History of Money, Banking, and Trade
A historical look at the development and evolution of money, banking, and trade. From the ancient civilizations to the present.
History of Money, Banking, and Trade
Rediscovering Indus: From Agricultural Roots to Trade Brilliance
What if we told you the ancient Indus Valley civilization had a trade network as sophisticated as a modern-day global economy? On this episode of the History of Money, Banking, and Trade podcast, we unravel the secrets of the Harappans, who flourished around 3300 BCE in what is now Pakistan and northwest India. Join me, Mike D, as we journey back in time to discover the organized urban planning, central authority, and peaceful society of the Indus Valley, all without the typical hallmarks of kings or warfare. We'll also trace their origins to the early agricultural settlement of Mehrgarh around 7000 BCE, highlighting their farming practices and the surprising absence of metallurgy.
Explore with us the extensive trade networks that connected the Indus Valley to ancient powerhouses in Mesopotamia, China, and Egypt, despite the challenges of a civilization without deciphered written records. We’ll spotlight the ancient port of Lothal, famous for its docks and crucial role in international trade, and discuss how this interconnected society might have relied on a sophisticated system of credits rather than barter or coinage. From agricultural products to jewelry, the variety of traded goods paints a vivid picture of a vibrant and complex economic system. With insights from William J. Bernstein’s "A Splendid Exchange," we'll challenge modern biases and uncover the speculative yet fascinating nature of these ancient trade systems. Don’t miss this enlightening episode as we piece together the intricate puzzle of the Indus Valley civilization.
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Welcome podcast listener. I am Mike D and this is the History of Money, banking and Trade podcast. My goal is to expand your knowledge of the history and evolution of trade, along with money, banking and credit, from ancient civilizations all the way to the present. I truly hope you find these episodes to be informative and entertaining. Now, I'm not a historian but, like Dan Collin likes to say, I'm a fan of history.
Speaker 1:For this episode, I wanted to continue looking at the ancients of the ancients. What I mean by this is our ancient civilizations of the Greeks and the Assyrians would have looked at Dynasty Zero of the Egyptian Empire as an ancient civilization as well, but as Dynasty Zero was forming up, we also see another ancient civilization to the east that was also flourishing. I also wanted to talk about this civilization because I brought them up several times and, more importantly, I just don't think enough people talk about the Indus Valley as we go through this series. I think you'll kind of understand why. Unfortunately, there isn't as much information as we'd like surrounding these various cities, but either way, I thought it'd be a nice region of the world to explore, as it ultimately was one of the earliest civilizations to form up upon the Indian subcontinent. The Indus Valley civilization was formed in modern day Pakistan and northwest India around 3300 BCE. So we're talking right around when Dynasty Zero was forming up in Egypt. So we're talking right around when Dynasty Zero was forming up in Egypt. The people in the region were sometimes referred to as the Harappans, so on occasion I may refer to them as the Harappans, just an FYI. Also, I want to make it clear my pronunciation might be out of touch, so just bear with me if I mispronounce a few of the names and places in this series. I apologize beforehand. I know it's actually get worse, probably in India, so I just want to kind of throw that out there. Anyway.
Speaker 1:Now, out of all the podcasts I do, this one might be one of the more challenging ones, because there really isn't a whole lot of information pertaining to the Indus Valley region. We do know that these civilizations lasted for a very long time, upwards of about 2,000 years, as it started around 32 or 3300 BCE and it lasted approximately to around 1300 BCE. And ultimately, the biggest reason why I wanted to put this episode together was because I would come across references to these civilizations, especially when I'd read about Mesopotamia or ancient India. So I figured, why not try to piece the puzzle together with, say, mesopotamia, with their interactions with the Indus civilizations, their interactions with the Indus civilizations? However, I think it's important when looking at the ancient Indus Valley societies, along with a lot of other ancient societies, that we try not to view them from a modern American or European lens, for example, or you know, from some other place. That's a modern place, it could be somewhere in Africa or whatever, but you want to really understand that these are ancient civilizations, and this right here can be a challenging exercise, because oftentimes we are so conditioned to view things a certain way that it can be difficult to take a step back and realize ancient people in different parts of the world had much different values than we do today. A lot of this can be driven by the fact that in today's society we have access to abundance of food and water and medicines and shelter, along with living relatively peaceful as well. A lot of ancient society did not have many of those conditions on a frequent basis, but even more so, much of history from this region of the world has been filtered down through colonialism. So, like a lot of non-European societies, it may be hard to separate fact from fiction or, at the very least, negative propaganda, or at the very least negative propaganda. Now, unfortunately, much of the history has been lost or yet to be deciphered. In fact, I've read that historians have indicated that so little is known that it's best to really not assume anything about these cities. And I think this is really necessary because, as an American and I think most people in the Americas and even Europeans well, they generally have a better understanding of ancient European history, more so than, say, asian or Near Eastern histories. And then you would factor in certain biases and certain things can get lost or misunderstood.
