Seeing that Greece is the only thing people are talking about I give you the following tidy description of the rise and fall of the monopoly of credit in the same place at a different time. It is taken directly from Aubrey de Sélincourt’s The World of Herodotus.
In southern Greece, especially in the territory dominated by Sparta, the masses had been reduced to serfdom and deprived of political rights by a straightforward process of conquest; but in the more advanced communities to the northward, including Athens herself, a subtler and more interesting force had been at work. This was the introduction, probably from Lydia, of a metal currency. By about the middle of the seventh century all the leading Greek states, except Sparta who was always slow to move, were coining their own money, and every creditor was expecting to be paid what was owed him in cash. The old system of barter and of payment in kind was gone for ever. The invention of a metal currency, without which no progress in material civilisation would have been possible, nevertheless had a disastrous effect upon the small peasant farmer living on the produce of his land. ‘He used,’ wrote Zimmern in his Greek Commonwealth, ‘to take his stuff to market and exchange it for the goods he needed – wool for the wife to spin, children’s shoes for the winter, or tiles to mend the roof; or he would pay the smith and the joiner in kind for repairing his plough or his cart. But now most of them will not accept his corn and wine till he has turned it into money. How much is it worth? He has not the least idea: for it depends on factors outside his range and which he has no means of controlling. He takes what the middleman gives him; and the middleman makes a living on his commission. At the end of the first year he is alarmed to find he has not as much margin in hand as usual. When the inevitable lean year comes he has not margin at all. In fact he cannot see his way through the winter without help. His only resource is to borrow.
‘So he applies to the Big House (for the day of the professional Shylock is not yet). The Well-born or Eupatrid (as the Athenians called him) is most accommodating. His heroic ancestors used to take their gold with them to the grave, in masks and such like. He is delighted to have found a better use for it. Certainly he will keep him through the winter. But of course he must be repaid punctually next harvest. And he wants a little extra as well to make up for what he might have been doing with his money in the meantime – say twenty per cent for the six months. The old ‘garlic smelling Acharnian’… agrees. One more detail before the transaction is concluded. Is he sure he can repay? The Eupatrid has his oath, but he wants some more substantial security. Can he produce a friendly neighbour to go bail for him? He fears not. They have all grown cautious these days – ever since on market day there was a stranger from Laconia, telling all and sundry about the miserable state of the peasants there. The wisest man in Sparta, he said, summed up the position in five words” ‘Go bail and see ruin’… So neighbours are no good he is thrown back on his own resources. What has he got to offer? Only his land and his labour. He has never really thought of his land as his own: properly speaking it belongs to his family, to his ancestors and descendants as much as to himself. Still, the neighbours keep telling him that this is an old-fashioned idea, and that nowadays land can be bought and sold and sliced and pieced together just like any of the ordinary wares in the market-place. What will the children do if he has no land to leave them when he dies? And what about all the religious associations? Well, necessity knows no religion, and his children must pray for happier times. So he consents, reluctantly, to make a bargain about his land. If he does not repay next spring, let the Eupatrid take it over: he will cultivate it as his tenant, and pay him a sixth of its produce as rent. Done. He goes away with his money, and the Eupatrid sets up an eyesore of a pillar, with letters on it, in full view of the house. He cannot read the letters, but he supposes they are to keep him in mind of his bargain.
‘Alas he needs no such reminder! Lean years have a way of running in cycles. Next spring the harvest is as bad as its predecessor. By the end of the year his land in no longer his own, and he has joined the ranks of ‘clients’ or ‘sixth-parters.’ For some time all goes well. Then there comes a bad year, when expenses are heavy and he cannot pay his sixth… What remedy has the landlord? He could no doubt evict him. But, besides being impious this is to neither party’s advantage. For the landlord could not easily replace his tenant nor the tenant his home. What has the peasant left to offer? Like the modern proletarian, nothing but his labour. So he makes another and still more humiliating bargain. Unless the rent is paid (of course with interest) by next spring, the whole produce of his labour shall henceforward belong to the Eupatrid. In other words he will become his slave…
‘Such, roughly speaking, is the history of many of the debt-slaves whose bitter cry goes up in seventh-century Greece and in the prophecies of Israel – perhaps the bitterest of all forms of slavery, because its victims are suffering in the midst of increasing abundance.’
In Athens, of whose political fortunes we know more, by the accident of literature, than of the other Greek states, the desperate situation which had been brought about by the economic revolution was checked, if not remedied, by the political courage and ability of Solon, the man of whose reputed wisdom Croesus had expressed such grave doubts. Some time in the first decade of the sixth century he was given special powers by the ruling clique in Athens, and began his reforms by a sweeping measure which came to be known by the picturesque name of the Shaking off of Burdens. By this measure all the debt-slaves were declared free, and all the mortgages and debts by which the debtor’s person was pledged were annulled. It was a fair start, and the general relief was celebrated in the ancient characteristic way by a public feast and thanksgiving. A further blow was struck at the rich by the introduction of a limit to the amount of land which could be owned by a single person, and by the prohibition of the export of grain to foreign markets where higher prices had up till then been obtainable. ‘The land which was enslaved,’ Solon wrote in one of his poems – he was not much of a poet, but wrote in verse for the simple reason that no one had yet thought of writing in prose – ‘I made free. I brought back to their heaven-built fatherland of Athens many who had been sold as slaves, justly or unjustly, and many who for their debts had been driven to exile and had almost forgotten their native speech from wandering abroad so long. And those who here endured cruel slavery and trembled at the harsh temper of a master I restored to liberty.’
De Sélincourt, A. 1962. The World of Herodotus. Little Brown and Company Limited, Canada, pp. 109 -112