The Volume of Trade in the Time of Charlemagne

From page 97 of John J. Butt's Daily Life in the Age of Charlemagne:

Some historians have seen the main purpose of coins in the eighth and ninth centuries as stored value because many of the coins that have been discovered have been in buried hoarded collections and because many of the Carolingian coins look relatively new and unworn. However, the coins that are discovered are often likely to be ones buried in a hoard. It is less common to find individual coins and unlikely that bog people will be discovered with pockets loaded with coins. Second, Carolingian coins were struck or minted very carefully and very heavily, meaning that the dies for casting were cut deeply. This produced coins with high and sharp relief. Therefore, they often still look in mint condition. These coins were not meant just for the nobility nor as a means for saving value, for they were minted in a number of locations around the kingdom, including Aachen, Amiens, Quentovic, Rheims, Rouen, Paris, Lyon, Strasbourg, Verdun, Melle, Milan, Pavia, Dinant, Maastricht, and Dorestad. Charlemagne tried to consolidate minting to the royal palace at Aachen, but was unsuccessful in doing so.

The existence of so many mints indicates that coins were needed regularly and continuously around the kingdom, and there could be no other purpose than trade that would require such continuous supply of coins. Some historians have suggested that the purpose of coins was for hoarding of treasure or that they were used solely by large-scale merchants, but the number of coins in circulation proves that coinage was primarily for regular trade.

There has been a great deal of debate about the number of coins that were in circulation in the Carolingian Empire. An estimate has been made for the number of coins minted in Mercia (England) under King Offa, a contemporary of Charlemagne, of 6.7 million. Estimates would suggest that the number of coins minted during Charlemagne's reign was considerably larger than this, perhaps several times this. Even 10 million coins would provide numbers far beyond savings of treasure and even beyond use by a few large-scale merchants. Numbers such as these would suggest that many people were using coins on a regular basis for everyday trade.

"Bog people". I like that.

The first paragraph I have no trouble with. Coins are likely to be discovered in hoards. Sure. The coins had sharp relief. Okay. Coins were minted in several places. Fine.

The second and third paragraphs excerpted here are a single paragraph in the original.

"The existence of so many mints," John Butt writes, "indicates that coins were needed regularly and continuously around the kingdom". Maybe. Or maybe it was a sign of prestige to have a mint: Maybe it meant the King liked you better, and every liege lord wanted one. Maybe Charlemagne handed out mints for good behavior.

I'm no historian. I just poke things with a stick. But the reading I've done must have been from works written by some of those "some historians" who said the main purpose of coins was to store value, because I think there was a lot of that in Charlemagne's time. I think Charlemagne tried to stimulate the economy. I think either he changed that trend or he lived at a time when the trend was starting to change. (Or more likely both.) But I think it's incorrect to convey the idea that the volume of trade then was in any sense comparable to trade today. I think John Butt's argument is weak.

Why is it "unlikely that bog people will be discovered with pockets loaded with coins"? Perhaps because those people used coins far less than John Butt says!

I think people have a tendency to interpret things in terms they understand. The economy was different in Charlemagne's time than it is today. I think John Butt is interpreting Charlemagne's economy in modern terms. From long before the fall of Rome, hoarding had been the way of the world. The hoarding mentality was the economic challenge Charlemagne faced. John Butt doesn't see it.

"[T]here could be no other purpose than trade that would require such continuous supply of coins," he says. Certainly there could be other purposes -- hoarding, for one. I have previously quoted the historian Ferdinand Lot:

After the end of the seventh century, the issue of gold coins slowed down and then completely disappeared... In the eighth century even silver money tended to pass out of currency, at least in the Rhine districts, payments being made in grain, cattle, horses, etc., rather than in metal specie.

As coin went out of circulation, it went into hoards. Or it went to other lands. I have previously quoted the historian Marc Bloch:

The life of the Europe of the first feudal age was not entirely self-contained. There was more than one current of exchange between it and the neighbouring civilizations...

Not only was this trade restricted to very few routes; it was also extremely small in volume. What is worse, the balance of trade seems to have been distinctly unfavourable -- at any rate with the East.

The profits of the slave-trade, in general fairly small, were not sufficient to pay for the purchase of precious goods and spices in the markets of the Byzantine world, of Egypt or of nearer Asia. The result was a slow drain of silver and above all of gold. If a few merchants unquestionably owed their prosperity to these remote transactions, society as a whole owed scarcely anything to them except one more reason for being short of specie.

However, money was never wholly absent from business transactions in feudal Europe, even among the peasant classes, and it never ceased to be employed as a standard of exchange. Payments were often made in produce; but the produce was normally valued item by item in such a way that the total of these reckonings corresponded with a stipulated price in pounds, shillings and pence.

The weakness of trade and of monetary circulation had a further consequence of the gravest kind. It reduced to insignificance the social function of wages. The latter requires that the employer should have at his disposal an adequate currency, the source of which is not in danger of drying up at any moment; on the side of the wage-earner it requires the certainty of being able to employ the money thus received in procuring for himself the necessities of life. Both these conditions were absent in the first feudal age.

John Butt says "These coins were not meant just for the nobility nor as a means for saving value... The existence of so many mints indicates that coins were needed regularly and continuously around the kingdom... [T]he number of coins in circulation proves that coinage was primarily for regular trade... [M]any people were using coins on a regular basis for everyday trade."

Marc Bloch says "money was never wholly absent". Bloch says money values were used to measure value in barter exchanges. That's not the same as using coin for "everyday trade". Not by our standards.

If every Harry Serf and his brother were engaged in trade, where did they get the coin? There were no wages. There was no Robin Hood. Oh, there was still trade, sure -- at the top of the heap. Just like today we have asset price inflation while the real economy languishes. Take the trends of our time and run with them for some hundreds of years, and you'll get a feel for the nature and volume of trade in the time of Charlemagne.


Again, John Butt:

The existence of so many mints indicates that coins were needed regularly and continuously around the kingdom, and there could be no other purpose than trade that would require such continuous supply of coins.

Maybe minting of coins was Charlemagne's version of Quantitative Easing. He was trying to restore the economy. He was trying to get money circulating. Like Ben Bernanke, Charlemagne knew that for money to circulate, money had to be made available. So, like Bernanke, he made money available.

If much of that money sat idle in hoards, it must have come as no surprise.

I wonder if they called it "excess reserves" in those days.