Speaker 1:It appears that the first settlement in the Indus Valley was in a place known as Mehigar. This settlement may have originally formed around 7,000 BCE 7,000 BCE Now. I would imagine that this settlement would have looked a lot like other settlements in other parts of the world during this time period, in that once the population settled into a more permanent basis, the inhabitants would have most likely been farmers and also raised certain herd of cattle or goats and sheep, for example. Certain herd of cattle or goats and sheep, for example. In addition, it did not appear that they had an early form of metallurgy as metal tools from the settlements that were later discovered did not indicate as such. But that would make sense because this is so early in time periods that we haven't even crossed the boundary of getting into the Copper Age, so that would make a lot more sense. And don't forget, this is 7,000 BCE, so we'll have a good 4,000 more years before we get into what we know of the ancient valley civilizations. So this would be another case of the ancients for the ancients, because the Ennis Valley that I'm going to discuss didn't get started to about 3300 BCE.
Speaker 1:Now, bear in mind, this would have been completely separate civilization from the civilizations of the Indus Valley, and that would make a lot of sense because there's a 4,000 year separation. So there's obviously going to be a lot different and also, too, there's going to be different migration patterns. So the people that are in this region 4,000 years later will be different kinds of people that would have migrated in from other parts of the region or the world itself homes out of mud bricks that would have looked a lot like the ones that we'd have found in Sumer. It's hard to know for sure, but it's possible that there was some kind of information that was passed between the two societies, or it's possible that their home building skills were developed independently of each other and there was no information passed, just kind of one of those weird historical coincidences. That's a certain possibility of that happening.
Speaker 1:By the time we get to 5500 BCE, it appears that the civilization was getting better at farming, but they still would have planted mostly cereal crops, of which the grains would have been stored in mud brick granaries. The homes also appear to become a bit more standard, in that you wouldn't see a great variation between certain homes in the villages. But it was in this time period that we really start to see much bigger operations in bread making and advanced pottery, but it doesn't seem that they were an outlier from other ancient civilizations that were also thriving around this time as well. In other words, archaeologists don't notice a big difference between the finished goods in this society versus other societies in other parts of the world, so I'm thinking a place like Sumer, for example. But nonetheless it was just a slow, steady advancement in technologies, and let us not forget that we are not even in the Bronze Age yet.
Speaker 1:The earliest periods of the Indus Valley would have been in the time frame from approximately 3300 BCE to about 2500 BCE. This 800 year period would have been a bit more transitory in nature, but there would have been more permanent housing and farming as well. It's really not until we get to the middle Indus period, which would have been from, say, 2500 to 1900 BCE, that we really start to see the Indus Valley form up and more or less become the region that archaeologists and historians tend to refer to. So by this time the people of the in this valley are growing crops year-round and the inhabitants would have become more or less permanently settled and therefore less migratory. But I think what really separates this time was the fact that the technologies were advancing as climate change was encroaching, but the people of the region were basically able to deal with it, and this was done by building impressive irrigation systems. In addition, as farming got better and they were able to establish a steady source of water, the population grew and they were able to diversify their livelihoods by raising not just cows, but they also expanded into chickens, and they were also able to raise donkeys as beasts of burden for trade, of which they were able to trade their surplus with other Indus Valley cities and even people outside of the valley Valley cities and even people outside of the valley, and this is when we really start to first hear about the Indus Valley from other societies in places like China and Mesopotamia. Now, the Chinese would refer to the people of the Indus Valley as the Shendu or the Sindh or the Sindh, and by around 2500 BCE there were over 1,000 cities and smaller settlements within the Indus Valley. So the Indus Valley was really a collective of different towns and villages that all had similar cultural norms.
