Money, Currency, and Heterodox Macroeconomics for Archaeology

Many archaeologists do not realize that their commonsense assumptions about what constitutes money naturalize orthodox (neoclassical) economic theory. Rather than the orthodox view of money as primarily a medium of exchange, this paper presents the heterodox claim of money as primarily a unit of account imposed by those with political power. This heterodox understanding casts money as the mechanism at the heart of ancient states' political economies. A brief history of heterodox chartalist macroeconomics is followed by eight starting points from which archaeologists can explore the operation of state money using the material remains of past societies. Ancient Mesoamerica provides a case study that developed independently of better-known monetary histories from ancient Egyptian, Mesopotamian, Greek, Indus, and Chinese civilizations. Monetized state economies date back to at least AD 600 in Mesoamerica and possibly as early as 300 BC. Cacao beans, standard lengths of cotton cloth, and shell and greenstone beads functioned as the currencies of taxation that underwrote political economies across ancient Mexico and Central America. I conclude that similar organizing principles, by which elites in hierarchical pluralities have extracted and deployed surplus production, resulted in the independent invention of money as an accounting system among unrelated ancient societies the world over. My primary argument is that money-understood as a politically controlled system of accounting-is largely missing from our analysis of ancient complex societies.