by ICE-9, The Burning Platform:

One topic missing from historians’ analysis of the West’s transition from a physical gold and silver based money system to a fiat money system is the defining events that facilitated and enabled this transition. One can find no detailed and critical political / historical assessment of this transition, and it would be not for lack of effort. The transition is always presented as if it is prima facie the refined and evolved state of things that warrants no investigation other than superficial praise followed with dogmatic platitudes. But has this transition away from the “barbarous relic” money system actually made mankind more refined and evolved, or has it instead plunged mankind into an even more heightened and efficient state of barbarism?

One encounters additional blank pages when searching for any attempt at correlating the evolution and spread of fiat money to the prevalence and severity of war.  A collective learned silence descends when attempting to identify why it is, as money evolves, that war become more ideological, destructive, widespread, and prolonged.  We are all familiar with the endless adulations describing the global spread of “democracy”, but why is it so many are unwilling converts and it became imperative to spread “democracy” via war and regime change?  And closer to home, as our own nation “evolves” from a Constitutional Republic into pure “democracy”, how is it we as “citizens” feel more and more disenfranchised rather than empowered despite even greater doses of “democracy” at home?

This essay attempts to identify the defining events that facilitated and enabled the West’s transition to a fiat based money system, examines cause and effect between the evolution of money and the prevalence and severity of war, and binds together money evolution with the history of warfare by demonstrating cause and effect between money’s evolution, the rise and necessity of endless war, and the inevitable transition from “citizens” to subjects.

Physical Money, the Limits of War, and the Ancient World

For centuries following the Dorian Invasion, the Greek peninsula in the context of contemporaneous civilizations was of minor influence.  Limited wars between city states, the rise and fall of tyrants within these city states, a Lawgiver here and there, and a steady outflow of residents to the Mediterranean and Black Sea colonies were the main stories for 600 years until a rich silver deposit was discovered in southern Attica.  The wealth derived from these mines was initially distributed to the citizens and used for the great public building projects we see still standing today.  The flow of silver was also used to not only hold the Persians at bay and confine them to Ionia – and thus preserve Western Civilization as we know it today – but to also purchase slaves to work the silver mines, purchase imported goods, produce manufactured wares for export, commission triremes to transport manufactured wares, and hire highly paid rowers to man the triremes.  Trade and prosperity flourished and the Greek world rose quickly in the context of comparative global civilizations, all due to the abundant supply and liberal distribution of silver.

Then in 483 BC, soon after the discovery of a particularly rich silver deposit, the Athenian archon Themistocles convinced his fellow citizens to commission 200 triremes to fight the Persians and in 479 BC the Greek confederacy defeated Persia once and for all at the Battle of Plataea.  Rid of the Persian menace, fresh off defeating the world’s most formidable military force, and armed with 200 triremes with nothing to do, that silver now went more and more into Athenian empire building throughout the Aegean.  The cycle of conquest funded with silver was set – newly mined silver went into funding expeditions of conquest, tribute was extracted from the vanquished and flowed into Athens, and the combined silver from mined and tribute went to defending the city against jealous rivals and towards mounting even larger expeditions of conquest to extort even more tribute.  That is, until the reliable source of silver from the mines began to run out.

Just as silver mining output went into decline, and the tribute became harder and more expensive to extract, in 415 BC the Athenians made the disastrous decision to invade Syracuse at an eventual loss of 10,000 hoplites, 30,000 oarsmen, and over 100 triremes.  Thousands of captured Athenians held as prisoners of war were ransomed by the Syracusians at great expense to their families and effectively drained nearly all Attica’s surplus financial resources.  Most poor Athenians, unable to raise a ransom, permanently lost heads of household to enslavement and death in the Syracusian quarries.  Revolts from tribute paying vassals immediately followed and tribute dried up, and in 404 BC these accumulating losses saw Athenian empire and Aegean hegemony ceded to Sparta.  Thus when the silver ran low, the empire was lost as limited resources were concentrated more and more on defending against Attica’s immediate neighbors.  And that is the main point– when a nation in the ancient world could no longer fund wars of empire with physical money, it could no longer prosecute wars of empire and thus some form of peace attempted to descend.  It is as if a law of economics was at work and in a sense, the exhaustion of silver supplies was ancient empire’s built-in self-destruct mechanism.

