Urukagina Economics

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Man Bites Man! Urukagina Economics?

“the rich must use silver when purchasing from the poor” Code of Urukagina c. 2380 BCE
"If a man knocks out the eye of another man, he shall weigh out one-half a mina of silver." Code of Ur-Nammu, c. 2100 BCE
“... you shall value it according to the amount of seed-corn it can carry, at the rate of fifty shekels of silver
for a homer of barley seed. If he values it from the year of jubilee ...” Leviticus 27:16-21, c. 500 BCE

"I will trade you this gold ring for that chicken" – as spoken by diasporas’ victims, in all epochs
“hearken and beware: hold firm to your bond! What you are, you are only by contracts: limited and well
defined” – Richard Wagner’s, Fasolt, Das Rheingold Act 2
“Those, who make the four elements the cause of all which is, are greatly led away by their own
arguments. The causes of many happenings belong elsewhere.” – Jean Fernel, Dialog, 1541

Economic theory seems to dismiss the earliest history of informal money we invoke for resolving
our trades. This has misled discussion for more than two centuries. It is small wonder the
challenge of Prof. Ottmar Issing in March 2011 remains, “a Nobel for anyone who provides a
proper theoretical treatment that combines credit and money, financial quantities and financial
prices” speaking from within this blind ignoring informal money is not proper basis. We must
examine what is excluded. We live in a ‘pragmatic’ world built on informal money and credit.
John Nash famously modelled the mathematics of reaching trade agreement for game theory
application in economics. He was awarded 1994 Nobel Prize. His model1 started from admitting
for any kind of money ‘magic’, pragmatic or formal. Nash equilibrium model of trading between
‘Bill’ and ‘Jack’ seems closer to factual circumstance we are all familiar with. Jack makes his
trade for what he values as less than what he determines is better value in what Bill offers in
trade, in-kind. We all understand that motivation, intending better for ourselves through trade.
Conventional economic theory becomes abstruse, using conjecture to support projections as fact.
Dismissal of such pragmatic origins, as Menger2 does in one short sentence, exposing bias by
dismissing spice and shells with all informal market media of exchange not worth understanding,
he maintains metal based specie is worthy alone. For Mengerians ever since formal money is
discussed, somehow informal money is not worthy, not ‘peculiarly’ suited as metal based specie.
Nevertheless it is clear that the choice of the precious metals by law and convention, even if made
in consequence of their peculiar adaptability for monetary purposes, presupposes the pragmatic
origin of money, and selection of those metals, and that presupposition is unhistorical.

Markets make do with what is ready to their purpose, pragmatic money. Clearly Menger knew of
the many commodities put to pragmatic purpose by trade but did consciously chose excluding
these or any informal money in discussion or theory, though he admits this is unhistorical. Metal
1
2

"The Bargaining Problem", John F. Nash, Econometrica (18): 155–62, 1950
“On the Origins of Money”, Carl Menger, Economic Journal, volume 2,(1892) p. 239-55, translated by C.A. Foley

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in standardized weights were known (likely due practical size of ingots cast from crucibles
scaled to fit manageable fires as craft smelting developed) such as pre-800 BC Greek iron oboli,
metals in a uncoined state serving as the medium of exchange, and even certain other
commodities, cattle, skins, cubes of tea, slabs of salt, cowrie-shells, etc.; still we are confronted
by this phenomenon, still we have to explain why it is that the economic man is ready to accept a
certain kind of commodity, even if he does not need it,

Collaboration and cohesion depend on agreement among the participants that the parts of
operation can effect and realize the action being promoted by their efforts, whether that is in
getting our mastodon, bison or trade done for dinner. We use what is at hand, inventing what is
needed to enable the process that our self-interest can be served. If one does not need it why does
one accept it trade? We know someone who can accept it in trade, maybe in a better deal.
Because we behave socially, acting in cohesion, just as we today use informal money in all its
originations in trade, from repurchase bonds to re-insurance, or in off-balance sheet trades. That
is most important to real economies participants still today in their effort to avoid the premium
rate at lender of last resort, such as LIBOR sets. We expect that setting is altruist, fair to all
though the selfish may conspire so we react accordingly with outrage at those Artful Dodgers.
Markets invoked such ready ‘pragmatic’ mediums to exchange as informal money, long before
coin and paper specie, accordingly showing the standard history and meaning of money short,
merely 'theoretical' led away by their own arguments, as Jean Fernel3 might have censured.
Liquidity is the virtue sought by market participants. Enabling conversion from one utility to
another is the form of trade, it is conversing in liquidity. A value dense commodity metal gives
market advantage over bulky commodities subject to spoil. This advantage the Code of
Urukagina recognized could benefit the poor, converting surplus perishables to more durable and
readily exchanged medium, capable of paying forward, commuting the value.
Surely as Wittgenstein argued one cannot speak as factual that which one does not know.
However as shown by fragmentary archaeological facts known over two centuries ago, current
with debate of gold standard banking regime and emergent corporate invocation. More
importantly this short-changed and misdirected ‘story’ needs airing to understand the preference,
making coin as a priori money. Market participants had long determined otherwise and still
continue using the credit alternative to formal money specie within and without economic
speculation is fact. Menger’s contrary exclusion prefaces discussion still today4, as the basis of a
truncated history we all receive. Mengerians made ‘stick’ the town as the consequence of coin
leading to specialised producers, as town-barter-money-credit paradigm. Truly that is entirely in
the face of denying our biblical ethos and archaeological facts. Cuneiform wrote a credit system.
3

