marketplace.13
Without a doubt the means whereby a monetary system is introduced has an
impact on its form and longevity. Up to this point it has been assumed that
monetization is a consequence of the internal dynamics of an economy: a gradual,
evolutionary process of experimentation and adaptation. But monetary imposition
also exists and can be used as a means of promoting change, a classic example being
the introduction of Islamic monetary and administrative standards in Bengal during the
twelfth and thirteenth centuries, discussed in Chapter Three.
Having looked, however briefly, at the monetization of direct and indirect ex-
change, we must now examine the relationship between money and markets. Mar-
kets are frequently defined as places where money prices are determined by the
forces of supply and demand. The difficulty with this linkage is that it becomes
exceedingly difficult to consider the adoption of money within a society without
assuming it is in some way associated with market exchange. As Frederick L. Pryor
has pointed out, they can be independent of one another. "It is quite possible to
have market exchange without money (e.g., in barter transactions) and to have
money without market exchange (where money serves a number of noncommercial
purposes...)"14 It is necessary, then, first to define market transactions without refer-
ence to money. Three aspects are crucial. A primary feature of market exchange is
negotiation.^ In markets, exchange values are determined by supply and demand.
Thus, a free market situation becomes diminished when the negotiated aspect has
either been eliminated (when exchange rates are determined by decree) or mini-
mized (when negotiations must take place within certain boundaries); both are exam-
ples of administered markets.^ The second distinguishing feature of markets is
voluntariness, meaning that "transactions can be accepted or rejected without wide-
scale social repercussions."17 A third feature of market exchange, related to the first,
is profit making; market activity is engaged in because it is seen as an opportunity to
12
Ibid., p. 340.
13
Pryor, Origins of the Economy, pp. 386-406. Pryor also uses exchange matrices to deter-
mine the presence of exchange spheres and exchange circuits.
14
Ibid., p. 104.
15
See, for example, Karl Polanyi, "Traders and Trade," in Ancient Civilization and Trade, ed.
Sabloff and Lamberg-Karlovsky, pp. 152-53.
16
See, for example, Dalton, Primitive Economies, p. 164.
17
Pryor, Origins of the Economy, p. 105.

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 Money 11

accumulate surplus.18 When these three features—profit making, negotiated

exchanges, and voluntariness—are present, economic transactions are marketized.
If it is true that markets can exist without money (and vice versa), how does money
come to play a role in market exchange? At least two means can be suggested. Either
a money previously used in non-market situations comes to be used in the market-
place, or a new form of money is created specifically for the market.19 The importance
of this observation is that it leads us away from the entrenched dogma that money
arose out of the needs of marketized exchange, and makes it possible for us to con-
sider that there could well have been other processes whereby money was intro-
duced into the marketplace.
Further, what impact does money have on market economies? One widely held
view stresses money's impact on profit making, maintaining that money in a market
economy provides greater "opportunities for making, preserving and enjoying profit
derived from increased productive activities. Beyond doubt, profit can be made also
on direct exchanges of goods and services without the intermediary of money, but
the scope for earning profit can be widened considerably by the adoption of a mone-
tary system."20 The broadening of profit-making opportunities becomes possible
because money in marketized economies has special characteristics, namely that
money prices are attached to all goods and services, and these prices are expressed
in terms of the same money, greatly simplifying the computation of relative values.21
According to a number of authorities the use of a single money as a medium of
exchange, means of payment, and general standard of value only occurs with the rise
of a marketized economy.22 Taking this position to its logical conclusion, one could
argue that "full monetization" (where all goods and services are provided with money
prices) implies "full marketization" (where all prices are determined through the action
of market forces). With the adoption of a generalized money, one would also expect
the accentuated development of credit instruments. Further, the transition from
undifferentiated money goods (such as rice or cloth) to money objects (such as coins
or paper currency) can be viewed as a consequence of increased frequency of
monetized exchange, often related to the increased marketization of the economy.23
18
Some of the best examples of profit making appear in China. The pre-Qin (221-206 BC) text
Guan Zi notes, "It is human nature not to refrain from going after profit or warding off danger
when either is in sight. Where profit is anticipated, traders will hurry around day and night, and
make light of travelling over a thousand //to get it...So where there is profit, no mountain can
remain unclimbed, and no water is immune from penetration even if it is unfathomable..." Hu
Jichuang, Chinese Economic Thought Before the Seventeenth Century (Beijing: Foreign Lan-
guages Press, 1984), pp. 39-40. A similar passage, dating to 1088, can be found in Shiba
Yoshinobu, Commerce and Society in Sung China (Ann Arbor: Michigan Abstracts of Chinese
and Japanese Works on Chinese History No. 2, Center for Chinese Studies, The University of
Michigan, 1970), p. 48.
19
I would like to thank Joe Cribb for his suggestions on this point.
20
Einzig, Primitive Money, p. 489.
21
George Dalton, "Karl Polanyi's Analysis of Long-Distance Trade and His Wider Paradigm," in
Ancient Civilization and Trade, ed. Sabloff and Lamberg-Karlovsky, p. 87.
22
See, for example, Grierson, Origins of Money, pp. 10, 19; and Dalton, "Polanyi's Analysis,"
p. 88.
23
A recent study exploring the relationship between monetization and marketization in pre-
colonial Southeast Asia is Victor Lieberman, "Secular Trends in Burmese Economic History, c.
1350-1830, and their Implications for State Formation," Modem Asian Studies 25, 1 (1991): 1-
31.