Speaker 1:Of the cultural norms, the subject of writing is a bit tricky because the Harappans, or, if you want to just say, the people of the Indus Valley, however you want to refer to them. Well, they used a system of writing that was similar to that of the cuneiform writing used by the Sumerians and as such, it's quite possible that a lot of the systems and ideas were transferred between the two cultures through trade. However, historians think that the Indus system of writing was, in fact, independently developed rather than based on Sumerian cuneiform. This script is called the Indus or the Harappan script, but the biggest problem is no one really knows how to translate any of it. There hasn't been a Rosetta Stone to help archaeologists decipher the script, so it cannot be read today, unlike, say, the Sumerian cuneiform, it cannot be read today, unlike, say, the Samaritan cuneiform, and that in itself is the biggest reason why discussing the people of the ancient Indus civilizations tends to be a bit more tricky than other places, because in other societies that have had writing deciphered, we can really know a lot about the place.
Speaker 1:But unfortunately for us, a lot of the information that we're going to get is probably going to come from other cultures and other places, and really what happens is archaeologists kind of have to put some sort of educated guesswork into what certain things meant when they find them. So in a way, kind of having this episode after I just published the Nubian episodes kind of really goes together in a sense that, for example, with the Nubians, they didn't have any writing until about 300 BCE. So a lot of the stuff that we get about the Nubians would have come from the Egyptians, and that in itself can be a problem, especially if a culture is at war or maybe they're just typical trade rivals. So you get a lot of negative propaganda surrounding the culture that either doesn't have its own written language or has a written language that hasn't been deciphered. So therefore one would think well, we don't have any deciphered letters or tablets, so maybe we can look and see what other cultures are saying about them and try to get an understanding of what the Indus Valley culture was really like, of what the Indus Valley culture was really like.
Speaker 1:Unfortunately, the Mesopotamians and even the Chinese really didn't write a lot about the Indus culture, so we can't really go on their accounts because there just isn't enough of it. What we do get is limited accounts from certain trading missions into Mesopotamia or into China, and that's really about it. So everything that we know has come from archaeological digs, and through these digs we're able to get an understanding of the housing and the buildings that were constructed, along with other items that were recovered. That would have to be interpreted. And the problem with interpretation is sometimes it's interpreted incorrectly. And this goes back to what I said at the beginning, where I was saying hey, you know, as Americans or Europeans, when we're looking at things and we're trying to interpret it, we tend to interpret it through the eyes of colonialism, and that can lead to a lot of problems because there's going to be a lot of misinterpretation and a lot of misunderstanding.
Speaker 1:Since we don't have any deciphered writings, historians really aren't sure what kind of political system the people in this valley would have participated in. They are pretty sure that there was some kind of central planning or government in place, because the cities and towns were laid out in a grid formation, which would mean that there would have to be someone that had some kind of responsibility for ensuring that the city was laid out in the grid fashion, because without a central planning authority, you would expect the cities to be kind of jumbled up in the streets and alleys, going in all sorts of different directions. Ultimately, there is also a lack of evidence of any kind of king or signal ruler, so no one really knows what kind of government the Indus Valley civilizations had, or even if they had a government at all. Since no one can interpret the script, no one really knows for certain what kind of political system was put in place. An idea has been put forward that maybe their political system was similar to that of the Italian city-states in the late medieval period, whereas the merchants or the landowners had a much bigger say on how the city was run.
