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Mark Lehman's NJCL Lecture
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You'll see, too, as we go along, how changes in the social contract are clearly represented in the changes in Roman coins, You remember Roman coins, right?  "We came here to hear about Roman coins, so what's this maniac raving about social contracts and washers for?"  - bear with me please while we stroll briefly down memory lane.

Now, not too long ago,

 

3. 20th century. - Familiar looking -US including gold

US Silver and Gold coins
US Silver and Gold coins
 

and as I look around I see I'm just about (well, maybe not) the only person here who can remember this - OUR US coins, most of them at least, had intrinsic value - not quite as much silver as their nominal value, but our pocket change was solid silver within living memory. (tap head - memory may be getting dim, but sometimes we remember)  A generation or two earlier, gold was legal tender in the US, too -it was more money than most people walked around with, but it was out there - my grandfather saved the gold coins in this picture out of circulation just before gold was demonetized in the 30's.  Back then, almost all coins had an intrinsic value  - a significant fraction of their nominal value - regardless of the issuing authority, they were worth at least the value of the precious metal they were made from.  This sort of arrangement is known as SPECIE or BULLION coinage -


Now, humans managed to trade commodities by Barter since, well, since forever.  The intrinsic values of commodities like a cow, or a chicken, or a loaf of bread, were obvious - they might have varied from time to time and place to place, but their values were easily recognized. 
Unfortunately if you weren't in a mood to eat a loaf of bread, or a chicken, or a cow (pause) you had to DO something with your barter item or it might lose its value quickly.  Metal was durable, it had many practical uses, and its value was universally recognized, so from its first discovery it was a natural as a medium of exchange - and you didn't have to eat it, feed it or worry about it running away. 

Nuggets of Electrum, a naturally-occurring alloy of silver and gold, that washed-out of streams in a part of the world we call Turkey today, and that happened to be occupied at the time by people who called themselves Greeks, proved very convenient as barter objects - they seemed ideal for commerce - and they were used for centuries - but the problem was, how much metal was in each nugget? - and if it was a precious metal, how pure was it?  So, convenient as these nuggets were for trade items, they each had to be weighed and assayed at every transaction. 

4. Early (EPI PHANOS/ siglos, etc.)

Epiphanes and slugs
Epiphanes and slugs
 

And so this, this is where it all began - where it all came from - "hallmarked slugs" we call them - some early king decided to settle the issue of weight and purity of the metal in commerce, and at the same time - get his own name advertised around as the guy smart enough to say "It's a known weight of good metal because I say it is and if you don't like it you may discuss it with my army!"  That's essentially what the inscription on this piece says "I am the Badge of Phanos" So the first Western coins were basically "slugs", but NOW they were slugs of a known weight and fineness. And it was convenient for people to accept this part of the social contract, since the coin's worth was still precisely the value of the precious metal it was made from.