Financial Lessons From Ancient Civilizations
Ancient Egyptian civilization flourished during the third millennium B.C. Egyptians developed intricate sculpture and painting traditions, as well as a calendar with 365-day cycle and hieroglyphic scripting systems.
Athens was famed for its open discussions, which proved essential in solving budget crises successfully. Elected representatives should not hesitate to inform voters of any financial implications related to proposed policies they propose.
1. Money Was Not a Priority
This book investigates how finance has enabled civilizations to rise and fall, focusing on five innovations which have played a central role throughout human history: writing; the establishment of cities and towns; standard coinage; record keeping; contracts; and an interest calculation numbering system that enabled compound interest calculations.
The authors explore how financial innovations were adopted into each ancient society, from Egypt and Mesopotamia through Mesopotamia, China, and India. They describe underlying economic characteristics and systems.
As one example, they note that ancient Maya did not use coins as currency and instead exchanged commodities such as tobacco and maize grain in exchange for tribute or taxes owed. But there was one type of money used at that time: cacao beans which later formed the basis of your Hershey bar.
2. Money Was a Means of Exchange
People used markets as platforms to exchange goods and services, including loans, as well as to utilize various financial tools for mobilizing resources, mitigating risks, creating alliances and mobilizing alliances in the past. Some tools could be quite sophisticated; Assyrian traders used tools similar to what are known today – checks, bonds or joint-stock companies – to finance their business activities while keeping records – such as tally sticks – to monitor debt payments. They even developed written forms, like Cuneiform in Mesopotamia as well as oracle bone in Ancient China as well as quipu-knotted strings in South America – for use when performing these financial maneuvers.
Money helps economies prosper as it serves multiple functions, including as a medium of exchange, unit of account and store of value. Money allows producers to assess how much their goods are worth in relation to those of competitors and thus speed transactions while encouraging specialization and specialization of goods production.
3. Money Was a Way of Dispute Resolution
Early civilizations built large monuments and structures which required much labor. Although costly, such projects were necessary if societies wanted to remain viable.
Ancient Egyptian pharaohs were often seen as human manifestations of gods, and their religious practices helped justify their power over their subjects. By contrast, Greeks embraced rugged individualism; believing that success for one individual meant success for all.
Athens was famous for its open discussions of public finances, where ordinary citizens participated in budget debates to identify any unaffordable policies, while open debate of finances was essential to maintaining its financial health and democracy’s freedoms – contributing greatly to Athens becoming one of the greatest states on Earth.
4. Money Was a Way of Keeping Records
Students often struggle with the large amount of information provided in courses on ancient civilization, so visual study guides and flip cards are invaluable aids in helping them retain lessons.
Early civilizations required a means of monitoring economic exchanges and complex institutions. Cuneiform writing emerged in Mesopotamia, oracle bone inscriptions made an appearance in Ancient China, and knotted strings used for counting and simple calculations called quipu were invented in South America to assist societies better manage themselves. Athens was known for having regular public debates of budgets to allow ordinary citizens to weigh in on tough spending decisions and filter out policies which were unaffordable – which resulted in it becoming the leading cultural innovator and military superpower of classical times while managing to maintain stable finances over its history.
5. Money Was a Way of Managing Risk
Ancient civilizations relied heavily on barter or trading to obtain their necessities, but with money’s arrival it became much simpler for people to control resources and manage risks.
Goetzmann notes this was especially the case for early civilizations that were bound together by religion, such as Egypt’s Pharaohs who practiced divine kingship by proclaiming themselves to be divine incarnations, or representative, of their gods.
Mesopotamia saw writing emerge as an aid to contracting and record keeping; while in Grecian times orators were hired to represent creditors and debtors in front of crowds. According to Goetzmann, these innovations enabled private finance, dispute settlement, as well as wealth accumulation by smaller numbers of people.