Speaker 1:Now, with regards to politics, something interesting has been noticed. In fact, I'd say that it is one of the most remarkable things that has ever been discovered from any ancient society, or even a modern society for that matter. What I'm getting to is the fact that there is no evidence of any kind of wars that have occurred in this region. Therefore, historians really aren't sure if they didn't go to war because they were so peaceful, or maybe they were so isolated that others did not go to war with them, so maybe they didn't have a natural enemy due to the fact that they were kind of hemmed in by the mountains. But either way, even if you were isolated or living in a region that's hard to get to, it's still remarkable that there is virtually no evidence of any kind of war whatsoever in this region. And, to be honest with you, if someone would have asked me not too long ago if there's ever been a society that potentially has never had any wars, I would have said that is probably not likely. It's probably almost impossible for anything like that to ever happen with any place in the world. But the Indus Valley may have proved me wrong.
Speaker 1:The biggest reason we know of the people in Indus Valley was initially due to the fact that they were mentioned in ancient Chinese writings, as well as in Mesopotamian writings, whenever they conducted trade with these people. In addition, archaeological digs have also shown that there was an ancient civilization in the region. This particular region would have been around the Indus Valley and its tributaries, so ultimately, access to rivers would have made it easier for other civilizations to trade with the people of the Indus Valley. But it wasn't just the river that allowed the population to move goods out of the region. In addition, there were other large bodies of water, such as the Arabian Sea, the Persian Gulf and the Red Sea, that would have allowed the people of the Indus to trade with other Indian peoples, along with moving goods into places like Dilman. That ultimately would have moved goods into Sumer and the rest of Mesopotamia, along with even moving goods into Egypt and Nubia. This trade through the water systems was most likely enabled by rafts that had sails with masts on them. Unfortunately, these rafts would have been made of wood and they would decay and decompose and therefore we wouldn't have any examples that would have survived. So unfortunately, we just really don't have any direct evidence. Unfortunately, we just really don't have any direct evidence Now.
Speaker 1:A town called Lothal, which was famous for its docks, would have been an early trading port to ship goods in and out of the region. It appears that these traders would have worked on these docks and would have worked hand in hand with local farmers and craftsmen and, ultimately, with the merchants. They would have shipped the goods to India, to Egypt, mesopotamia, anatolia and Dilmun, and, along with China, directly from Lothal. I bring up these sites specifically because it appears that these were the biggest trading partners outside of local trade within the Indus Valley. The reason why we know all this is because there have been so many fragmented remains throughout these regions, which suggests that there were extensive roadways and sea routes that extended as far as Anatolia.
Speaker 1:In an absolutely fabulous book by William J Bernstein called A Splendid Exchange, he referred to this as version 1.0 of the World Trade Organization, but he also noted that the trade was probably indirect, meaning that there were a lot of middlemen involved to take the handoff of goods to each destination. So therefore, it's quite possible that the people of the Indus Valley never met the people of Anatolia face to face. In other words, there's just, you know, from point A to B, to C to D, and eventually gets to point X and that point B in Anatolia, and the goods could have exchanged hands numerous times before he got there, and these goods that were trading would have often been some sort of crops or foodstuffs, along with certain goods produced by craftsmen, such as beads and pottery, and cloth along with other locally mined minerals or jewels, and cloth along with other locally mined minerals or jewels. We know this because archaeologists have found products in places like Mesopotamia and China that were developed in the Indus Valley. Now the one thing we do not know for certain is what kind of currency was used or, specifically, how they would have traded with others was used, or specifically how they would have traded with others.
Speaker 1:When I was in my undergraduate studies and even graduate studies for that matter I would often read about these great barter operations that these people would have utilized in order to facilitate trade. The problem is there really isn't any direct evidence of barter. The problem is there really isn't any direct evidence of barter. So it's quite possible that my textbooks would have been written extensively on barter, because that system would have been the most logical process for economic historians. Even the great Adam Smith wrote about barter. But, like I said before, there isn't any evidence about this system that would have taken place anywhere on a large scale and on a micro level, sure, barter would happen even to this day, but on a macro level, it probably didn't happen this way as the way I was always taught.
