Greek City-States Use Coins as Means of Exchange Summary

  • Last updated on November 11, 2022

The Greek city-states used coins as a means of exchange as they expanded their area of settlement and became economically sophisticated in their trade relations.

Summary of Event

The earliest Greek trade occurred during the Neolithic era and was opportunistic in nature. In response to a particular need or an unusual situation, Greeks ventured on the sea and engaged in rudimentary barter to secure what they needed or to gain an economic advantage. The leaders of the earliest Greek communities were eager to import luxury goods such as jewelry, decorative pottery, and ornamented weapons that they ultimately used as grave goods. The Greeks usually obtained their luxury goods from Levantine or Minoan traders who called on the Greeks of the mainland at infrequent intervals.

When the Greeks needed additional food supplies or raw materials such as wood or metals, they sought to trade their locally grown produce or locally manufactured goods for that which they needed from various traders who happened into the area. In terms of competition, however, the earliest Greek traders were at a decided disadvantage because Greece offered little in the way of natural resources to use as beginning trading capital. To compensate for this deficiency, the Greeks participated in a combination of commerce and piracy, trading with or attacking passing ships as the occasion allowed.

Greek merchant adventurers traded with the people who inhabited the Aegean islands and the various peoples who lived along the coasts of the Black, Ionian, and Mediterranean Seas. With increased experience at sea and a growing familiarity with overseas territories and peoples, the Greeks began the process of overseas colonization. Over an extended period of time, from the Late Bronze Age through the Iron Age, mainland Greeks colonized the islands of the Aegean and the coastal areas of Asia Minor. The greatest period of colonization, however, occurred from about 734 to 580 b.c.e., when the Greeks succeeded in founding more than three hundred Greek communities along the Mediterranean coasts of present-day Africa, Spain, France, southern Italy, and the northern shore of the Black Sea. With the notable exception of the Greek communities of the Black Sea region, all these Greek colonies developed into independent city-states.

For the most part, the newer areas of colonization had climates similar to that of mainland Greece. This factor not only enabled the Greeks overseas to practice their usual forms of agriculture without change but also helped them to adapt to their new surroundings quickly. In addition, the colonial areas commonly offered the Greeks more economic opportunities than they ever had before. The Greeks in colonial areas wanted to have the foods and products they were used to having in their former homelands. There developed a significant and steady trade between the mother cities of mainland Greece and the daughter cities overseas in foodstuffs (olives, olive oil, wine, grain, and fish), raw materials (timber, marble, and metal ores), and manufactured goods (such as pottery).

Through their trade and colonization efforts, the Greeks came into contact with a number of people (particularly in Asia Minor and the Levant) who were more economically advanced than they were and who had developed more sophisticated political organizations than they had. Some of these people had writing and numerical systems through which they could record tax collections and maintain inventory lists of produce and weapons. The traders from these more advanced economies were able to conduct more complex economic transactions than just barter. To participate in these more complicated and many times more lucrative economic transactions, the Greeks had to adjust to these new realities. In addition to adapting the Phoenician alphabet to the Greek language, the Greeks adopted and improved on a new economic development—coinage.

Both archaeology and Greek tradition attribute the beginnings of coinage to the Lydians of the interior of Asia Minor. The Greeks, having colonized the coastal areas of Asia Minor, would have come into economic contact with the Lydians at a very early date and would have been one of the first people introduced to the concept of coinage. Coinage is simply a method of designating value on a specific amount of precious metal. When a state struck or marked a coin with its mint mark, it certified the purity and weight of the precious metal in the coin and guaranteed its value. Coinage enabled an individual or state to store value or wealth in the form of a coin of precious metal that could be used again at some time in the future. The earliest coins, however, represented relatively high values and were probably issued to facilitate large payments between and among the various independent states of Asia Minor.

The Lydians appear to have struck their first coins sometime around 640 b.c.e., and the Greeks soon followed suit. The earliest Lydian coins were of electrum, an alloy of gold and silver, and the Greeks usually struck their coins in silver. Although both the Lydians and the Greeks had access to gold, they rarely coined it because it represented such a high value in relationship to silver. It was the Greeks who developed, refined, and expanded the use of coinage. The island of Aegina off the Greek mainland was the first Greek city-state to issue a large number of silver coins and struck them with the image of a sea turtle. Soon, the Greeks recognized the Aeginetan “turtles” as a practical coin standard and used them as a medium of exchange throughout their trading area. Aegina came to dominate the seaborne trade within Greece and the Greek trade with Egypt and the other countries of the eastern Mediterranean. With the expansion of trade, other Greek city-states struck coins and used mint marks unique to their cities as their guarantee of value.

Although there was no international regulation of coinage, the Greeks realized early that there would be economic chaos if every Greek city-state issued coins according to its own arbitrary standard of weights and measures. Although Aegina was the earliest Greek city-state of the mainland to strike coins, its standard did not end up the sole standard for Greece. Greek city-states roughly adhered to, with local variations, one of two standards of coin weights and measures—the Aeginetan standard and the Euboic standard. Of the two weight systems, the Aeginetan system possessed the heavier weights, since it contained more silver in its coins. During the history of ancient Greece, the Euboic system gradually replaced the Aeginetan standard as the most common coin standard.

Significance

Whether coins were used as tribute payment or for payment for goods and services, the advent of coinage marked a great advance for the Greek city-states. When a state had to pay an obligation, the obligation did not have to be paid in bullion that would have to be weighed and assayed each time it was used in a transaction. This made trading simpler and allowed for far more complicated deals than could be accomplished by barter. Gradually by the fifth century b.c.e., Greek city-states began to mint smaller denomination coinage to facilitate the economic transactions of the average person. This brought the convenience and standardization provided by the use of coins in trade to the level of the ordinary person, thereby increasing the level of economic transaction that an individual could make.

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Carradice, Ian. Greek Coins. Austin: University of Texas Press, 1995. An up-to-date and thorough publication written by one of the leading authorities on Greek and Roman coinage.
  • citation-type="booksimple"

    xlink:type="simple">Hasebroek, Johannes. Trade and Politics in Ancient Greece. Translated by L. M. Fraser and D. C. Macgregor. Chicago: Ares, 1978. Originally published in German in 1928, this book has been recognized by the world’s leading authorities as a classic work for a topical overview of the subject.
  • citation-type="booksimple"

    xlink:type="simple">Lowry, S. Todd. The Archaeology of Economic Ideas: The Classical Greek Tradition. Durham, N.C.: Duke University Press, 1987. An unusual economic history that examines archaeological finds in the light of their economic significance and their relationship to the overall evolution of classical Greece.
  • citation-type="booksimple"

    xlink:type="simple">Malkin, Irad. Religion and Colonization in Ancient Greece. Leiden: Brill, 1987. An important work by a leading scholar on Greek colonization.
  • citation-type="booksimple"

    xlink:type="simple">Meadows, Andrew, and Kirsty Shipton, eds. Money and Its Uses in the Ancient Greek World. New York: Oxford University, 2001. A collection of papers presented at two conferences in 1995 and 1997 on money in ancient Greece. Bibliography and index.

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