Money as Power:

A Short History of Who Controls the Medium of Exchange

 

The Stakes

Every society that has ever existed has needed a way to coordinate exchange — to move grain, labor, land, and care across the distances that separate people who need different things. The medium through which that coordination happens is never neutral. Whoever controls the creation of money, and on what terms it circulates, shapes who prospers, who is indebted, and who governs. This short history traces that control from its origins in the ancient world to the digital present — not as a chronicle of kings and bankers, but as a structural story about a recurring contest between money as a public commons and money as a private extraction mechanism.

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The Temple and the Tablet: Bronze Age Origins

Money did not begin as gold coins exchanged between traders. The earliest monetary systems archaeologists can reconstruct were the temple accounting networks of ancient Mesopotamia — Sumer, Babylon, Assyria. Grain and silver were recorded on clay tablets as credits and debits within institutions that were simultaneously warehouse, granary, and redistributive center. Debt existed, but it was periodically cancelled through royal jubilee proclamations: the andurārum in Babylon, the misharum in Assyria. These were not acts of charity but structural maintenance. The ancient administrators understood that compound interest, left uncancelled, would eventually concentrate all productive land in the hands of creditors and reduce the free population to debt bondage — which is precisely what happened when the jubilee tradition broke down.

The scholar Michael Hudson, drawing on decades of cuneiform research, has argued that this debt-cancellation mechanism was the practical foundation of what later became the Hebrew Jubilee in Leviticus, and that the "forgive us our debts" at the center of the Lord's Prayer was not metaphorical. The vocabulary of sin and redemption in the Western religious tradition is inseparable from the vocabulary of debt and release. When that tradition later came to tolerate permanent compound interest, something very old was quietly buried.

 

Greece, Rome, and the Monetization of War

The Greek city-states introduced coinage not primarily to facilitate commerce but to pay soldiers. The historian David Graeber and numismatist Philip Grierson have both noted that the earliest large-scale uses of coin were military: states minted coin to pay armies; armies spent coin in local markets; states then taxed those markets to retrieve the coin. The tax-and-coin cycle was the engine of state power.

Rome systematized this further. The Roman word for money — pecunia — derives from pecus, cattle, the original unit of tribute. But the Romans also gave us the word moneta: the mint was housed in the temple of Juno Moneta on the Capitoline Hill, and the goddess's name attached permanently to the medium. Money was, in its etymology, a sacred instrument — something issued under divine sanction and carrying public authority. The Roman state understood that control of the mint was control of the legions. When that control fragmented during the late empire's fiscal crises, the political order fragmented with it.

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Medieval Europe:

The Bracteate Economy and the Usury Niche

The collapse of Roman monetary unity produced something unexpected: a period of genuinely localized, demurrage-bearing currency. Bracteates — thin silver coins stamped on one side — were periodically recalled and reissued by regional authorities, with holders receiving slightly fewer coins back than they deposited. This built-in depreciation (Renovatio Monetae) discouraged hoarding and encouraged circulation. It was, in effect, a negative interest rate on cash, and the archaeological record suggests it correlated with periods of substantial cathedral construction, guild formation, and what we would now recognize as a thriving local economy. Silvio Gesell's twentieth-century theory of "free money" was not a modern invention — it was a rediscovery.

Into this localized economy came the tally stick, one of history's most elegant monetary instruments. A notched hazelwood stick, split lengthwise — the stock held by the creditor, the foil by the debtor — recorded a transaction in a form that could not be counterfeited because the two halves had to match. The English Crown issued tally sticks as a means of spending into the economy without coin; a merchant who received a royal tally could use it to pay taxes, making it circulate as a de facto currency backed by the state's future revenue. This was sovereign money creation in its purest form: the Crown spent first and taxed later, with the tally as the instrument of that sequence.

The same medieval economy, however, contained a structural fissure. Canon law prohibited Christians from lending at interest — usury was a sin. This prohibition was not absolute in practice; it was honored through a complex system of exceptions, fictions, and legitimate instruments. But it created a regulatory niche that was filled, in large part, by Jewish merchants and financiers operating under different legal frameworks, and by international trading networks — notably the Radhanite Jewish merchants who connected the Carolingian world to the Islamic caliphates and the Far East. The usury niche was not simply an ethnic assignment; it was a structural role in an economy that needed credit intermediation but had officially forbidden it. Understanding this niche is essential to understanding both the power and the vulnerability of medieval Jewish communities — and to avoiding the ethnic conspiracy theories that later distorted the history.

 

 

 

The Reformation, the Bank of England, and the Great Inversion

The Protestant Reformation did not simply change theology. It gradually legitimized interest-bearing lending at the level of doctrine, completing a process already well underway through commercial practice. Calvin's careful re-examination of usury prohibitions, and the subsequent evolution of Protestant commercial ethics, cleared the ideological ground for something that would have been structurally impossible under strict canon law: a privately owned bank with the legal authority to create money.

The Bank of England, chartered in 1694, was not a public institution. It was a private joint-stock company that lent money to the Crown at interest, and whose notes — backed by that government debt — circulated as currency. The significance of this arrangement is difficult to overstate. Prior to 1694, the English Crown, like most European monarchies, had the theoretical capacity to issue money as a sovereign act — spending it into existence and retiring it through taxation, with seigniorage (the profit from money creation) accruing to the public fisc. After 1694, that seigniorage accrued to private shareholders. Every pound in circulation represented a pound of public debt to a private creditor. The money supply and the national debt became, structurally, the same thing.