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12 Money, Markets, and Trade

A question for this study is whether or not there are fully marketized/monetized
economies in early Southeast Asia which might confirm (or disallow) the full marketiza-
tion = full monetization equation.
Marketized exchange within a society can operate within the framework of a single
valuational standard. External market trade, on the other hand, involves the coming
together of two (or more) mutually exclusive valuational systems. The valuational dis-
junctions between the local and external economic systems are often resolved by
conducting a barter trade, one well-known variant being silent barter:

group (A) leaves goods for the other group (B) and disappears. Group B comes,
gathers up the goods, and leaves goods of its own in exchange. Group A returns
and, if satisfied with what is left, takes it. If not satisfied, Group A departs without
taking the goods left and Group B comes back and adds to the pile.24

In silent barter there is no explicit measure of value, each trading partner determining,
within their own valuational system, the relative quantities of goods to be offered.
External trade (still without a medium of exchange) can also be conducted utilizing an
explicit valuational standard, an example of which is presented below.
Sometime between 1413 and 1426 an Icelandic chieftain regulated traffic
between his people and the English by relating the value of goods in the marketplace
to stockfish. Payment was not made in stockfish but was carried on by barter.25
Examples of equivalencies included

Goods in the Marketplace Stockfish

48 alen [ells] of good and full-width trade cloth 120
3 tender [tons] of wheat 120
4 fonder of beer 120
1 tonde of clean and clear butter 120
1 tonde of wine 100
1/8 tonde of honey 15
1 pair of black (leather) shoes 4
1/8 tonde of salt 5

Stockfish thus served as a measure of value/unit of account against which the value
of other commodities were regulated. It is likely, although unconfirmed in this
instance, that payment could have been made in stockfish if adequate suppies of the
other goods were unavailable.
The presence of local and long-distance trade presupposes surplus production
and can subsequently stimulate further increases in output. This surplus can be
achieved through effective control over productive resources, such as manpower
and land, through individual initiative on the part of farmers, merchants, and traders as
well as the result of technological change, such as improved irrigation. With the addi-
tion of money, payment for services rendered and accounting for accumulated sur-
plus become more efficient procedures, as does storing and moving the surplus from
one place to another.
24
Walter C. Neale, Monies in Societies (San Francisco: Chandler & Sharp, 1976), p. 30.
25
Einzig, Primitive Money, p. 262.