Nobel in Physics 1932 prize winner Sir Charles Sherrington reviews Fernel in his, “Man on Nature”, Gifford Lectures, 1937.
”On the origin of specie: Theories on where money comes from say something about where the dollar and euro will go”, Free
exchange, The Economist, http://www.economist.com/node/21560554 It makes interesting errors in drawing from history, as
editorial board reviewed copy that would appear to be based in conventional received wisdom.
4

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Urukagina was made king by popular consent following his leading popular revolt against cruel
exploitation by the palace. Possibly the earliest case of some
form of democracy, but the neighbouring palace tyrants
brought a violent end in plunder. Further palace and plunder
tumult of self-anointed kings at war ensued ultimately
leading to Sargon II the Akkadian creating the first known
Sumerian empire spread over the Middle East. Of course this
story is familiar to us as the biblical time when tired of these
conflicts the Semite Abram and family left neighbouring city
of Ur of the Chaldees seeking a peace promised in Palestine.
The Code of Urukagina was written 2380 BC near two millennia before the invention of coinage
by the Greek palace economies of plunder. This code’s fragmentary surviving evidence
documents the then already current use of silver as medium of
exchange put to advantage in trade. Presaging Athens Pericles by
two millennia Urukagina came to power in Lagash as the leader
of a peasants' revolt against palace tyrants. He promulgated so
many reforms in the interest of the oppressed common people
that he has been called the first social reformer in history. He
“cleared and cancelled obligations for those indentured families,
citizens of Lagash living as debtors because of grain taxes,
barley payments, theft or murder.” He saw silver useful medium
for trade ensuring silver remained available in circulation and
securing its advantage to the poor producer. Neighbouring states combined under Lugal, of
Umma to end both Urukagina and institution of laws not in tyrants’ favour. His demise at
Lugal’s hands became a peoples lament recorded in surviving praise poetry. Certainly freebooting could have been Lugal’s intent in plundering Lagash. Such continued as he was then
quickly dispatched by his ally Sargon II of Akkad intent on building the earliest known Sumerian
empire. Abram with his father and family left Ur to find some promised peace for them in
Palestine where he had previously saved his nephew Lot in these palace wars.
This article-caption involves transactions that did not involve coinage or formal money. There is
no doubt these captions are all citing rules established by legal code to govern market
transactions. Written laws on credit and trade were important convention for social peace that
personal energies can thrive to benefit. There is present our inherent need for enforceable social
convention that disputes are resolved avoiding potential for needless violence. Rule of law was
always seen as socially important (though the market for eye-loss is admittedly perverse, even in
the context of modern organ transplant versus donation) though cruel consequences may have
suited offences in rough times, good rhetoric might avoid such penalty.
Doubtlessly market trading was a mark of urbanization, but not causal. Trade came as a new
distinction for the success of our species beyond having collaborated and cohesively acted to
obtain bison or mastodon for our mutually successful dinners. The archaeological fact finding
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transiting some 8,000 years earlier in Late Neolithic eras as with Göbekli Tepe excavation in
Kurdish Turkey, ongoing yet for years. But we must note it is urban activity long preceding the
Chalcolithic era from which we have much to comprehend by not excluding as Menger. Such
excavations confirm discovery of metals extraction establishing the Chalcolithic age did not
directly lead to specie, invented nearly 3,000 years later than even Ice-man Ӧtzi. Metals were
used as beads, craft commodity among many in trade
whose value was first for ostentation in creating cult art
or jewellery much as shells were used for beadwork and
became pragmatic commodity money found in use for
some 30,000 years. Metals provided high density value in
comparison to less stable bulky potentially ‘stale-dated’
goods. Trade in kind was the usual pragmatic vehicle for collecting taxes into Roman and
medieval rulers or diocese, while metals retained their value for long periods, if not indefinitely,
given propensity for adulteration to debase value as ruler’s mints became ever more practised.
Metals’ market value as beads extend from their attraction as means to creating distinctive
personal decoration as fashion statements such as this 2600 BC headdress of Puabi of Ur worn to
confirm social status of her wealth and position. Copper was found
useful much later in creating status axes and knives, but silver and gold
as commodities found derived from smelting copper bearing ore were
all prized for use in the creation of jewellery. Practical clay pots were
long in use as cooking and storage vessels and then for smelting.
Antler, bone and ivory were useful for tools but more so for cult(ural)
sign and figurines. Lapis lazuli, carnelian, nephrite jade and turquoise
all found in burial goods had become high-valued trade commodities as
soon as incorporated into jewellery. Until a gemstone could be cut for
faceting and polished it had little commodity value, indistinguishable
from common quartzites readily and widely found in so many colours.
Marbles and alabasters were ready material more easily worked than basalt and granites for early
sculpting. Amber and other resinous tree pitches and gums like Frankincense and Myrrh, were
highly prized trade goods as aromatics medicinal and or useful pitch tar for securing stone points
on arrow and spear shafts from Palaeolithic times. Pearls were not of early practical use except
as lustrous fetish object until means for ostentatious display when securely clasped by metals or
until wire drilling later evolved to safely allow their being strung to adorn little black dresses, or
dissolved in champagne at parties, as Veblen alludes some will do.
Art has always been the focus of high value-added production, as artists, poets, craftsmen, movie
producers, auction houses and art galleries bring to market still today. Demand for art remains
flexible compared to our need for food and shelter. The materials for art manufacture have
always been in demand beyond our animal necessity. It is their intellectual and social role
compelling their price. These artistic outputs are Giffen Goods typically fashion driven which is
all ethos. However as means to substitute value of in-kind trade product for taxation the minting
of coin and a formal rate of exchange became a useful device written into law, as price and wage
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control regimes are benefit to receiver of taxes, less the trader and far less the producer. Small
wonder medieval market traders invoked their own pieds-de-poudre courts of their peers so trade
dispute were not ill-understood and misconstrued by self-service of baron court and bishop curia
lawyers. Bankers were often burned as traitor, usurer or heretic and their estates confiscated and
apportioned as spoil conveniently suiting the victors. Chaucer assures us bishops’ artful use of
vif-gage contracts on tithe coin hoard had made many lands forfeit of debtor kings and barons.
The irony of gold standard advocacy coming out of the confus(ed)ing monetarist right is its
failure to grasp distinct feature of gold and silver specie has been its use to frustrate market
functioning freely and fairly for benefit to market users. These economists have indulged in
political capital from a mislead history. Precious metal specie absorbs value created in markets
sequestering those absorbed values out of trade, by that small degree if not larger, aberrating
market fundamentals. Gold might only buy a chicken some days but as specie is here to stay.
The Carl Menger context of money found spoon-fed to the young is a pudding of dis-informed
economic theory-history. It is false premise,”the monetisation of an economy starts when
agricultural communities move away from subsistence farming and start to specialise.5” Special
art skills were first, long before farming. The record found in archeology prior and concurrent
with Menger’s writing tells that very different story, one glossed over, as economists continue to
date. The Economist editorial board piece repeats blithely, “portable, durable (fruit and vegetables
are out) and divisible into smaller pieces is needed. Menger called this property “saleableness”. Spices
and shells are highly saleable, explaining their use as money. Government plays no role here. The origin
of money is a market-led response to barter costs, in which the best money is that which minimises the
costs of trade.” Monetisation begins in "ustensiles monnais" social exchange in trade goods for