Speaker 1:Instead, what was most likely, the way people in the industry traded was through a system of credits, whereas people track what kind of goods were traded with one another and then there would be some kind of settling up at some specific time period. So, in other words, I trade with various people, those various people trade with others. We all have knowledge of each other's deals and at the end we minimize the transfer of whatever good we want to use as a medium exchange to the fewest amounts and to the fewest amount of people. Or, if it's a simple one-to-one trading system, we settle up at a specific time period and we just net the amounts of the medium exchange. What they would have used as the medium, we don't really know. Maybe it was some kind of grain, or maybe it was silver, or maybe it was gold or some other kind of commodity. But this really is becoming, I think, the more likely scenario of how macro level trading would have taken place. So it's quite possible that the idea of using a system of credits and settling up well, maybe that's how the people of the ancients in the valley would have traded internally or even externally. But the fact remains is we just don't know, and we ultimately have to speculate on, how these transactions would have occurred. And a lot of the speculation would come from the fact that there was no evidence that the people of the Indus Valley had their own coinage or even a concept of money. Now, the coinage issue shouldn't be much of a surprise, because we really don't see any evidence of coinage until about 630 BCE in Anatolia, in the kingdom of Lydia. But prior to the use of coinage, other civilizations would have measured out silver and even gold to a lesser extent as a means of payment or would have used other grains as a form of currency. Like I said, it's possible that the people of the Indus used a commodity as a form of currency, but that's just not known at this point. A form of currency, but that's just not known at this point.
Speaker 1:Like all other ancient civilizations, the most popular trade would have typically been that of foodstuffs and other animal products, and it wasn't just raw materials that were traded. It also would have been processed or even finished goods that were made directly from the animals or the crops that they raised. The most common processed agricultural goods would have been that of certain cotton clothes, along with dried spices. I'd say that the most popular trade items outside of the agricultural goods would have been that of pottery and jewelry. Not unlike other ancient civilizations at this time, the pottery would have been made of mud or clay, but they also would have traded other certain goods, such as kitchen goods, such as plates and cups and bowls. These goods could have made their way into other civilizations away from the Indus Valley, but for the most part they would have been traded locally and circling back to their biggest trade partners outside of the local Indus Valley. Well, these trade partners would have been, as I mentioned, the people of Mesopotamia and China and other Indian civilizations.
Speaker 1:The people of Mesopotamia would have shipped certain minerals and gems to the Indus Valley, whereas the Chinese would have sent a diverse array of goods, in part to the fact that they were so far away. They would have sent certain items such as hardwood and jade. And if you aren't familiar with jade, jade is a mineral used in jewelry. It's typically green, although it may be yellow or white. So it's quite possible that jade came into the Indus Valley and they would have used it to create jewelry and then they would have shipped it off into other faraway places like Mesopotamia or even south into the Indian subcontinent. So it sounds like a very modern international trade system where you get minerals or certain items out of the earth, you sent it to another place where they processed it and then they shipped it off into other parts of the world. Sounds like a very modern process to me, and this was done, you know, 2500 BCE, so it's quite astounding to me. Ultimately, historians know these civilizations traded with each other because items from the Indus Valley have been found in sites located in Mesopotamia and China, in Lower India and as far away as Egypt and as well as Anubia.
Speaker 1:And eventually, the Indus Valley will make trade more efficient when they develop certain standardized weights and measures. This aspect is probably one of the more underrated aspects of trade, and I don't think a lot of people typically think of this when they envision what aspects needed to be developed in order to facilitate trade. So, without having a standard way to take measurements, trade would be very inefficient. However, once you develop standards that everybody's going to use on local trade, well then that would make a lot easier when you know specifically the amounts of the goods that you are moving between each other. So, in other words, without standardized weights and measures. So, in other words, without standardized weights and measures you would pretty much have to either eyeball or squabble about the amounts on nearly everything that you're moving from one source to the other. But now, with standardization, you can get exact amounts.
Speaker 1:When I was discussing Sumer and Akkad, it was when Sargon, who conquered much of Mesopotamia. Well, he had instituted standardized ways and measures which ultimately helped grow trade throughout Mesopotamia. The same thing could have happened in the Indus Valley civilizations. We don't know if there was a single ruler most likely not, but it is more likely that it was an organization or possibly a committee of various city-states that would have instituted standardized weights and measures between the towns, which ultimately would have helped trade tremendously, and this would have ultimately given people a good idea of each of the goods that they're trading, its true value. Now, the one thing that really helped out the people of the Innis Valley was they were very good with advanced mathematics. Of course, this would have most likely helped with trade, but also would have been used in the measurements for architecture and metallurgy and even designing the irrigation systems, but for a long distance trade. Having the ability to measure distances enabled the people in this valley to get a good understanding of how far they needed to go when they were trading long distances, because they had the ability to measure distances on land and sea.