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 Money 13

The use of physical monies and monetary concepts, however, do not always
serve the needs of long-distance trade. This is primarily because trade involves an
interest in specific commodities, not just values, and thus does not require an elabo-
rate monetary system to be effective or to attain a large scale. This is, in fact, the
general pattern found throughout early Southeast Asia. Although internal trade was
often monetized, long-distance trade was usually conducted on a barter basis, occa-
sionally with the addition of a notional accounting standard to simplify the computation
of equivalent values. In the regulation of trade, rulers often found it to their distinct
advantage to exercise strict control overweights and measures used within the ports
and marketplaces of their jurisdiction. Some went so far as to determine the exchange
values for commodities over which they had particular interest or monopoly. In
economies which already possessed coinage, foreign merchants were often required
to exchange their currency for the local money at predetermined (and usually discrim-
inatory) rates.
Although the emphasis of the discussion up to this point has been on exchange,
the most common form of transaction documented in indigenous Southeast Asian
literary and epigraphic sources is that which contributed to status differentiation, the
linked transfer.26 In northern Vietnam during the Han period, for instance, as the
Chinese were establishing control over the Red River Delta, local lords paid tribute to
China in return for recognition of their traditional rights. At the same time, the payment
of tribute acknowledged China's role as supreme lord and was thereby status-
enhancing for the Chinese emperor. In another setting, and nearly a millenium later,
Javanese overlords of the tenth century distributed valuables in order to elevate their
own status as well as affirm the relatively lower status of the recipients. Another means
commonly utilized to acquire status (both in this world and in the next) was to dedicate
valuable posessions, such as land, gold, or silver, to the religion. In seventh-century
DvâravatT, dedicatory offerings buried beneath the foundation stones of a temple
often took the form of silver medals imprinted with the words "meritorious deed."
Less glorified but equally essential to the success of a political enterprise was the
day-to-day business of fiscal administration. The farmer who brought his yearly quota
of grain to the local storehouse by his very act acknowledged the sovereign as
paramount lord. Further, the cardinal principle of traditional Southeast Asian law was
status rather than contract. In twelfth-century Cambodia, for instance, a commoner
accused of a certain crime was fined 5/8 pala of gold whereas a royal prince (ràjaputra)
would have been assessed 20 pala of gold for the same offense.
Each of the transactions noted above is a linked transfer. A transferís a transac-
tion in which "...the goods and services flowing from one person or group to another
are not 'balanced' by a counterflow of equal value."27 Redistributive and command
economies are typically structured around a series of linked transfers which take the
form of: A transfers xto 6. As a consequence of that action, A then receives y from C.
Because the specific quantities are usually stipulated by decree, the actual values of x
and y may be unrelated. In general, linked transfers can be described as payments in
26
The Importance of status relations in early Southeast Asia is dealt with in Welters, History,
Culture, and Region and Charles Higham, The Archaeology of Mainland Southeast Asia
(Cambridge: Cambridge University Press, 1989). My views have also been influenced by
Pierre-Yves Manguin's paper, "The Merchant and the King, Local Perceptions of Ancient
Maritime Trade and the Foundation of Harbour-States in Insular Southeast Asia," presented at
the 1989 Association for Asian Studies Conference, Washington, D.C.
27
Pryor, Origins of the Economy, p. 280.

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14 Money, Markets, and Trade

response to some social, fiscal, religious, or commercial obligation. In contrast to the

