Was the Invention of Finance Responsible for Democracy? – The Atlantic

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Richard Seaford, an expert in Greek literature and the author of the insightful book Money and the Early Greek Mind, advances the proposition that money played an important role in the mental framework of ancient Athenian society. The monetization of Athens was not only important to the emergence of democracy, but was also a factor in the development of Greek philosophy. In Seaford’s view, monetization led to abstract thought. Money could be exchanged for an infinitude of different material things, but the coins themselves did not satisfy basic human needs.

Seaford goes so far as to suggest that the money economy influenced Platonic and Aristotelian notions of the individual. When economic interactions were defined by quantitative measures of potential value, people became more autonomous, less reliant on traditional institutions of social reciprocity, and more reliant on an incentive structure ultimately measured by profit.

Socrates recognized this and did not approve. He was particularly critical of Pericles—the famous fifth-century Athenian statesman who essentially completed the process of democratizing Athens. Pericles increased payment to jurors, further extending their reliance on the public dole and orienting their incentives toward money. In Socrates’s view, this monetization amounted to bribery of the soul. Salaried service corrupted incentives. In his words (or at least in Plato’s) “Pericles has made the Athenians idle, cowardly, talkative, and avaricious, by starting the system of public fees.” The democratic system did not promote personal virtue—at least as Socrates defined it.

A tourist visiting the Acropolis today looks up to the Parthenon, sees its magnificent pediment, and likely thinks of it as a temple. But ancient Athenians also saw the Parthenon as their treasury—their great monetary weapon against invasion. The front door of the Parthenon led to the room with a giant cult statue of Athena—itself gilded in gold that could be peeled off and minted if times got desperate. The back door of the Parthenon led to the treasury. Athena cast a protecting eye over her eponymous city below, but her protection was backed up with financial might. Coinage was not only a brilliant economic invention—it was also a great political one.

This article was adapted from William Goetzmann’s book, Money Changes Everything: How Finance Made Civilization Possible.

Was the Invention of Finance Responsible for Democracy? – The Atlantic}