How Cleopatra Turned Money into a Story

Money’s a fiction. These days, it’s barely physical and banks are the storytellers-in-chief. Say you move 50 dollars into your savings. It’s there, on your statement. Except it’s not, because the bank isn’t going to just sit on it. Instead, it’ll lend it to a woman who just put an offer on an apartment three states away. Now you have 50 bucks in your account and she has 50 bucks in her account. And just like that, there’s brand new money in the economy.

What’s bizarre is that we all trust this story. The system runs — for the most part. Sometimes it gripes, panic sets in, and some people start clamoring for money to be tied to gold, like it used to.

Because money wasn’t always a story. You could feel it, see it, touch it. First, we bartered — two chickens for a bushel of wheat. But then we began to exchange stuff for amounts of metal sliced into coins — bronze, mainly. Their weight was the value of what you were buying.

That was fine, until it wasn’t. Scales were imprecise, bronze coins weren’t all the same. Wise guys scammed their customers with tricked scales, others would shave the edges off the coins, collect the shavings and make new coins. Translation: inflation plagued the market, which wasn’t great — especially in areas of the world that produced food for entire empires, like Egypt.

In comes Cleopatra VII, last of the Ptolemies. The Cleopatra, whom the Romans painted as a conniving harlot. They never forgave her for seducing two of their leaders. They may have also hated that this Greek-Egyptian illegitimate daughter of a weak king turned out to be an exceptional ruler.

The Ptolemies before her were the laissez-faire type, so inflation ran amok. But that was bad for trade, plus Cleopatra wanted an economy that worked for most of her subjects. People going hungry in the cradle of agriculture? She wasn’t going to have that.

Her solution was elegant: she had the value of the coins stamped on the bronze coins. Ignore their weight, she said, just trust what we tell you they’re worth. She slapped her profile on the coins to hammer this home (and so people would know who was boss). She also pegged these coins’ value to the currency of reference, the Roman Denarius, a bit like China pegs the yuan to the U.S. dollar. This was the first recorded instance of monetary interventionism.

We’ve taken her idea and run with it. Two millennia later, Cleopatra is the reason a trillion-dollar coin is even plausible. The only thing we care about is the value stamped on currency. It matters so much, we hardly need coins anymore.

So as we try to make sense of inflation, interest rates, runs on banks, crypto currencies, debt ceiling fights… just think of what Cleopatra set in motion, from Alexandria to central banks, to retail banks everywhere. She took money, gave it a story, and humans never looked back.

Not bad, for a conniving harlot.