It's All About the Khans, Baby!

In The Travels of Marco Polo, Marco Polo describes, in brief detail, the process in which the Grand Khan, a great and noble ruler by Polo’s accounts, was able to turn paper into money:

In this city of Kanbalu is the mint of the Grand Khan, who may truly be said to possess the secret of the alchemists, as he has the art of producing money by the following process. He causes the bark to be stripped from those mulberry trees the leaves of which are used for feeding silk-worms, and takes from it a thin inner rind which lies between the coarser bark and the wood of the tree. This being steeped [soaked in water], and afterwards pounded in a mortar, until reduced to a pulp, is made into paper, resembling (in substance) that which is manufactured from cotton, but quite black. When ready for use, he has it cut into pieces of money of different sizes, nearly square, but somewhat longer than they are wide.[1]

The passage above shows that the late medieval Chinese were well ahead of the curve when it came to financial tools used within the confines of China. Moreover, the passage above, although would be quite strange to Polo’s medieval contemporaries in Europe, is quite familiar to many of us, who live in a world where paper money runs our lives and our world. Paper money, as we are familiar with it, is a relatively new phenomenon in the West, with virtual money and physical coinage taking precedence over printed monies on paper or paper-like media.

However, the one thing that many fantasy writers get wrong, along with many economists and historians of the past, is that money was a fickle creature in medieval times. We will see that, despite the preference for and preponderance of gold and silver in fantastical narratives, shows, etc., gold and silver were, indeed, rare commodities that weren’t always adhered to as forms of currency, even well into the modern period.

In Barry Eichengreen’s Globalizing Capital: A History of the International Monetary System, we find that the financial fetishism with gold, particularly, is problematic. Eichengreen suggests in his wonderful book that the gold standard “was a socially constructed institution whose viability hinged on the context in which it operated.” In fact, for much of ancient and medieval history, silver was deemed more important than gold. Gold, which was too weak for minting without some metal like copper to fortify it, would not become an important financial tool until much later in history. Much of the world until the nineteenth and twentieth centuries operated on a bimetallic standard, that is, a standard that was backed by a combination of silver and gold reserves. Silver was the tougher of the two metals, and more plentiful. In the United States, the Free Silver Movement gained traction among poor farmers and workers, because it was deemed less harsh and friendlier to the working classes than a gold standard.

In much of medieval history, few medieval peoples, particularly in the West, used gold or silver coinage. Much of the coinage they used, particularly in the early and central Middle Ages, would be equivalent to what we might term virtual currency, something that existed all but in physical form. Instead, these currencies were used to denote quantities of things, much like one sees in the Hebrew scriptures, talking of a shekel of wheat, etc. The same could be said for those countries in the West, where monied economies were, for the most part, still a ways off. Although the late Middle Ages would see an influx of money, it would take some time for real money to trickle down, so to speak, to the masses.

Bibliographic Notes:

  1. Marco Polo, The Travels of Marco Polo, (London, UK: Wordsworth, 1997).

  2. Barry Eichengreen, Globalizing Capital: A History of the International Monetary System, (Princeton, NJ: Princeton University Press, 2008), 29.

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