Spartan Iron Currency

In about 600 b.c. Lycurgus, the famous Spartan lawgiver, put into Sparta’s constitution a provision that banned the circulation and possession of gold, silver, or other precious metals as a means of transacting business and replaced these forms of money with an iron currency, variously reported as being in the form of disc or bars. This provision was part of a plan of social reform intended to spare Sparta the evil consequences of wealth concentrated in the hands of a few citizens. According to Plutarch, Lycurgus, after effecting a land reform that spread out the ownership of that wealth, set to work reforming the currency. In Plutarch’s Lives of Noble Grecians and Romans (1952) we read that Lycurgus:
Not content with this [land reform], he resolved to make a division of their moveables too, that there might be no odious distinction or inequality left amongst them; but finding that it would be very dangerous to go about it openly, he took another course, and defeated their avarice by the following stratagem: he commanded that all gold and silver coin should be called in, and only a sort of money made of iron should be current, a great weight and quantity of which was very little worth; so that to lay up twenty or thirty pounds there was required a pretty large closet, and, to remove it, nothing less than a yoke of oxen. With the diffusion of this money, at once a number of vices were banished from Lacedaemon; for who would rob another of such a coin? Who would unjustly detain or take by force, or accept as a bribe, a thing that it was not easy to hide, nor a credit to have, or of any use to cut in pieces? For when it was just red hot, they quenched it in vinegar, and by that means spoilt it, and made it almost incapable of being worked.
Part of the motivation for the reformation of Sparta’s currency may have been the discouragement of trade with foreigners, because there is no record of exchange rates between Sparta’s iron currency and the coinage of other cities of the same era. It is unlikely, but possible, that Sparta was attempting to compensate for a shortage of domestic supplies of gold and silver, possessing no gold or silver mines of its own. Societies sometimes develop substitute monies when the growth of commercial activity is restricted by a shortage of money. The whole tenor of these reforms, however, seems to have been intended to limit the growth of commercial activity rather than promote it.
Lycurgus’s reforms sound a familiar refrain in the ancient literature on money, variations of the biblical warning that “the love of money is the root of all evil.” The use of money first spread in the seaport cities, such as Athens, where traders and sailors of all religions and creeds met at the crossroads of international trade. Exposure to foreign creeds, morals, and traditions often weakened the hold of domestic religions on the citizens of the seaport towns. Traders from all over the world, away from home, pockets full of money, made a ready market for all sorts of vices that thrived in these cities. The inland cities such as Sparta, dependent on agriculture rather than foreign trade, sought to protect themselves from the moral chaos that they saw as a direct result of the introduction of money and the massive inequality of wealth in the seaport cities.
History, however, was on the side of the societies that made use of money, and Sparta nearly disappeared as Athens grew to a world-class city.
See also:
Burns A. R. 1927. Money and Monetary Policy in Early Times.
Einzig, Paul. 1966. Primitive Money.
Plutarch. 1952. Lives of Noble Grecians and Romans.