The development of sustained trans-regional connections across the Indian Ocean was made possible through the invention of a number of key technologies and the adoption throughout East Africa, the Middle East and South Asia of a set of shared social practices. One key technology around which a set of social practices converged was money, a human invention whose value is socially constructed. The Indian Ocean World (IOW) currency system was highly complex and comprised a number of competing currencies, each with its own range of circulation and depth of penetration. The list of currencies that, at one point or another, were widely circulated included, but in no way was limited to, gold, silver and copper coins , salt bars, cloth squares, grain, beads, shells, heads of cattle, promissory notes and bills of exchange. These currencies had a wide variety of provenances. For example, precious metal coins that circulated in the IOW were minted in India, China, the Middle East, Europe and the Americas. Similarly, cloth was manufactured throughout the IOW and, following the introduction of mechanization, imported from Britain, France, Germany and the United States . Cowry shells were harvested primarily in the Maldives, though their range as a currency extended from Southeast Asia all the way to West Africa.1
In the IOW, currencies served a number of economic, spiritual, aesthetic and affective functions. As a result, their use was fraught with the tensions between the global/universalist and the local/particularist. On the one hand, currencies were a medium of exchange employed to settle market transactions and, therefore, were a technology that bridged differing cultures. Historically, a significant portion of trade in the IOW took place over long distances. This was true both of high-bulk, low-value commodities and of luxury goods. For example, in the nineteenth century, Indian grain fed Red Sea communities,2 and enslaved peoples from the African interior were sold in Persian Gulf markets.3 For these Indian grain merchants, Red Sea grain purchasers, African enslavers and Persian Gulf elites, as well as the many others in the IOW who depended in some measure on market transactions, currencies were key to participating in long-distance trade. Currencies were by definition commodities to which purchasers had access that sellers accepted in direct exchange for their goods. As a result, their circulation represented a commonality of ideas that transcended local understandings. On the other hand, the creation and circulation of currencies were guided by culturally specific considerations. Currencies were, at times, used for adornment and, therefore, subject to the vagaries of shifting local fashions.4 Additionally, they were used in specific religious rituals. For example, in China coins have traditionally been used as a medium for communication with the spirit realm and, therefore, sometimes play a prominent ritualistic role in divination ceremonies.5
The case studies in this collection demonstrate that the IOW currency system was shaped by the tension between the local and the trans-regional. By examining the ways that conditions in the IOW impacted the local use of currencies in India, China, the Red and Arabian Seas, Madagascar, East Africa and Mauritius, these studies show that the IOW currency system was not simply created and propagated by economic forces. Rather, this system was, in no small part, structured by the moral economy shared by market actors throughout the IOW. This moral economy was, as E. P. Thompson defined it in another context, âgrounded upon a consistent traditional view of social norms and obligations, of the proper economic function of several parties within the communityâ.6 In turn, this moral economy was structured by the tensions between local and trans-regional social, political and religious forces. The community of market actors in the IOW was cosmopolitan by nature, and comprised members of a number of religious denominations, ethno-linguistic groups and social classes. Nonetheless, this diverse community shared, to varying degrees, a common understanding of the role of the state in shaping market exchanges. In particular, this community accepted that sovereign states had the exclusive right to mint silver, gold and, in some cases, copper coins, but not the right to determine the currencies used to settle transactions. This latter right was seen as the traditionally inalienable prerogative of the participants in the market. As was the case in other realms of the IOW economy, the set of âsocial norms and obligationsâ that underpinned the IOW currency system was undermined by political innovations introduced from the end of the nineteenth century as a direct result of or challenge to European imperial rule. Though this process was contested, states ultimately wrested control of the currency system away from market participants. In asserting the right to determine the currency denomination of market transactions, states introduced new territorial currencies and demonetized all others within their borders. By the last third of the twentieth century, the trans-regional IOW currency system had been replaced by a system of national currencies and official currency exchanges. Nonetheless, the use and circulation of currencies throughout the IOW continued to be shaped by non-economic factors because currencies are by nature social inventions.
The Nature of Money
Currencies must be understood in terms of what they representâmoney. Within the field of economics, an analysis of what money is generally grounds itself in an analysis of what money was, that is how money came into being. In classical economics, money is a social convention that was spontaneously invented by participants in primitive barter economies. Within the typical classical economic narrative, the exchange of goods in early societies was structured by direct barter. When these societies became more complex, they ran into the problem of what William Stanley Jevons in 1875 labelled the double coincidence of wants.7 As economic specialization deepened and the list of in-demand goods widened in these societies, it became unlikely that two people would each simultaneously have the goods that the other needed. This barrier to barter led people to spontaneously use the most readily in-demand good as a medium of exchange because everyone recognized that it could be easily re-traded at a later date. The development of a universal medium of exchange marks the transition away from barter to a money economy. Though Jevons is credited with naming the problem that classical economists believe money solves, he did not originate the barter theory of money. This theory dates back to Aristotle.8 However, it was first elaborated in its modern form by Adam Smith in his chapter âOf the Origin and Use of Moneyâ in The Wealth of Nations (1776).9 Subsequent classical economists have slightly modified Smithâs original definition of money as a medium of exchange to recognize moneyâs ability to act as both a common measure and a store of value. Nonetheless, economists continue to repeat Smithâs formulation that the nature of money was shaped by its historyâthat is by the transaction difficulties that historically arose in early barter-based societies.10
Though the barter theory of money is fundamentally a theory about both the history of money and the way exchange works in non-money societies, the economists who have advanced this theory have offered little historical, archaeological or anthropological evidence to back it up. Instead, economists often resort to imploring their readers to âimagineâ a pre-monetary past or a barter society that the economist posits must have existed. This paucity of mustered evidence has led historians, archaeologists and anthropologists to search out the missing evidence. However, scholars in these fields generally have found evidence that fundamentally contradicts the assumptions underlying the barter theory. Anthropologists have not found pure barter economies, such as the one described by Adam Smith in which, according to the example he gives, the butcher trades his surplus meat to the baker in exchange for the latterâs surplus bread.11 This kind of simple barter has only been found in formerly money societies that have experienced a currency crisis and therefore reverted to direct exchange.12 In societies that are not governed by the logic of money, the redistribution of goods tends to work on the principles of hospitality, obligation and reciprocity.13
Similarly, archaeologists...