This question involves looking at the effects of banking, invented by the Sumerians, on ancient economies in general as it involves not only the distribution of wealth but also increased productivity, adding commercial and financial risk.
This practice would also have ensured the importance and greater use of money, as money can multiply, wheat (employed as a currency) could not except through time and hard work. It placed wealth and power in individuals outside of the executive.
One, addition point. Although such transactions encouraged the use of coinage this occurred through time.
Temples at that time served as lenders. Economic Historians should look into this aspect and various sociological and economic implications.
Thanks Sunando. A number have done, but I believe, perhaps like you, that ancient economics has been a much neglected subject. Finlay has long been something of an authority on the subject, but he seems to me to say very little.
There is evidence in Sumerian literature of wheat crops being a currency between different city-states or larger groupings, producing exchanges of resources, fealty, or promises for the future. The building up of substantive or material resources was as much a form of financing as modern stock exchanges.
Michael Hudson (PDF attached) worked on this subject; he founded ISLET, a research network that dealed with ancient Mesopotamia. The first chapters of my e-book (jpg) also deal with monetary and banking learning processes, e.g. in Sumerian city-states. Here, we first find land traded and privatized for monetary payments by legal contracts; however, monetary units (shekel) were fixed to a natural ratio (silver/barley), but not fractional; credit and (high) interest were used as economic tools of growth.
Scientific America: Lipton/Pentland:
A young man wanted to buy see to grow his own crops, so his uncle, a priest, loaned him some silver. He thought that if his nephew failed to repay by the time the merchant needed the silver back, he could fill in the missing amount with personal funds or borrow it from friends. Using a long term contract with a foreign merchant to support a short-term loan to his nephew, the priest doubled the number of commercial transactions by using the same money twice. In other words fractional banking.
Sumerian contracts have always interested me, to the extent they involved investment and borrowing. Debt was a big problem in Sumeria.
Thanks Stephen
Anthropologist David Graeber should be mentioned, in this respect (Debt: The First 5000 Years).
The fractioning banking itemised would have allowed for the creation of greater productivity and therefore increased ancient urban populations. Wealth became an abstract as well as based on visible resources.
Debt certainly counter-intuitively helped the spread of wealth. Which leads me to an essay I wrote years ago-'How money affected Athenian Society'
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