Speaker 1:Now I just brought up metallurgy a few seconds ago. It appears that they were great at making bronze, but they were also able to make objects out of copper and tin by itself. It's most likely that none of the objects were made purely out of tin, because it would have been very valuable objects because tin was very rare and highly coveted throughout the ancient world during the Bronze Age. In my opinion, kind of looking back at it, tin kind of reminds me me of the modern world's use of oil, in that modern societies need oil for industry and defense, just like in ancient societies. They would have required their ability to get tin as a national security issue, along with using it in industry for making tools and, obviously, weapons.
Speaker 1:And another valuable commodity that is highly coveted today as well as it was back in ancient societies was that of gold. Now it is not really known for sure if the people of the Indus Valley civilizations would have traded gold as a medium of exchange, or if it was used in certain religious festivals or even as burial traditions, like there was of the Egyptians. But it appears that they did have the ability to determine if gold was real or not, so most likely they would have had some sort of desire for gold. What it was used for, we're really not 100% sure. The Innis Valley would have experienced two monsoon seasons per year, so therefore they would have had an abundance of water in the region, but like the Egyptians, they would have had to be able to control the water, especially when it was too much water. Since they had great engineering skills, they were able to control the flow of water coming into and out of the region, just like the Egyptians were able to control the flow of water coming into and out of the region, just like the Egyptians were able to control the Nile. Some of the staple food crops that were traded, which was mostly internally, were cereals like barley and wheat, along with other certain beans and sesame. They also learned how to produce different kinds of millets, in which they may have been one of the early pioneers in selective breeding in agriculture, in which they may have been one of the early pioneers in selective breeding in agriculture. Eventually, their farming basically expanded into growing fruits and vegetables, including melons and dates, and even grapes.
Speaker 1:Just like the people of Sumer, the Indus Valley utilized the furrow irrigation system, which was a large, complex and unified structure requiring command in place by places like the temple or the palace in order to coordinate the labor on a grand scale, creating small channels along the length of a field in the direction of its slope, so water would be applied to the top of each furrow and it would flow naturally down the fields under the influence of gravity. The rows were laid out in a raised pile and then lowered into a trench pattern. This made it a lot easier to separate the plants that need to have deeper and shallower roots and to provide certain kinds of spacing. In addition, this helped to reduce flooding and soil erosion whenever there was excess rain during the monsoon season. In addition, this pattern also kind of helped create a protection barrier against erosion caused by the wind.
Speaker 1:In addition, the local farmers would have also used beasts of burden to help make farming more efficient, and since there was trade with the peoples of Sumer, the people in this valley would have learned from the people of Sumer and how to create and use the plow. Now, unfortunately, the plow would have been made of wood and therefore all the ancient plows would have decayed a long time ago and therefore we wouldn't have any leftover plows that we can study to this day. So in the end, the Indus economies, like all other ancient civilizations, pretty much revolved around farming and agriculture, and eventually they were able to grow cash crops such as cotton. Besides growing cash crops, the local people domesticated cows and goats and sheep, of which this would have provided the local population with the much-needed proteins, including milk and meat, but also these domesticated animals would have also provided wool and leathers. In addition, the people would have supplemented their meat intake through hunting and fishing. So the fact remains that the people of the Innis Valley were able to grow their crops, have access to meats and cheeses from their domestic animals and therefore the various cities of the Indus Valley would have saw population booms, of which I'll go into more detail in the next and last episode of the Indus Valley.
Speaker 1:I realize this was a shorter episode, but I thought it'd be a nice primer for when I get into the various cities that made up the Indus Valley, if you like what you hear and want to donate to the show. You can visit us at patreoncom slash history of money banking trade or you can visit our website at moneybankingtradecom. Also, you can help out the show a ton by leaving a five-star review, along with telling a friend or two Thank you very much. Talk to you soon.
