How Mesopotamia’s Urban and Industrial Revolution Started Politics as We Know It Today

By Michael Hudson

(Last of two parts)

Monetization of Exchange Between the Rural and Urban Centers

Money evolved as part of the valuation dimension of exchange. Anthropologists studying surviving Indigenous communities have found that artifacts typically are valued for their rarity or lineage of ownership. In archaic times such objects were often buried with their wearers, having become part of their personal identity. In time, they took a proto-monetary signification of esteem. But it was in southern Mesopotamia that money became formalized as a measure of valuation, simultaneously for domestic agrarian and industrial exchange—mainly for grain and wool—and for foreign trade. In both cases, the palace and temples played a key role. A standardized measure of value was needed for the economy’s own industrial and institutional functioning, not merely for personal decoration and status.

Foreign trade was necessary to obtain raw materials not found in the region’s river-deposited soil. Copper and tin were the key metals that were needed, the alloy of which gave its name to the Bronze Age (3500-1200 BC), but silver was adopted as the main measure of value for palace transactions and those of entrepreneurs, presumably because of its role in religious symbolism. Silver and other commodities were obtained by a mercantile class of entrepreneurs, whose major customers were the palace and temples, which also supplied most of the textiles being exported.

The largest categories of debts and fiscal obligations were inter-sectoral, owed by citizens on the land and mercantile entrepreneurs to the palace sector and its temples. The seasonal character of agriculture made credit necessary to bridge the gap between planting and harvesting, to be paid on the threshing floor when the crop was in. Grain served as the main domestic agrarian measure of value and the medium for paying agrarian debts.

The palace and temples integrated their economic accounts by setting the silver mina and shekel that denominated the value of commodities obtained in foreign trade (and consignments of what was exchanged for them) as equal to corresponding measures of grain, while dividing the relevant measures into 60ths to facilitate the allocation of food and raw materials based on the 30-day administrative month used by the large institutions.

The resulting monetary system of account-keeping for credit and fiscal collection was part of a broader economic context in which standardized weights and measures were used to quantify and calculate the various magnitudes of the inputs required by the large institutions for producing commodities in their workshops, along with the amounts of the charges, fees, and rents payable to the institutions and fiscal collectors.

The surplus grain rent paid to the large institutions supported dependent labor in the weaving and handicraft workshops. Commodities no longer were made by individual craftpersons known to the users, but by many, whose identities were institutional and hence collective and impersonal as far as the buyers or users were concerned. The workforce consisted largely of war widows and orphans, and also slaves captured from the mountains surrounding Mesopotamia. (A typical word for slave was “mountain girl.”)

The textiles woven by this labor were consigned to merchants to act as intermediaries between the large institutions or the growing class of private estate holders and foreign purchasers. Interest charges (usually equal to the original loan value for consignments of five years) served as a means for consigners and backers to obtain their share of the gain that merchants were expected to make on their trade.

Bucellati shows how the urban revolution’s “evolutionary process in motion” to transform society and with it “the very nature of human existence.” The development of writing, for instance, had a deep effect in transforming thought processes, much as the creation of languages had served to “externalize thought.” It enabled the communication of ideas to others without having to rely on memory.

Originally used by the eighth millennium BC to oversee and quantify trade and exchange transactions, it came to be used for accounting and credit, and increasingly to preserve, arrange and order thoughts, public announcements, treaties, poetry, and laws. The written word became a new medium for thought. Buccellati describes this “reification of thought” as part of the “removal from nature.” That was part of the evolving uniformity that spread from the production of commodities to shape the overall social order.

Debt Strains Lead Rulers to Protect Their Economies From Polarizing

Industry and entrepreneurial foreign trade concentrated control and wealth in the hands of managers and “big men.” Their economic gains caused a wealthy class to emerge, initially within the large institutions, with credit being used to pry labor away from palace control. Creditor claims on indebted cultivators accumulated, largely at the institutional level of landholders, merchant-creditors, and also ale-women, whose customers ran up tabs for their beer, to be settled at “payday” on the threshing floor when crops were harvested.

It was inevitable that strains would develop as a result of the rising role of credit and debt relations, especially in times of flooding or crop failure. As rent and other payment arrears and interest charges mounted up, private lending (often by royal or temple officials acting on their own account) became the major initial way to obtain the labor of debtors, by requiring them to work off their debts. That prevented cultivators from performing the stipulated corvée and military service that they owed in exchange for their land tenure rights.

The result was a threefold conflict: first, creditors against debtors; second, creditors against the palace over the appropriation of labor via debt bondage; and third, the assertion of creditor power against traditional communal moral ideas of equity and mutual aid. Archaic communities traditionally sought to minimize economic inequality, perceiving much personal wealth as being achieved by exploiting others, above all by indebting them. By the third millennium, indebted cultivators faced the threat of being disenfranchised, losing their personal freedom and self-support land through foreclosure.

