In a post on the GHMB website in February 2021, Magisterchessmut (Stephen Dail) wrote:
Something caught my eye on a subject I have been studying for some time now regarding the ratio of gold to silver in early Babylonian and later Persian era up until the conquest of Alexander of Macedonia. The ratio of gold to silver was 1:13.333 or 40/3 for silver in ratio to gold. The question is why was this system established and upheld for so long when the recovery process of the two metals can fluctuate considerably over the ages and locales it comes from.
He went on to quote this from this text: Introduction (including weights and types) (snible.org):
The above weights, quite irrespective of their Babylonic derivation, point clearly to a recognized system of interchangeable values in the different metals, and moreover to the fact that a Babylonian gold unit ranging in weight from about 126-135 grs. is the root norm which, at the ratio of 13 1/3 to 1, accounts for all of them.
The persistent maintenance of this ratio from first to last in the Royal Persian coinage is probably due in part to a comparatively steady balance in the East between the supplies of gold and silver, and in part to the legal establishment throughout the dominions, at first of the Lydian monarchs and, later, of the Great King, of a bimetallic system of currency framed in accordance with that rate of exchange.
In the case of autonomous or semi-autonomous cities in Asia Minor, where the daric or its equivalent in electrum may not have circulated freely, there would naturally be a tendency towards an appreciation of the gold unit, and consequently towards an augmentation of the weight of the local silver issues. This would be a sufficient explanation of the various deviations from the official Persic Ten-stater standard (86.45 grs. for the siglos and 173 grs. for the stater), and from the corresponding Phoenician Fifteen-stater standards (115 or 230 grs.) which local autonomous coinages in silver often betray. The same phenomenon, or, inversely, a diminution in the weight of the silver stater, might also be caused by a local super-abundance in the one case, or scarcity in the other, of silver.
§ IV. THE COIN-STANDARDS OF EUROPEAN GREECE.
Turning now to European Greece, we are confronted with problems of considerable difficulty, which are too complicated to be satisfactorily dealt with in this Introduction.
We have seen that the two principal Asiatic silver standards, known respectively as the Babylonic or Persic 10-stater standard and as the Phoenician 15-stater standard, were originally constructed in accordance with the ancient relative values of gold and silver in the East; 13 1/3 to 1, a ratio which remained stereotyped in the bimetallic currency of the Persian empire down to the time of the Macedonian conquest and the reorganization by Alexander of the royal coinage on the basis of the altered relation of gold to silver, no longer 13 1/3 to 1, but, since Philip’s reign, 10 to 1.
From this, Magisterchessmutt concluded:
It now appears that the actual relevance of this system was astronomical and geodetic in nature rather than economic oriented. The gold ratio to silver was established as the ratio of the Sidereal Lunar Months to the Solar Year which was fixed as 40/3 or 13.333 Sidereal Months to 1 Solar Year. And when this is calculated as 27.34375 days x 40/3 = 364.58333 days, which is the decimal equivalent to an Imperial Ft. value of a degree x 1000 to 364,583.333 Ft. per degree of the Polar Meridian circ. x 360 degrees = 131,250,000 Ft. Polar Meridian circ. This system was in place long before coinage became standard practice and continued initially up until the conquest of Alexander changed it to more of an economic rather than astronomic system and effectively destroyed the significance of it as a standard. What this demonstrates, is that the Polar Meridian circ. of the Earth was known long before either Eratosthenes or Pliny or Strabo ever started meddling into this picture.
There are two things here that struck me as very important. One is the very old association between the sun and gold, and between the moon and silver, which goes way back. The other is the idea that Eratosthenes did not single handedly come up with a measure of the earth for the first time in history, and that before recorded history, at some stage, the dimensions of the earth were known, as were various astronomical cycles. This is a view that is shared by the 18th century writers such as Gosselin, Laplace, Bailly, Letronne and others. An analysis of texts from ancient Greece and Egypt,for example works by Eratosthenes, Pliny, Strabo, reveals that they could have been working with maps and units of measure that had already been created long before them, and which they had trouble in interpreting. In fact, various inconsistencies in these works can only be explained by the fact that they had themselves misinterpreted documents themselves.
