Home > Uncategorized > The real costs of making money 2. Where did the silver used to buy Josef come from?

The real costs of making money 2. Where did the silver used to buy Josef come from?

Many economists still seem to believe that money is a kind of ’emergent market phenomenon’: barter gradually gave way to monetary trade, as some of the stuff which was bartered slowly evolved into money, which enabled a more efficient kind of trade.

But that’s not what happened.

Before the advent of money, barter was a side-show at best and the history of money is, in many ways, intimately and crucially intertwined with the history of states. Which becomes clear when you ask the questions: ‘where did the money come from?’ and ‘what were the production costs of this money’? The story of Josef is a good example. According to the bible he was sold by his brothers for 20 shekels of silver, probably a kind of proto-coins (not proto-money, virtual money already existed at this stage).

The text of this part of the story

So when the Midianite merchants came by, his brothers pulled Joseph up out of the cistern and sold him for twenty shekels of silver to the Ishmaelites, who took him to Egypt.’

At this time the ‘shekel’ still was an official weight which related to a fixed amount of barley (i.e. a grain standard, see p. 10 of this study by Jon Bosak!) and even ‘a shekel of silver’ was not yet a real coin.

Picture 1. Complete metrological table for capacity or volume system ranging from 1 shekel of barley (1/60 litre) to 2.603 Gur (129.600.000 litres)


It would take another 1.000 years before a smart king started to make coins in this area which already bore his sign, a rising sun. And the sting in the tail of the Josef story: it seems that the regular price for a slave in this period was thirty shekel of silver… Josef was sold more or less as a piece of trash! However, back to the economics: where did this silver come from? Who mined it? At which costs?

According to this site, it came from, among other regions, the Sinai and the deserts of Egypt, it was mined by convicted criminals and prisoners of war and mining happened at appalling human costs. And oh, the Egyptian state organized this:

Even early on, but less frequently than in later times, the miners were according to Ptahhotep seemingly slaves –

Good words are more difficult to find than the emerald, for it is by slaves that that is discovered among the rocks of pegmatite.

From the Precepts of Ptah-hotep, 5th dynasty

– convicted criminals and prisoners of war according to Diodorus Siculus, as few people chose to work under the often appalling conditions which were prevalent in the mining regions of Sinai and the deserts of Egypt. Output quota were set by officials, who, like the treasurer of the god Amenemhet, were sent by the government to Serabit el Khadim:

I came to the mine of Ka (seemingly the supervisor of the mine); I exacted the impost, I attended to the levying of the impost of malachite, being […] for [every] 5 men every day correctly [… … …].

  1. Peter T
    February 5, 2014 at 5:50 am


    This confuses money and coins. Money (a standard unit of account, used to denote debts or assess value) predates coins by millenia, and coins only ever comprised a small fraction of the money in daily use. Most ancient money was in the form of marks on clay tablets or notes on pieces of papyrus, just as it is today (computers replacing clay or papyrus).

    A Roman who bought an estate in Italy qualifying him for the equestrian order (one million sesterces) did not haul a cartload of silver around. He arranged for his banker to transfer a sum from his account to that of the vendor, again just as we would today. Ditto mercantile debts. Coins were for spot transactions, untrusted persons and ceremonial gifts (donatives). The real cost of making money was and is in establishing and maintaining the trust needed to support it.

    BTW, mining was slaves’ work in classical times (and in the Americas). It was a well-paid craft in medieval times. Why?

    • merijnknibbe
      February 5, 2014 at 8:10 am

      Totally agree, I tried to make this clear by stating that the silver was probably a kind of proto-coin, while ‘virtual money already existed at this stage’.

      About the miners in medieval times: while writing these posts I started wondering too.

      Aside – I visited a medieval copper mine in the Vosges (France) in the summer of 2012. These miners really must have been a kind of dwarves, living far away in the woods, considering the dimensions of the tunnels and the location of the mine.

  2. Peter T
    February 6, 2014 at 11:25 pm

    Okay. But to talk about “virtual money” is to imply that coin is “real money” (which takes you down the Austrian/gold-bug path). My point is that money is always virtual – coins are only the visible tokens of a small fraction of the real virtual world of money: the general notion of that part of our resources that is traded/owed/enumerated.

    People were smaller then, but even so mines were cramped. Why move more rock than you have to?

  3. merijnknibbe
    February 7, 2014 at 7:39 am

    Agree, ‘virtual’ money is not the right word, here.

    About those mines: deeper inside the mountain the tunnels became (slihgtly) larger. The guide told us that that was because the minders started to use gun powder to blast rock. Gun powder as a means to improve medieval working circumstances – a new idea for me!

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