Money is usually presented in economics textbooks as an inert substance that emerged naturally as a means of exchange. One Canadian textbook, for example, informs us that: ‘If there were no money, goods would have to be exchanged by barter … The use of money as a medium of exchange solves this problem … All sorts of commodities have been used as money at one time or another, but gold and silver proved to have great advantages … The invention of coinage eliminated the need to weigh the metal at each transaction, but it created an important role for an authority, usually a king or queen, who made the coins and affixed his or her seal, guaranteeing the amount of precious metal that the coin contained.’9 Similar accounts have been provided throughout history: by Paul Samuelson in his Economics; by nineteenth-century neoclassical economists Carl Menger and William Stanley Jevons; by Adam Smith in the eighteenth century; and so on. In fact, the story can be traced all the way back to Aristotle, who wrote in Politics that the ‘more complex form of exchange [money] grew, as might have been inferred, out of the simpler [barter] … Property of Icon Books - do not print MONEY, MAGIC, AND HOW TO DISMANTLE A FINANCIAL BOMB 114 the various necessaries of life are not easily carried about, and hence men agreed to employ in their dealings with each other something which was intrinsically useful and easily applicable to the purposes of life, for example, iron, silver, and the like. Of this the value was at first measured simply by size and weight, but in process of time they put a stamp upon it, to save the trouble of weighing and to mark the value.’ While the story has remained remarkably constant over the centuries, it is not based on empirical evidence. In fact, as anthropologists have long pointed out, economies based purely on barter don’t appear to ever have existed.10 Instead, money has its roots in a virtual credit system created 5,000 years ago in ancient Mesopotamia, where debts were recorded on clay cuneiforms. Amounts were specified in terms of shekels, which referred to a weight of silver; however, the silver itself did not usually change hands. The first coins date to the seventh century BC, in the nearby kingdom of Lydia, and the idea quickly spread, first to the Greek cities of coastal Asia Minor, and from there to the mainland and surrounding islands. By the time of Pythagoras in the sixth century BC, most Greek city-states were producing their own coins as a sign of their independence. Since then, power over the money supply, and the right to dictate what is legal tender, have been defining attributes of statehood. The ancient Romans, for example, projected power over distant colonies through the images of emperors that adorned their coins. Indeed, the main motivation for the spread of coin money appears to have had less to do with the needs of the market – which historian Michael Crawford calls an ‘accidental consequence of the coinage’ – than with those of the military.11 Money had found its killer app, and it was war. Property of Icon Books - do not print 115 Atomic money Coinage was introduced at a time when the largest expense of Greek rulers was the mobilisation of huge armies. Coins served as a device for payment, but also as a tool to both motivate the troops and control the general public. Soldiers and mercenaries were paid using metal that was mined or plundered; they spent the money on things like food and supplies; and the state then demanded some of the coins back as taxes. The fact that the general public had to get their hands on money in order to pay taxes, for example by feeding or housing soldiers, solved the logistical problem of how to maintain the army. The system was perfected by Aristotle’s former student, Alexander the Great.