Rob,
Thank you for your fine and interesting post. I would make one additional point. Much, perhaps even most of the information that we now have about antiquity comes from research performed long after Hayek and Polanyi wrote--even after the time of Moses Finley. I am a big fan of both Polanyi and Finley, if not of Hayek, but it turns out that they were all being rather speculative in their comments about coinage and markets. Indeed, given how little we really know, so am I. 

So here's my speculation about the origin of coins, at least in the West:
I disagree about the invention of coins. Many ideas seem awfully simple in retrospect. But think about what was involved when the Lydians created their coins--the metallurgy, the concept of stamping the output with the king's image and symbolism, and the implementation of their usage. This had to be a calculated, thought-through step, and the Lydians had a very good reason for taking it, given that their source material, electrum, was an unpredictable mixture of gold and silver. The coin was how they standardized their money sufficiently to get Greek mercenaries to accept payment. I have read, and used Reden's book.

Keith
  
On Dec 20, 2012, at 5:20 AM, Rob Tye wrote:

> Good to get you conclusions Keith (if I may), we agree on the main outlines.
> I would add that many people ran quite active pre-coinage markets in the
> historic period – the Akan using gold dust in 19th century West Africa, the
> 9th century Vikings using silver (and probably copper) bullion, the 18th
> century Burmese using base metal bullion etc.  The pre-Columbian Mexicans
> apparently ran very active markets (primarily using cocoa beans as currency)
> and there are wall painting from Ancient Egypt which appear to show market
> stall holders.  Thus I find it entirely plausible that such activities had
> their roots lost in the mists of time, in the Neolithic if not the Palaeolithic.
> 
> That is to say,  Polanyi too was involved in spreading a lot of nonsense.
> 
> We also agree - the change - from markets being a subsidiary mechanism for
> distributing goods to being the primary mechanism, is coins.  Coins fuelled
> the rise of more meritocratic and thus more productive societies.  I would
> add two other hot spots where coin using polities arose early on, aside from
> the Aegean - North India and China..   I would further add I see it as a
> mistake to think of coins being invented.  The idea of coinage was too
> simple to need any inventing.  It is rather a matter of people being allowed
> to have them (this in line with Leslie Kurke)
> 
> The big puzzle here, it seems to me, is why has this very obvious story line
> been so frequently and thoroughly suppressed?  The story of this suppression
> is itself ancient.  Coins use seem to appear in Lydia around 610BC, and
> spread like wildfire, arriving in Athens about 550BC, and apparently
> transforming Athenian society.  Yet, as Kurke points out nobody even
> mentions coins exist in any text until about 460 BC.  The principle players
> in the rise of coin issue were apparently the early tyrants, the
> intellectuals associated with their early use the sophists – yet both
> "tyranny" and "sophistry" had gained pejorative overtones even in the
> ancient period.
> 
> More accessible is the suppression of this story over my own lifetime.  If
> the most obvious story line is true, then the early tyrants seems to have
> created something very like a social contract with their subject
> populations. It ran – ‘I give you coins, and allow you to spend them at
> markets, you use them to pay taxes, with which I defend the state, and
> police the markets etc’.
> 
> But anyone adopting this story line even today runs up against those aligned
> with Polanyi, who dislike, even detest, markets, and simultaneously, those
> aligned with Hayek, who very often clearly detest the state.  Thus if one
> argues that modern markets were deliberately created by states, issuing
> coins, one will get shot by both sides.  (As kids say today, “Been there –
> got the T-shirt”.)
> 
> I will check out your book – sounds good.  Have you looked at Sitta von
> Reden's 2010 parallel publication?  (‘Money in Classical Antiquity’)  On pp
> 10-11 she seems to me to be locating Moses Finley rather firmly in a
> specifically cold war context.
> 
> Rob Tye, York, UK