The concept of the values of gold and silver being interwoven in with an astronomical system is astounding. Centuries before the Sun King, Louis XIV of France, who considered himself to be an embodiment of the sun and regularly appeared covered in gold, it seems the connection between the sun and gold was not just based on their colour or some poetic notion, but on number, and on value. This would have enabled the existence of a widespread system of trade, which would have relied on a set of unchangeable values to stabilise it.
The link between silver and the moon is deeply ingrained in our consciousness, and often appears in poetry. For example in this poem by Walter de la Mare:
Silver
Slowly, silently, now the moon
Walks the night in her silver shoon;
This way, and that, she peers, and sees
Silver fruit upon silver trees;
But these lovely images also must have a practical, commercial side, in that the value of silver would have been reliant on a fixed and dependable cycle of the astronomical world: the moon, in relatino to the sun and the earth.
Other metals are connected with other bodies of the solar system too. Mars is iron, Mercury is, eh..., mercury, Jupiter is tin, Venus is copper and Saturn is lead. Perhaps their values were also fixed by an aspect of these planets' cycles.
Stephen Dail's findings raises questions about the nature of trade in ancient times, and the idea of stability that may once have governed things on earth, a kind of divine order that had to be implemented and maintained in every aspect of life. Was the world of commerce in fact governed by heavenly bodies? This idea fits in well with a Michell understanding of the ancient world, whereby sacred number and an ideal cosmos underlie every possible manmade structure, and idealism is about the rule of scientific code permeating every aspect of life. When you think of how widespread the symbolism of the two precious metals is and was around the world, the connection to the sun and moon, you have to wonder how widespread this cosmological monetary system could have once been too.
This isn't just gold and silver symbolising certain aspects of human character, as in Plato's Republic, or some vague notion of solar and lunar energies in the human soul, that great alchemical cauldron.
If silver and gold once have a stable value, how would that have worked in terms of an abundance or scarcity of these metals? It doesn't seem to have mattered whether gold or silver were actually used in a transaction. This is key. Coins might not have been necessary. Rather the value of silver and gold, to provide a scale of value, was what mattered. While something might have been valued in silver, there was no need for silver to physically have been exchanged. This would have kept the values relatively stable, as well as the entire trading system - in theory. This must have been very useful without central banks and with many independent city states: silver and gold always had the same value no matter where you went. In fact, the way we shop and trade today is in fact quite similar, we don't physically hand over coins anymore, and even if we do, these are meant only to represent their value according to the value of gold, but are in themselves almost worthless. It is true of course that our currencies fluctuate, and the price of precious metals fluctuates, but our way of shopping without actually exchanging precious metals could still work if that were not the case, and the central values of our economic system were unchanging. We like to think of the appearance of coins in history as signs of human progress, of civilisation, a step up from barter. But I wonder if we shouldn't try to think of the appearance of coins as a phenomenon that coincides with the breakdown of a great system that may have been stable for many centuries. And should we think of the absence of coinage, what we refer to depracatingly as barter, not instead part of a simple but sophisticated system of trade, one based on the cycles of the sun, moon and the earth.
In The Invention of Coinage and the Monetization of Ancient Greece, by David M. Schaps, the author writes:
Quote Silver often served for payments to the state, but where it was in short supply and narrowly distributed through the population, it could not serve for all of the large areas of the economy that were taxed. What we know about the taxation system indicates that payments were overwhelmingly exacted in kind and that the wealth thereby accumulated was redistributed rather than being exchanged: the Assyrian and Babylonian palaces, like the Egyptian, took what they needed and gave it to whom they pleased. The silver of the Near East had never been coined; it was weighed at each transaction, and the scale was an essential accessory to every sale. All silver was equally valuable; rings, bars, and broken bits of silver could bethrown equally into the balance. Indeed, if the weight turned out uneven,one could always chop up an item to make the scale balance.
So if the sun/moon ratio defined the relative values of gold and silver, this would have had a very practical use, but also a kind of metaphysical dimension. I don't know if Aristotle has an economic theory as such, not as we'd understand it, but what he says about the world, which is something ordered, and the movements of the planets can shed some light on it: the proper place of an element is determined by the cosmic order, which, in turn, depends on the difference between the celestial and sublunary spheres. In fact, even living things are all related to this same cosmic order.