majority of exchange transactions, linked transfers generally are not voluntary and not
negotiable.
The linked nature of many transfers can be illustrated by the donation of land to a
religious establishment. The initial transfer of the land would result in the reallocation
of tax payments from the state to the new owner (a linked transfer). The donor (and
the ruler who approved the request to grant land to the religious order) would also
receive religious merit as a result of the generous act (two additional linked transfers).
The valuation of such transactions for administrative purposes could well have pro-
moted the development of money.
Just as intrinsic and extrinsic measures of value have very different use character-
istics, so it is with intrinsic and extrinsic means of payment. An intrinsic means of pay-
ment is one which grows naturally out of the obligation, such as a farmer paying taxes
in grain. If the farmer is required to pay taxes in silver or gold, an entirely different
dynamic has been set up. In order for him to fulfill his tax obligation he must acquire
the necessary precious metal, purchasing it (often at discriminatory rates, a form of
double taxation) in exchange for the grain from his fields.28 Similarly, when a ruler
gives gifts of precious metal to his retainers, it is assumed that they will have the ability
(if so desired) to convert that metal into consumables in the marketplace. The move-
ment away from intrinsic means of payment implies a movement away from redistribu-
tive economies and toward economies which are market-driven. Thus, even though
the act of distributing gifts during a festival or ceremony is clearly redistribuí!ve, the
form taken by those gifts can indicate the parallel existence of a marketized compo-
nent of the economy.
One of the most striking features of the monetization of indirect exchange and
linked transfers is that the physical form of the money objects used in such
transactions are frequently identical. This observation is sufficient to point out the
difficulty of assuming specific functions for money objects on the basis of physical
characteristics alone. Unfortunately, we are frequently left in just such a position.
Physical monies usually fall into one of two categories—they are either money
goods—cacao beans, bundles of unthreshed rice, or cattle—which, on the basis of
their physical appearance alone, cannot be distinguished from other commodities of
the same type used for non-monetary purposes, or, money objects, created specifi-
cally for the purpose of fulfilling some monetary function, such as struck coin or paper
currency.29 Each category presents its own set of interpretive difficulties.
As was noted above, money goods cannot be readily distinguished from non-
money goods on the basis of their physical characteristics alone; the shape of the
transaction together with its context allows one to determine whether or not a good is
in fact "money." An exchange transaction from eighth-century Cambodia (discussed
28
This can also be seen as a means of coercing people into economic patterns in which they
would not normally be engaged. A Chinese work of the early tenth century further stresses the
difficulty of requiring payment in cash when the economy is only partially monetized (not to
mention the general denigration of merchants and market exchange among the Chinese elite):
"If they are compelled to pay entirely in ready cash [the cast copper coin], or else commute it
to gold or silver, it will be impossible for them to come by this money by means of farming. They
will have to trade to get it. This is simply teaching the people to abandon what is fundamental
for what is peripheral." Mark Elvin, The Pattern of the Chinese Past (Stanford: Stanford Uni-
versity Press, 1973), p. 148. Emended.
29
White, Evolution of Culture, p. 340.

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 Money 15

further in Chapter Six) is illustrative. Paddy commonly served as a non-monetary

means of payment in a large number of early inscriptions. In this transaction, however,
a quantity of paddy, given over in exchange for a ricefield, is valued in terms of tamlih
of silver and yau of double cloth. Due to its association with the two monies of
account, and because it serves as a means of payment in a number of other inscrip-
tions, paddy in this transaction is a money good. This type of transaction is to be
distinguished from the use of disparate goods for purposes of payment, with no
apparent preference, in the Egyptian example presented earlier.
Money objects are made specifically for the purpose of facilitating transactions.
Coins are a special kind of money object, being "...pieces of metal stamped...with
devices which relate them to the monetary units named in verbal and written transac-
tions, so that they represent these for all legal purposes."30 Coins also possess two
features, uniformity and duplication, which make them ideally suited to serve as
money objects. Coins of a single issue or variety are quite often nearly indistinguish-
able, having been stamped with a die or cast in moulds, each piece being inter-
changeable with the next. And, coins are typically made in large quantities, readily
becoming an integral part of a shared monetary convention.
Coins are frequently recovered in archaeological excavations. Because they are
so common, and usually similar in form to what we are accustomed to in our own
experience, assumptions are regularly made regarding the significance and use of
coinage in historical economies. One commonplace assumption is that the
geographical distribution of coinage is to be explained as the end result of commercial
(or marketized) exchange.31 A cursory examination of coin circulation reveals the
fallacy of such a view. The circulation of coin is a process taking place over time. After
a coin is minted by the proper authorities, its circulation might begin when it passes
into the hands of bankers or merchants. The coin may be used to purchase
foodstuffs by the populace, donated to the local church as a tithe or faith offering, and
subsequently paid into the king's treasury for tax purposes. The king, in turn, might
pay it out to a soldier as part of his salary, bestow it upon the poor during a procession,
include it as part of a tribute payment, or have it reminted into new coin. Each of the
transactions involving the coin has a different look; there are religious donations,
exchanges with a profit motive, and administrative transfers.
Consider as well the many ways coins are removed from circulation. Coins may be
lost at the marketplace, in fields or at fairs, buried to provide security for lean years,
hidden from bandits and invading armies, or stolen as booty. Coins are used in jewelry
or melted down and cast into religious imagery. And, coins are frequently taken out of
circulation when the intrinsic value of the metal contained in them is greater than their
circulating value (Gresham's Law). It is these coins which years, or even centuries,
later are recovered as chance finds or, less often, through archaeological excavation.
The geographical distribution of coins, then, represents an accidental and partial view
of coin circulation, providing us with limited clues about the day-to-day functioning of
coinage as an agent in economic and social transactions.32
30
Grierson, Origins of Money, p. 7.
31
Philip Grierson has repeatedly warned against such an assumption. See his "Commerce in
the Dark Ages: A Critique of the Evidence," in The Pirenne Thesis, Analysis, Criticism, and
Revision, ed. Alfred F. Havighurst (Lexington, MA: Heath and Company, 1976), pp. 146-59.
32
Coin finds (and especially hoards), however, are particularly useful for determining the rela-
tive date and contemporaneous circulation of various coin issues.