We also learn from ancient Attica between the victories over Persia, to the rise and loss of empire, to its eventual defeat by Philip II and incorporation into the Hellenic League, that as the wealth of Attica rose and then declined, the reason its citizens fought wars changed.  Although the Greek city states are referred to by historians as democracies, of practicality only Greek men of means could participate in government to the extent they could afford the time required to build influence.  The average Greek man had to work and earn a living and had no time for civics until a tyrant needed overthrow or war threatened from outside aggressors.  What we observe before the Persian Wars is a nation of modest means and substantial freedom where citizens fight for kinfolk, land, and shared history with their alternatives being death, confiscation, and enslavement.  This is the nature of defensive war, embodied in that which the Athenian / Spartan coalition fought to defeat the Persians.  As Attica increased silver production and extracted more tribute via empire, we see a change in the reason for fighting war, with war then assuming a mercenary objective for many of its citizens.  Citizens were now incentivized to fight wars of conquest with high pay when there was no immediate threat from outside aggressors and instead of citizen soldiers defending kinfolk, land, and shared history, citizens became hired rowers and hoplite combatants.  Thus, as war transitioned from defensive to offensive as wealth increased, a citizen’s motivation for participating in war transitioned from patriot at the start of empire, to mercenary by choice at peak empire, to mercenary by necessity after the collapse of empire.

Ancient defensive wars continued until the threat was eliminated, the food supplies or health of the combatants were exhausted, or one side was vanquished.  Ancient mercenary war, on the other hand, generally continued so long as there was ample silver.  It was as if silver could conjure armies and armaments at will until it ran out, and then in that instant these same armies and armaments dissolved away.  For a powerful ancient nation that had not been subject to invasion for some time, the mercenary incentive became the primary reason citizens fought wars, as all wars, absent any outside threat, became wars of conquest.  As Attica’s wealth and influence waned between the end of the Peloponnesian War and its defeat at the hands of Macedon, more and more of its citizens turned to mercenary expeditions commanded by whomever was paying.  Eventually many formerly powerful cities were depleted of its fighting fit men and lay open to conquest from outside aggressors and tyrants within.  Combined with sustained decline in silver production and its resulting decline in foreign influence, after the final conquest at the hands of Macedon we find Attica’s transition complete – nearly all wars were henceforth fought by mercenaries on campaigns unrelated to Attica as the resulting collapse in trade due to depleted silver resources left few other means for young men to earn a living.

When there is total collapse of resources, and then influence, the citizens then become nothing more than mercenaries, and it was these legions that made up the entirety of Alexander’s forces.  But as mercenaries, they fought for pay, in physical money, and maybe for a bit of glory thrown in – but they did not fight for ideals.

Rome’s history initially followed a similar path to that of Attica regarding why its citizens waged war in its early days – immediate enemies necessitated over 450 years of continuous defensive war and civil uprisings to fend off or overthrow foreign rule.  The small state of Latium despite all odds managed to eventually defeat its surrounding aggressors, and when it realized it was a truly formidable fighting force it decided to put an end to outside aggression once and for all.  Thus began a protracted series of conquering wars throughout the Italian peninsula.  But Latium had no silver mines and their system of physical money extraction from the vanquished differed from the Greek system of tribute.  Rome instead integrated its vanquished states and, with the exception of Carthage, granted select families Roman citizenship, contracted many of these families as magistrates to maintain internal order on behalf of Rome, and enacted a system of tax farming on the provincial non-citizens.  It was this system of taxation that played the same role as the silver mines of Attica, and the more territory Rome conquered the more taxes it could collect to embark on further wars of conquest.

Once Roman territorial expansion had engulfed both Iberia and Anatolia, it controlled the only sources of gold and the richest silver mines in the Mediterranean.  From about 200 BC to 230 AD, this gold and silver, together with ever increasing tax collection from its expanded portfolio of conquered and integrated provinces, funded a standing professional army with career soldiers paid in silver.  Rome had entered its period of “endless war”, funded by supplies of gold and silver obtained from mining, conquest, and taxes.  However, the immense size of the Roman standing army – about 450,000 troops under Severus in 211 AD – and the tremendous cost of endless war guaranteed expenses always exceeded income to the imperial treasury.  So starting around 60 AD the Romans embarked on a policy of currency debasement and pay raises for soldiers that triggered severe price inflation for basic goods and plunged much of the populace into poverty but did not slow the pace of endless war.  The inflation suffered by the people financed the continuous prosecution of endless military campaigns as the only wages that increased in step with Roman inflation were those paid to soldiers.  It was empire regardless of cost at this point.  Mutinies, civil wars, border incursions, and insurrections were now added to the expense of wars of conquest and endless war didn’t end until 410 AD when the Visigoth king Alaric sacked a nearly bankrupt Rome.  But by that time the empire’s boundaries and tax base and mine holdings had shrunk so considerably that Rome could not finance a defense against the German invaders, and thus we see again another example of ancient empire’s self-destruct mechanism at work – the process of building empire depletes the resources of the nation, and the depleted resources preclude securing that empire indefinitely.  Thus all ancient wars of conquest were ultimately futile.

Read More @ TheBurningPlatform.com