Money & Finance › What money is & money theory › The barter myth vs. credit origins of money
Mesopotamian temple loans and silver ledgers
c. 3000–1750 BC· Crisis or event
Fact, law or dataA rule, statute, definition or measured number.
Ancient Mesopotamian temples and palaces recorded loans and debts in weights of silver and barley on clay tablets.
See it on the Money & Finance map →How it works
In Sumer and Babylon (today's Iraq), temples and palaces ran large estates and kept accounts on clay tablets. Debts were counted in shekels of silver (about 8 grams) or measures of barley, but the silver mostly stayed in the vaults; farmers often paid in barley at harvest. Loans carried interest, and kings periodically cancelled farmers' debts. Hammurabi's code (about 1754 BC) capped rates at 20% a year on silver and 33⅓% on barley.
Why it matters
It suggests money began as accounting: a unit for keeping score of debts, long before coins. Interest, and debt crises, appear in some of the oldest written records.
Facts, rules and data
Hundreds of thousands of cuneiform tablets survive, many of them business records. The Code of Hammurabi stele is in the Louvre. Assyriologists have reconstructed the system from these records.
Debates and risks
How widely silver changed hands in daily trade, versus just serving as a unit for accounts, is debated among Assyriologists.
Connections (2)
▸Mesopotamian temple loans and silver ledgers are key evidence in The barter myth vs. credit origins of moneyMainstream view
The connection
Mesopotamian tablets show temple and palace accounts in silver and barley units long before coins, with debts recorded and settled later. That is credit, not barter. Critics of Adam Smith's story use these records as their main historical case.
When and why
Sumer and Babylonia, roughly 3000–1750 BC; used by David Graeber (2011), economist Michael Hudson and other scholars.
How solid is the link?
The tablets are real and abundant; the dispute is over how to interpret them, not over the evidence itself.
Debates and risks
Whether temple accounts tell us how ordinary people traded in markets, where barter or silver payment may have been common, is unresolved.
▸Mesopotamian temple loans and silver ledgers already charged Interest: the rent paid for using moneyFact, law or data
The connection
Mesopotamian lenders charged interest on silver and barley loans, and by Hammurabi's time (about 1754 BC) law capped the rates at 20% and 33⅓%. Interest appears in some of the oldest written records, and so do debt crises: kings periodically decreed debt cancellations.
When and why
Sumer by about 2400 BC, then Babylon under Hammurabi; records from cities such as Lagash, Ur and Nippur.
How we know
Loan contracts on cuneiform tablets, and the Code of Hammurabi, which sets maximum rates in its laws.
Debates and risks
How the custom of interest began, and why rates settled at 20% (a neat fraction in their base-60 math), are debated.