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16 Money, Markets, and Trade

A study of coins from Iron Age Europe by J.R. Collis provides an interesting
example of how assumptions about the interpretation of numismatic evidence must
be carefully tempered with relevant data from other sources. In his study, Collis con-
cluded that "...gold and silver coinage...had a prestige value, being employed in
conditions of reciprocity, and bronze coinage was employed for market exchange."33
Colin Renfrew agreed with this assessment and added that "...the existence of any
low-denomination coinage, used within the jurisdiction of the issuing authority, is an
indication of market exchange."34 These writers are assuming that a precious metal
coinage, because of its relatively high value, would have been utilized in contexts
other than market exchange. While this may be true in many instances, especially
when the coin type is limited in its geographical distribution, precious metal coins
often take on important exchange functions as well. In ancient Java, for example, the
primary function of local gold and silver coinage was redistributive; however, a study
of inscriptions and external sources reveals that an important secondary role for this
coinage was its use in local and interregional trade, indicating at least some market
basis.
The presence of base metal coinage is viewed by Collis and Renfrew as an indica-
tor of marketized exchange. Again, caution must be exercised. Chinese copper cash
in Java, for example, was at first treated by the Javanese as a commodity, to be traded
like any other good. It was only later (beginning in the late thirteenth century) that this
base metal coinage acquired monetary attributes and ultimately came to be utilized in
virtually all transaction^ contexts. It is here that the qualifying phrase adopted by
Renfrew ("used within the jurisdiction of the issuing authority") takes on particular
force. When a base metal coinage circulates in the area intended for its distribution
and use, a market orientation is likely if not assured. Once it no longer becomes pos
sible for the issuing authority to exercise jurisdiction, as when Chinese cash is
exported to foreign countries, there is no guarantee that the primary function within
the recipient society will be to facilitate economic exchange. Indeed, in many socie-
ties imported goods become symbols of status and wealth. It cannot be assumed a
priori, then, that the presence of base-metal coinage presupposes the presence of
markets. This is particularly true when the coinage is imported rather than produced
locally. In such instances one must search for signs of non-market usage (a source of
metal for tools or utensils, for decoration or ornament), in an effort to determine more
accurately the precise role of coinage within that society.
This is not to say that an examination of surviving coins cannot provide important
keys to their functioning within a society. If nearly all known specimens of a high-value
coinage are in pristine condition, for instance, it is likely that the coinage was utilized
chiefly for unilateral payments, having a minimal impact on the marketplace. The pres-
ence of multiple denominations, especially in base-metal coin series, opens the door
to wider usage, allowing for the possibility that the coinage was utilized in marketized
transactions. While the physical characteristics of a coin series, as well as its
geographical distribution, can provide valuable clues to its function, the precise role
of that coinage must be confirmed through a study of literary sources. Consequently,
33
J.R. Collis, "Markets and Money," in The Iron Age and Us Hill-Forts, ed. D. Hill and M. Jesson
(Southampton, Eng.: Southampton University Archaeological Society, 1971); cited in Colin
Renfrew, "Trade as Action at a Distance: Questions of Integration and Communication," in
Ancient Civilization and Trade, ed. Sabloff and Lamberg-Karlovsky, p. 53.
34
Renfrew, "Trade as Action at a Distance," p. 53.