making art and jewellery long before agriculture or towns evolved, as we have long been aware.
Informal ‘shell’ money had long preceded formal state issued specie by some 30,000 years and
continued in use even decades past Menger as just one type. More interesting is the later role of
writing private ‘script’ money such as the cuneiform and papyri, preceding coinage in a history
extending to derivatives and repurchase agreements as media of exchange today.
Markets never created metal specie but were happy to use metal specie, especially when armed
government regimes imposed their minted coin by law, to ensure extracting ‘sales’ taxation for
their weal by burdening trade of the real economy, as, “governments impose taxes payable only in
money, creating a demand for money that means it will be widely accepted as payment for goods. The
state forces the economy away from barter” as claimed is just “specious” consequence of Cartalist

formal money the state requires. Their article is concerned with whether American dollars are
suspect as reserve currency by either an inflation vulnerable Yuan or an improper backed Euro.
Markets have always made credit alternative to barter constraints. The answer is the market will
move where it finds most utile currency for gaining its desired trades. Risk of devalue or
potential for gain varies, remaining the holder’s of any specie money in markets.
5

Ibid, Economist

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In Say's view, a rational businessman will never hoard money, "for the value of money is also
perishable." He rightly avers in favour of liquidity, so long as there is no shortage of profitable
means to invest capital. Consumer demand drives all economies. Inherently the work of the
entrepreneurs trading money is as means to benefit from trading. The faster one can move trades
to build equity then the increase in medium is obtained from one market trade (where utility is
discounted, by ‘Jack’) to another where the item is not discounted but inflated by varying
demand (of ‘Bill’ to use Nash’s model participants by name). The markets will factor inflation
where known, or gain by currency suiting the locale in which transaction needs to be made.
Liquidity is sought by market traders. Enabling conversion from one utility to another is the form
of conversing in liquidity for gain. The attempt to ring-fence value through implications of a gold
standard, diminishes liquidity, freezes the utility embedded in trade decisions, defies normal
market conditions by imposing friction on markets. The gold standard applies tax burden on
individuals advancement of their interests in the market.
If you have no use for ‘dead money’ parked on balance sheets, “distribute it to your
shareholders.” Shareholder’s will allocate that cash where the economy can use it, is subtext of
central bank governor Mark Carney’s urging, even in art ”Sotheby's Scores Its Biggest Night
Ever” but gold, not so much.
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