Image: Courtesy of Flickr by Carole Raddato
If you are curious and want to follow along, I’ll be spending a bit of time looking at some details of ancient finance.
(Cross post from Attestation Update.)
If you are already somewhat familiar, feel free to either roll your eyes as I flounder along or chuckle on how slow I am to catch on. If your knowledge of ancient finances is comparable to mine, that is to say approximately zero, please feel free to join me on a journey to learn a few details.
Wikipedia has some information about the Greek drachma which seems plausible. Will also mention some comment by Prof. Holt.
Comparable value
Article in Wikipedia says some economists and historians say one drachma in the 5th century (let me do a mental calculation – – that would be from about 499BC to 401BC) was about US$25 in 1990 or US$46.50 in 2015.
Classical historians give a different read for the 5th and 4th centuries (okay, mental math time, so that would be from around 499BC to 301BC, the 400s and 300s). In that time, one drachma would be around one days wages for a skilled worker or a hoplite. So that would not be minimum wage, but more along the line of a carpenter or mason.
Some historians say that half a drachma per day would be a comfortable subsistence for a poor family. That would be about 182.5 drachmas for a year for poor people.
The rough valuation of one drachma based on the Wikipedia article are:
- one day wages for skilled worker
- US$25 in 1990
- two days subsistence living standard for poor family
On the other hand, Professor Frank Holt provides a rough comparability of two drachmae being equal to about one days wages for a skilled worker. Here are two data points:
- At Kindle location 1782 the comment says Alexander capped the cost of a banquet at 10,000 drachmas which is 5,000 days pay for a skilled Greek construction worker.
- Location 1797 says guests at a banquet could eat 160 drachma of food which was 80 days pay for a mercenary of the day.
So that gives a valuation of 2 drachmaes equaling a days pay for a skill construction worker or hired military soldier. I’m comfortable using an additional comparison of half a drachma as poor living for a poor family.
Silver content
Article says a drachma usually weighed around 4.3 or 4.5 grams and was 90% silver. Let’s work with 4.5 g and ignore variations from city to city.
Plural of drachma is drachmae (hey, I’m catching on!)
- 70 drachmae = 1 mina, or later it was 100 drachmae
- 60 minae – 1 Athenian talent
That means:
- 1 Athenian talent = 4,200 drachmae
At the content mention of 4.5% @ 90% pure silver, that translates into:
- 4.05 g = 1 drachma
- 283.5 g = 1 mina = 70 drachma
- 17,010 g = 17.01 kg = 1 Athenian talent = 60 minae = 4,200 drachmae
- 1 Athenian talent would have 17.01 kg pure silver or 18.9 kg at face weight
Later valuation of a talent
The Treasures of Alexander book by Prof. Holt that I’m reading repeatedly uses a ratio of 6,000 drachmae to 1 talent. That would reflect the later ratio of 100 drachmae to 1 mina mentioned above.
So that would give:
- 1 Athenian Talent = 6,000 drachmae
- 1 Athenian Talent at the higher ratio would have 24.3 kg pure silver or 27.0 kg at face weight.
Ancient ratio of gold to silver
A 4.5 gram silver drachma was 90% silver.
A 20-drachma gold coin contained 5.8 g of gold. I will assume that is 22 carat because I’ve read pure gold is too malleable to use in coins.
Thus we have:
- Silver drachma = 4.5 gram @ 90% = 4.05 gram of silver
- Gold coin = 20 drachma = 5.8 gram gold blended or 5.32 g pure gold at 22/24 carats. Divide that by 20 gives 0.266 g of pure gold for 1 drachma.
So we have:
- 0.266 g gold = 4.05 g silver
Ancient ratio of gold to silver is
- 15.2:1.0.
Professor Holt repeatedly uses a ratio of 10:1 in his book.
Modern ratio of gold to silver
On 4/30/16, the Wall Street Journal commodities page shows:
Silver
- $17.93 – Engelhard industrial bullion
- $17.905 – Handy & Harman base price
- $19.20 – US silver coins per $1.00 face value – Silver coins at $14,787 for $1,000 face, which is $14.78 per $1 face, at 77% silver that is $19.20
Gold
- $1,287.83 – Englehard industrial bullion
- $1,285.65 – Handy & Harman base price
- $1,353.14 – American Eagle
Ratios today:
- 71.8:1 – Engelhard industrial bullion
- 71.8:1 – handy & Harman base price
- 70.5:1 – American Eagle to US silver coins
Those three ratios are roughly comparable to each other. A good rough number for today would be 70:1.
So, the relative value of gold to silver today is dramatically different from what the Wikipedia article reports for silver and gold drachmas.
Frame of reference for comparison
It does not work to use the current value of silver or gold to back into the value of the currency in Alexander’s time. The radical increase in standard of living invalidates that comparison. I’ll use days wages for a skilled worker for future discussion.
More specifically, I’ll use the rate of pay of 2 drachmae per day for skilled labor mentioned by Prof. Holt.