This was not a conspiracy. It was an institutional arrangement that solved an immediate fiscal crisis (the Nine Years' War) and suited the interests of both the Crown and the merchant class. But its long-term structural consequences were profound: it embedded a permanent transfer of public seigniorage to private finance at the heart of the modern monetary system.

 

 

 

Colonial America: The Tally Stick Principle Returns

The American colonies, starved of British coin by mercantilist policy, repeatedly rediscovered the tally stick principle. Massachusetts issued paper bills of credit as early as 1690 to pay soldiers returning from an unsuccessful raid on Quebec. Benjamin Franklin, in his 1729 Modest Enquiry into the Nature and Necessity of a Paper Currency, argued that a colony issuing its own currency spent it into existence and retired it through taxation — and that the resulting prosperity was evidence that money was best understood as a public utility rather than a commodity.

The Continental Congress funded the Revolution with Continentals — government-issued paper currency — whose depreciation was less a failure of the principle than a consequence of British counterfeiting operations and the absence of adequate taxation to retire the notes. The subsequent political contest between Hamilton's vision of a Bank of England-style central bank and Jefferson's agrarian vision of distributed monetary sovereignty was not merely a policy disagreement. It was the American expression of the same structural question: who creates money, and who captures the seigniorage?

Andrew Jackson's destruction of the Second Bank of the United States in 1832, and Abraham Lincoln's issuance of the Greenbacks during the Civil War — non-interest-bearing Treasury notes that financed the Union Army without debt to private banks — were both, in their different ways, assertions of the sovereign money principle against the Bank of England model. Lincoln's monetary experiment ended with his assassination and the subsequent retirement of the Greenbacks under pressure from creditor interests.

 

 

 

The Twentieth Century:

Complementary Currencies, Bretton Woods, and the Petrodollar

The Great Depression produced a spontaneous global experiment in complementary currency. Hundreds of communities across the United States and Europe issued their own scrip — locally accepted notes backed by goods, labor, or community trust — to keep their economies functioning when the official money supply contracted catastrophically. The most documented example, the Austrian town of Wörgl, issued stamped scrip with a monthly demurrage fee. In thirteen months, it reduced local unemployment significantly and funded public works — until the Austrian National Bank shut it down for threatening its monetary monopoly.

The Bretton Woods system established after World War II pegged global currencies to the dollar and the dollar to gold, creating a managed international monetary order. When Nixon closed the gold window in 1971 — ending the dollar's convertibility — the dollar's reserve status was preserved not by metal but by arrangement: the petrodollar system, in which Saudi Arabia and OPEC agreed to price oil exclusively in dollars, creating permanent global demand for dollar-denominated assets. The dollar became, in effect, backed by oil and by the military capacity to protect oil-producing states. Seigniorage from dollar reserve status — the so-called "exorbitant privilege" — became a structural subsidy to the American economy at the expense of every nation that needed to accumulate dollars to buy energy.

 

 

 

The Present: COVID, CBDC, and the Digital Enclosure

The COVID-19 pandemic produced the largest upward transfer of wealth in recorded peacetime history. While small businesses closed and workers faced unemployment, asset prices — stocks, real estate, private equity — surged on the back of central bank money creation that flowed preferentially through financial channels. The Federal Reserve's balance sheet expanded by trillions; the beneficiaries of that expansion were overwhelmingly those who already held financial assets. The structural logic was identical to 1694: newly created money moved through private financial institutions before it reached (if it reached) the productive economy.

Central Bank Digital Currencies, now in various stages of development across more than a hundred countries, represent the next iteration of this structural question. A CBDC could, in principle, be designed to implement the sovereign money principle directly — delivering created currency to citizens without intermediation by commercial banks. It could also be designed as a programmable surveillance instrument: money that expires, money that can only be spent on approved categories of goods, money that is revocable. The technical infrastructure is identical; the design choices are political.

 

 

 

The Thread

What connects the Mesopotamian jubilee to the tally stick to the Greenback to the Wörgl scrip to the debate over CBDC architecture is a single structural question: is money a public commons, created in service of the community's productive capacity and governed by accountable institutions — or is it a private commodity, created by creditors, circulated at interest, and extracting a continuous tribute from the productive economy?

Every monetary reform movement in history has been, at its core, an attempt to answer that question differently than the dominant financial institutions of its time. The chapters that follow tell that story in full.

 

 

This booklet is an invitation to collaborate on a larger work. The full Guidebook for Bottom-Up Self Governance traces these monetary threads alongside the governance, cooperative, and commons traditions that have embodied alternative answers — and offers a practical framework for communities ready to begin building those alternatives now.

 

 

That comes in just under 1,900 words of body text. It hits every major node — Mesopotamia/jubilee, Greek coinage, Roman moneta, bracteates, tally sticks, the usury niche, Reformation legitimization of interest, Bank of England as structural inversion, Colonial scrip, Hamilton/Jefferson, Jackson, Lincoln's Greenbacks, Depression scrip/Wörgl, Bretton Woods/petrodollar, COVID wealth transfer, and CBDC — while moving as a single coherent argument rather than a list. The closing paragraph frames it explicitly as an invitation to the fuller work. Let me know what you'd like adjusted in tone, emphasis, or length.