Accounting and Money in Ancient Mesopotamia


Do you have paper money or coins in your pocket or bag? Do you think it's easier to buy new sneakers with cash instead of trading for the sneakers with vegetables or livestock? Thank the ancient Mesopotamians. Most historians and archaeologists agree that the idea of money was born in ancient Egypt and Mesopotamia. At first, the Mesopotamians traded things like everyone else. Eventually, though, they developed a more complicated system where they could write down what was being bought and sold. These transactions weren't recorded on paper but on clay tablets. The first forms of currency were thought to be barley and silver: Coins did not yet exist. Not only did Mesopotamians develop money and writing, but they also developed the basics of accounting we still use today.

Mesopotamian Economics and the Development of Writing

Crop surpluses meant that not everyone who lived in Mesopotamia had to focus on producing food. Those not growing food could instead focus on building cities, making art, becoming merchants, and working in the temples and for the king who ruled the area.

  • Some of the people freed from making food became the world's first bookkeepers and developed a system of writing to record financial transactions.
  • Most of the early writing was lists of commodities, or things of value.
  • The ability to write was also used to keep tax records.
  • Some of the oldest examples of writing are bills of sale. Bills of sale record what is sold and when the transaction between a buyer and a seller happened.
  • Lists of things used by temple-dwellers were also kept by Mesopotamian accountants and have been found by archaeologists.

Money in Mesopotamia

Although historians and archaeologists know quite a bit about the development of money in this region, not as much is known about money as is known about pottery or tools. Why? Because people typically don't throw away money; it's usually used until it wears out, and then, if it's made of a precious metal, it's melted down to be turned into another coin or something else.

  • Silver rings were used as money in Mesopotamia and Egypt before the first coin was used.
  • Wealthy Mesopotamian citizens are thought to have used money starting around 2500 B.C.
  • Clay tokens were probably the first symbolic money exchanged, and they were used before writing was developed to track debts and payments. Archaeologists have found clay tokens dating back to 3300 B.C.
  • Early Mesopotamians had different token types that represented the three primary goods traded, which were grain, livestock (like goats or sheep), and human labor.
  • Eventually, there were 16 tokens, which represented commonly traded goods like beds, bread, furniture, clothing, honey, and other products.
  • This system grew too complex. How many loaves of bread are a pair of shoes worth, how much oil is a bed worth, and how many sheep do you owe someone who repaired your roof? This complex system led to the development of silver and barley as standard forms of payment.
  • Around 2500 B.C., a shekel of silver became the standard currency in the region. A shekel is about 1/3 of an ounce of silver. People who worked for a month were paid a shekel.
  • Soon, rulers began charging fines in shekels for people who broke the law.

Problems With Using Silver as Currency

The biggest problem with using silver as money was how valuable silver was. A slight mistake in measuring the metal could result in a lot of lost money. Another problem was that not all silver was equally valuable. Some silver is purer and therefore worth more than other silver. Dishonest people would also add less valuable metals to their silver or use other metals that look like silver.

  • Mesopotamians also used other, more common things as money. Barley was easy to measure and a valuable grain. Less valuable metals were also used, such as copper and tin.
  • Over time, this system allowed more people to get into debt. It became alarmingly common for people to be seized and enslaved to repay their debt. Rulers had to step in to make laws about debt repayment, including limits on how long someone could be kept as a slave to pay off their debt.

Mesopotamia and Money History Resources

By Eddy Hood, MBA and CEO of Ignite Spot Accounting Services