As Buccellati observed in our 1994 colloquium royal protection of homesteaders, canceling the overgrowth of personal debt resulted “more from a concern for the public domain than as a phenomenon of privatization.” Rulers from the third millennium BC onward protected palace claims on the labor of their citizens from being disrupted by debt strains of the type to which subsequent Western civilization has succumbed. Sumerian rulers made sure that these strains would not be permanent because that would have been at the expense of the palace’s own requirements for corvée and military service from agrarian debtors.

Buccellati pertinently notes that three main considerations shaped Near Eastern public laws: “the concept of rules, the sense of justice, [and] the decisive moments in resolving conflict.” Hammurapi’s “code” was simply a collection of judgments, but his andurarum proclamations were enforced by the courts to cancel personal debts (but not mercantile debts), liberate bondservants (but not slaves), and redistribute self-support land (but not townhouses) that had been forfeited to creditors or sold under economic duress. These Clean Slates were the most basic royal administrative acts of Mesopotamian rulers from Sumerian times onward. They were the moral pillar of the state.

The Mesopotamian State Solved the Debt Problem That Western Civilization Has Not

Buccellati sees the transformation of production, economic control, and ways of perceiving and thinking about one’s place in society as progressing toward a geopolitical peak with the Assyrian Empire. What enabled and made this sustained achievement so successful were royal laws to regularly restore economic balance on a system-wide level. Clean Slate proclamations prevented a creditor oligarchy from emerging to rival palace claims on the labor and crop surpluses of citizens on the land. In this respect, the distinction between financial and industrial gain-seeking—and the socially destructive character of usury and creditor self-interest—was recognized already in the third millennium BC in the Hymn to Shamash, the Akkadian god of justice (lines 103-106):

What happens to the loan shark who invests his resources at the (highest) interest rate?

He will lose his purse just as he tries to get the most out of it.

But he who invests in the long term will convert one measure of silver into three.

He pleases Shamash and will enrich his life.2

Buccellati rightly states that “We are the heirs of Mesopotamian perception and political experience.” Modern civilization, however, has retrogressed from the Bronze Age Mesopotamian achievement of avoiding deepening financial and economic imbalance. He notes that modern society defines property as being alienable, but in the West securing property rights always has entailed the “right” to forfeit it to creditors or sell under duress—irreversibly. That has been the case ever since Near Eastern commercial and credit practices were brought to the Aegean and Mediterranean lands in the first millennium BC.

The West has adopted the basic economic practices invented in the fourth and third millennia BC, but not the economically protective measures that rulers took to annul the buildup of creditor claims to reverse the increase in debt bondage and loss of land by debtors. That decontextualization is what in my view makes the West “Western.”

Bronze Age Near Eastern practice was so different from the Western worldview that most modern historians resist recognizing and appreciating the relevance of the region’s takeoff in the fourth and third millennia BC. Indeed, today’s anti-state economic ideology denies that money and industrial enterprise could have been innovated by what Buccellati calls the state, that is, the palatial authority.

This ideology obscures a great question posed for the West: How is it that Near Eastern “divine kingship” achieved what Western democracy has failed to do: check the emergence of a creditor rent-seeking oligarchy, which in classical antiquity would strip the Greek, Italian, and other populations of their means of self-support that had formed the basis of economic liberty for the first 3,000 years of the Mesopotamian takeoff that this book so comprehensively describes.

Michael Hudson is an American economist, a professor of economics at the University of Missouri–Kansas City, and a researcher at the Levy Economics Institute at Bard College. He is a former Wall Street analyst, political consultant, commentator, and journalist. You can read more of Hudson’s economic history on the Observatory. This text is adapted from Michael Hudson’s foreword to At the Origins of Politics by Giorgio Buccellati, and this excerpt was produced by Human Bridges.

References:

1. Buccellati, Giorgio, “The Role of Socio-Political Factors in the Emergence of ‘Public’ and ‘Private’ Domains in Early Mesopotamia,” in Hudson, Michael and Levine, Baruch (eds.), Privatization in the Ancient Near East and Classical Antiquity(Cambridge, Mass: Peabody Museum [Harvard], 1996):131.
2. In Giorgio Buccellati, “When on High the Heavens…”: Mesopotamian Religion and Spirituality with Reference to the Biblical World(London, 2024):194, citing Reiner, Erica, Your Thwarts in Pieces, Your Mooring Rope Cut: Poetry from Babylonia and Assyria(Ann Arbor, 1985): 68-84, and W.G. Lambert, W.G., Babylonian Wisdom Literature (Oxford, 1960): 122-138.