Sapiens: a brief History of Humankind

27.
 One of the earliest coins in history, from Lydia of the seventh century 
BC
.
In turn, the power of the emperor rested on the denarius. Just think how
di cult it would have been to maintain the Roman Empire without coins – if the
emperor had to raise taxes and pay salaries in barley and wheat. It would have
been impossible to collect barley taxes in Syria, transport the funds to the central
treasury in Rome, and transport them again to Britain in order to pay the legions
there. It would have been equally di cult to maintain the empire if the
inhabitants of the city of Rome believed in gold coins, but the subject populations
rejected this belief, putting their trust instead in cowry shells, ivory beads or rolls
of cloth.
The Gospel of Gold
The trust in Rome’s coins was so strong that even outside the empire’s borders,
people were happy to receive payment in denarii. In the rst century 
AD
, Roman
coins were an accepted medium of exchange in the markets of India, even though
the closest Roman legion was thousands of kilometres away. The Indians had such
a strong con dence in the denarius and the image of the emperor that when local
rulers struck coins of their own they closely imitated the denarius, down to the
portrait of the Roman emperor! The name ‘denarius’ became a generic name for
coins. Muslim caliphs Arabicised this name and issued ‘dinars’. The dinar is still
the o cial name of the currency in Jordan, Iraq, Serbia, Macedonia, Tunisia and
several other countries.
As Lydian-style coinage was spreading from the Mediterranean to the Indian
Ocean, China developed a slightly di erent monetary system, based on bronze
coins and unmarked silver and gold ingots. Yet the two monetary systems had
enough in common (especially the reliance on gold and silver) that close
monetary and commercial relations were established between the Chinese zone
and the Lydian zone. Muslim and European merchants and conquerors gradually
spread the Lydian system and the gospel of gold to the far corners of the earth. By
the late modern era the entire world was a single monetary zone, relying rst on
gold and silver, and later on a few trusted currencies such as the British pound and
the American dollar.
The appearance of a single transnational and transcultural monetary zone laid
the foundation for the uni cation of Afro-Asia, and eventually of the entire globe,
into a single economic and political sphere. People continued to speak mutually
incomprehensible languages, obey di erent rulers and worship distinct gods, but

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all believed in gold and silver and in gold and silver coins. Without this shared
belief, global trading networks would have been virtually impossible. The gold
and silver that sixteenth-century conquistadors found in America enabled
European merchants to buy silk, porcelain and spices in East Asia, thereby moving
the wheels of economic growth in both Europe and East Asia. Most of the gold and
silver mined in Mexico and the Andes slipped through European ngers to nd a
welcome home in the purses of Chinese silk and porcelain manufacturers. What
would have happened to the global economy if the Chinese hadn’t su ered from
the same ‘disease of the heart’ that a icted Cortés and his companions – and had
refused to accept payment in gold and silver?
Yet why should Chinese, Indians, Muslims and Spaniards – who belonged to
very di erent cultures that failed to agree about much of anything – nevertheless
share the belief in gold? Why didn’t it happen that Spaniards believed in gold,
while Muslims believed in barley, Indians in cowry shells, and Chinese in rolls of
silk? Economists have a ready answer. Once trade connects two areas, the forces
of supply and demand tend to equalise the prices of transportable goods. In order
to understand why, consider a hypothetical case. Assume that when regular trade
opened between India and the Mediterranean, Indians were uninterested in gold,
so it was almost worthless. But in the Mediterranean, gold was a coveted status
symbol, hence its value was high. What would happen next?
Merchants travelling between India and the Mediterranean would notice the
di erence in the value of gold. In order to make a pro t, they would buy gold
cheaply in India and sell it dearly in the Mediterranean. Consequently, the
demand for gold in India would skyrocket, as would its value. At the same time
the Mediterranean would experience an in ux of gold, whose value would
consequently drop. Within a short time the value of gold in India and the
Mediterranean would be quite similar. The mere fact that Mediterranean people
believed in gold would cause Indians to start believing in it as well. Even if
Indians still had no real use for gold, the fact that Mediterranean people wanted it
would be enough to make the Indians value it.
Similarly, the fact that another person believes in cowry shells, or dollars, or
electronic data, is enough to strengthen our own belief in them, even if that
person is otherwise hated, despised or ridiculed by us. Christians and Muslims who
could not agree on religious beliefs could nevertheless agree on a monetary belief,
because whereas religion asks us to believe in something, money asks us to believe
that