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 Money 17

although coinage and paper currency can be identified as money objects on the basis
of their form alone, the quality of their "moneyness" must be demonstrated and not
assumed.
The denominational structure of early coinage most often corresponded to a
standard weight unit and its subdivisions. Further, the names of coins (attested by
their appearance in inscriptional sources) were frequently identical to the weights
they represented. This practice, however, often makes it difficult to determine with
absolute certainty if a transaction utilized standardized coinage or simply metal by
weight. Similarly, in several parts of early Southeast Asia the local term for silver
became synonymous with the idea of "money," there being no specialized term for
the latter. In other instances, the polyvalent Sanskrit arthawas adopted. Fortunately, a
feature of many premodern monetary systems is that the metallic referent was
dropped in coin-using situations. In Thailand, for example, the earliest references to
exchange in Thai inscriptions specify the metal used, e.g. "gold (of) 1 tamliñ (weight)."
Following the introduction of coinage in the fifteenth century references to coin use
were conventionalized as "7 baht (in silver coin)."35 In other instances there is no
denominational referent, as in a copper-plate charter from Arakan which reported an
"income of 3000" or an inscription from Assam which recorded a payment of "900
gold." Both possibly refer to coin. (See Chapter Three.) It is far less common to find
direct reference in written sources to either an indigenous word for coinage (usually
derived from the Sanskrit karsapana, "a piece weighing one karsa") or minted coins,
such as "silver struck [with a die]" or "silver with the imprint of a hantha."36 It goes
without saying that, whatever the literary situation prevailing in any particular locality,
the presence of coinage must be confirmed by the archaeological record.
Exchange values were most often determined by the metallic content of the
coinage used for exchange or payment. The evolution of coinage, however, did not
stop with the minting of coins possessing full denominated value. As White explains,

If the state is to guarantee the value of a metal object used as a medium of

exchange, it need not contain within itself the full value that it represents. In other
words, a (token) coin may stand for a value or be redeemable by an actual value
instead of containing that value itself..The substitution is carried still further in the
issuance and use of paper money. Here a piece of paper serves as a medium of
exchange without having any value in and of itself at all. It merely stands for a
value and is redeemable in real value, i.e., gold.37

The successful introduction of a fiat money requires an administration capable of

policing and enforcing price changes in order to support the value of the token
currency.
It is appropriate to conclude this chapter with a consideration of two theories of
the origins of money, serving to highlight the widely divergent viewpoints which still
surround this topic. According to Philip Grierson, a prominent medievalist and numis-
matist, administrative monies appeared before money in the marketplace. He also
35
See Robert S. Wicks, "A Survey of Native Southeast Asia Coinage, Circa 450-1850: Docu-
mentation and Typology" (PhD dissertation, Cornell University, 1983), pp. 149 and 153 for rep-
resentative examples.
36
Ibid., pp. 93 and 98.
37
White, Evolution of Culture, p. 342. Emended.

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18 Money, Markets, and Trade

believes that the generalized application of monetary values, i.e. full monetization,
would probably not have come about before the appearance of market economies.38
Karl Polanyi, on the other hand, while still linking the widespread use of money to the
rise of markets, argues that money as a medium of exchange preceded the adminis-
trative use of money.39 Which view is more plausible?
From the perspective supplied by this chapter, and amplified in the following
pages, it is not impossible that exchange and administrative monies developed nearly
simultaneously, requiring as they do a centralized governing body to enforce the
standardization and acceptance of money units. The importance of a stable adminis-
trative structure is probably critical in monetary systems which rely upon a standard-
ized coinage or currency; it would be less essential where the physical money was a
naturally occurring substance, such as grain or cowrie shells. As we have seen, the
context of monetization also greatly influences its potential impact, making it neces-
sary to examine the relationship between administrative structure (be it political, reli-
gious, or commercial in nature) and the development of particular forms of monetary
systems. It is equally important to consider the levels and degree of interaction
between the various institutional components to determine their impact on the evolu-
tion of money within a society. In short, there are no simple or unequivocal solutions
to the problem of monetary origins.
38
Grierson, Origins of Money, pp. 10, 19.
39
Dalton, "Polanyi's Analysis," p. 88.

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