Athens Debases Its Coinage

406 BCE — Aegean, Athens

Today: Athens, Greece

Broke and losing the war after the Sicilian disaster, Athens melted down the gold statues of victory on the Acropolis and issued bronze coins with a thin silver plating, declaring them equal to the silver drachma that had been the trusted currency of the Aegean. Athenians hoarded the real coins and spent the fakes. A comedy staged that year has a chorus complain that the city treats its money the way it treats its politicians — preferring the debased new ones to the sound old ones. The good money vanished from circulation within a year.

Worth knowing: Aristophanes put the observation on stage in 405 BCE: the city keeps its worst coins in circulation and its best ones hidden, and does exactly the same with its leaders. It is the oldest surviving statement of what economists would later name Gresham's Law — delivered as a joke.

Pattern: Monetary debasement — A money's intrinsic or backed value is diluted to fund obligations; confidence in it erodes, often into inflation.

Entry 53 of 240 in Precedent, a walk through the whole human story in order.