Quote Aristotle We must also consider in which sense the nature of the universe contains the good or the supreme good; whether as something separate and independent, or as the orderly arrangement of its parts.Probably in both senses, as an army does; for the efficiency of an army consists partly in the order and partly in the general; but chiefly in the latter, because he does not depend upon the order, but the order depends upon him. All things, both fishes and birds and plants, are ordered together in some way, but not in the same way; and the system is not such that there is no relation between one thing and another; there is a definite connection.Everything is ordered together to one end; but the arrangement is like that in a household, where the free persons have the least liberty to act at random, [20] and have all or most of their actions preordained for them, whereas the slaves and animals have little common responsibility and act for the most part at random; for the nature of each class is a principle such as we have described.3 I mean, for example, that everything must at least come to dissolution; and similarly there are other respects in which everything contributes to the good of the whole.
I had a look in some classical texts for some kind of mention of an analogy between the respective values of gold and silver and the solar and lunar cycles but I couldn't find any. Maybe, if this sun/moon standard existed, it pre-dates Aristotle, Plato and co. While Plato, uses gold as an analogy to characterise the best sort of people, it seems he didn't approve of anyone actually owning any gold. He says in the Laws:
For such a preference implies that the body is more honourable than the soul; and this is false, for there is nothing of earthly birth which is more honourable than the heavenly, and he who thinks otherwise of the soul has no idea how greatly he undervalues this wonderful possession; nor, again, when a person is willing, or not unwilling, to acquire dishonest gains, does he then honour his soul with gifts-far otherwise; he sells her glory and honour for a small piece of gold; but all the gold which is under or upon the earth is not enough to give in exchange for virtue.
And a little further on, he says:
Further, the law enjoins that no private man shall be allowed to possess gold and silver, but only coin for daily use, which is almost necessary in dealing with artisans, and for payment of hirelings, whether slaves or immigrants, by all those persons who require the use of them.
and also
Therefore we say that gold and silver ought not to be allowed in the city, nor much of the vulgar sort of trade which is carried on by lending money, or rearing the meaner kinds of live stock; but only the produce of agriculture, and only so much of this as will not compel us in pursuing it to neglect that for the sake of which riches exist-I mean, soul and body, which without gymnastics, and without education, will never be worth anything; and therefore, as we have said not once but many times, the care of riches should have the last place in our thoughts.
It's interesting that in modern times the values of gold and silver have been relatively stable for so long. John Stuart Mill says in Principles of Political Economy:
On the whole, no commodities are so little exposed [as gold and silver] to causes of variation. They fluctuate less than almost any other things in their cost of production. And from their durability, the total quantity in existence is at all times so great in proportion to the annual supply, that the effect on value even of a change in the cost of production is not sudden; a very long time being required to diminish materially the quantity in existence, and even to increase it greatly not being a rapid process. Gold and silver, therefore, are more fit than any other commodity to be the subject of engagements for receiving or paying a given quantity at some distant period.
Karl Marx says in Capital Volume One Chapter Three: Money, Or the Circulation of Commodities:
The first chief function of money is to supply commodities with the material for the expression of their values, or to represent their values as magnitudes of the same denomination, qualitatively equal, and quantitatively comparable. It thus serves as a universal measure of value. And only by virtue of this function does gold, the equivalent commodity par excellence, become money.
Nicolas Copernicus had already said this in his “Treatise on Debasement” in 1517:
Coinage is imprinted gold or silver, by which the prices of things bought and sold are reckoned... It is therefore a measure of values. A measure, however, must always preserve a fixed and constant standard. Otherwise, public order is necessarily disturbed with buyers and sellers being cheated in many ways, just as if the yard, bushel, or pound did not maintain an invariable magnitude.
And John Maynard Keynes wrote in his “Social Consequences of Changes in the Value of Money”:
The Individualistic Capitalism of to-day, precisely because it entrusts saving to the individual investor and production to the individual employer, presumes a stable measuring-rod of value, and cannot be efficient - perhaps cannot survive - without one.
A "measuring rod of value", and "just as if the yard, bushel, or pound did not maintain an invariable magnitude"! If gold or silver are simply the means by "which the prices of things bought and sold are reckoned" as Copernicus put it, then that is compatible with an economic system whereby the values of these precious metals remain unchanging but also simply values, and are not needed to trade with physically.
366.666.../13.333 = 27.5
13.2 x 100/99 = 13.333
The standard was set
366.666/2.75*2.72 = 362.6666666
Nothing has changed.