Changes

We often take our economic and larger social system in the West as something given or that can be accepted without much questioning with regards to its origin or how it came about. One area that is so vital for the modern world is banking, including investment, we often associated with buying and selling of stocks and securities, and loans.<ref> For a recent history of investment banking, see: Bonin, Hubert, and Carlo Brambilla, eds. 2014. ''Investment Banking History: National and Comparative Issues (19th-21st Centuries)''. Euroclio. Studies and Documents, no. 78. Bruxelles: P.I.E. Peter Lang.</ref> However, this system developed over thousands of years and the first traces of investing in trade, what effectively were family-run business, and forms of investment banking appear in the ancient Near East.

==Bronze Age Investments==

Investments and trade have an early historical root in the ancient Near East. Perhaps one of the earliest examples of long-distance trade and banking occurred in Anatolia, modern day Turkey, sometime slightly before 2000 BC and lasted for nearly 200 years. This is seen in the ancient city of Kaneš, or modern Kültepe, an archaeological site in central Turkey.<ref>For a recent historical analysis of the Kaneš trade colony and region, see: Barjamovic, Gojko. 2011. ''A Historical Geography of Anatolia in the Old Assyrian Colony Period''. CNI Publications 38. Copenhagen: Carsten Niebuhr Institute of Near Eastern Studies, University of Copenhagen : Museum Tusculanum Press.</ref> This ancient city was known to have been a major trading hub for the region that had a group of Assyrian settlers from the ancient city of Aššur who had settled in the area (Figure 1). These Assyrians created one of the earliest well-documented forms of private trade we know of. These early traders created an amicable relationship with the local population, whereby textiles brought from Assyria, located in modern northern Iraq, were traded for silver, copper, and tin.<ref>For information about items traded and colonies established by Assyrians see: Larsen, Mogens Trolle. 1976. ''The Old Assyrian City-State and Its Colonies''. Mesopotamia, v. 4. Copenhagen: Akademisk Forlag : [eksp., DBK].</ref>

The trade colonies at Kaneš and other nearby towns were often not only conducted by private individuals and households, but they also were opportunities for people to invest in. For instance, texts show that trade caravans were invested by individuals before they set out on journeys. Families would often unite or form trading partnerships so that risk was shared and any loss of cargo would not drastically affect any one trader. While rich profits are shown in these trade transactions, they also came at a high cost, as there was a threat that caravans would be attacked and prices were often relatively high. This likely reflects that the trade for metals in particular may have revolved around elites and not the normal segments of the population.<ref>For a discussion on commodity prices and threat of attacks see: Larsen, Mogens Trolle. 2015. ''Ancient Kanesh: A Merchant Colony in Bronze Age Anatolia''. New York: Cambridge University. Press.</ref> Trade also involved direct transactions of commodities, such as silver and textiles, to be traded for the other. In essence, more abstract forms of business, such as the concept of money, were not yet developed, although metals were already beginning to be considered as a commodity that can be exchanged for a wide variety of goods. In particular, as metals do not decay and have high value, they formed a convenient material for trade to different goods.

Such trade, however, characterized the Bronze Age (3000-1200 BC), which was a period of many small states or empires that were ephemeral or short-lived, with numerous conflicts between states. In essence, there was relatively high political instability in the Near East, which caused the trade to be somewhat confined in geographic scope and relatively expensive.<ref>For a discussion on the conflicts and kingdoms of the Bronze Age Near East see: Van de Mieroop, Marc. 2016. ''A History of the Ancient Near East Ca. 3000-323 BC.'' Third edition. Chichester, West Sussex, UK: John Wiley & Sons Inc.</ref>

==New Empires and Banking==

This changed during the rise of major empires starting in the 8th century BC. With the rise of the Assyrian Empire (911-609 BC), the so-called Neo-Assyrians, and the subsequent rise of the Neo-Babylonian (626-539 BC) and Persian (or Achaemenid (c. 550-330 BC) empires, we begin to see patterns were there were much larger states encompassing much of the region.<ref>For a general discussion on some of these large and successive empires see: Cline, Eric H., and Mark W. Graham. 2011.''Ancient Empires: From Mesopotamia to the Rise of Islam.'' Cambridge ; New York: Cambridge University Press.</ref> These larger states also replaced other large states, enabling much greater stability in the region and more unity between cultural groups. Additionally, populations began to move in much greater numbers, intermixing the ethnic makeup of many towns. These intermixed communities soon formed links that facilitated exchange between them and their areas of origin.

For the next 2500 years after the initial rise of the Achaemenids, the Near East witnessed a succession of large states and empires, although most were not nearly as large as the Achaemendis. When Alexander the Great conquers the Persian Achaemenids in 333 BC, what is telling is how only a few states were created to cover all the land between Greece and India, Egypt, Arabia, the Caucusus, Iran, and Central Asia. In essence, much of this part of the world was now relatively united and trading actively.<ref>For a discussion on the Seleucids and their contermporaries, which succeeded Alexander the Great, see: Makowiec, Jadwiga, ed. 2011. ''New studies on the Seleucids.'' Wyd. 1. Electrum 18. Kraków: Wydawn. Uniw. Jagiellońskiego.</ref>

By the time of the Parthian (247 BC – 224 CE) king, Mithradates II, we now know of a Near Eastern king to have established political and diplomatic relations with a Chinese emperor, to whom the Parthian king sent an ambassador.<ref> For a discussions on the Parthians, see: Wolski, Joséf. 1993. ''L’empire des Arsacides''. Louvain: Peeters.</ref>. This act paved the way for the establishment of long-distance trade contacts with China and laid the basis for the Silk Road along which silk was traded from China up to the Mediterranean, crossing Parthian lands (Figure 4). In addition to the overland trade routes, a maritime route was also opened through the Indian Ocean, perhaps facilitated by extension of Parthian control over the western shores of the Persian Gulf, though this extension is suggested by mostly archaeological remains.<ref>For further details on trade activities in this period see: Grajetzki, Wolfram 2011. ''Greek and Parthians in Mesopotamia and Beyond''. Bristol: Bristol Classical.</ref>

In the 1st century AD, one would only have to travel through four countries to go from Britain to China. In short, the ancient world had become an early version of globalization. People from different cultures began to benefit from this trade and participate more actively. Products were moving far and wide. Incense and silk were moving all across the Old World, while coins were now found in all of Europe, Asia, and northern Africa. Coinage, in the 6th century BC, had been a localized development found in the Eastern Mediterranean only, but by the 3rd century BC it was spread to much of Europe, the Near East, India, and China.

==The Role of Money and Coinage in the Economy==

Coinage, therefore, was a convenient representation of what can be exchanged easily across vast areas under the aegis of a unifying state. This allowed money to flow at much greater quantities in later periods and made banking and investments a fixed feature of the economic landscape. In essence, capital in the form of coinage becomes of great utility with the rise of empires in the Near East, as it was able to flow across distances with far less hindrances from numerous political actors disrupting trade flow, such as that seen in the Bronze Age. This also allowed a range of commodities to be traded in far away regions, including silk from China arriving in the Near East and reaching Rome, all the while forms of investment banking was beginning to flourish.<ref>For information on the trade in silk and the Silk Road establishment, see: ''The Roman Empire and the Silk Routes The Ancient World Economy and the Empires of Parthia, Central Asia and Han China''. 2015. Pen & Sword.</ref> Financial investments began to facilitate the trade of luxury goods at an international scale, covering the known world and linking people who had never been previously linked. <ref>For more information on financial investments in the role of trade, see: McLaughlin, Raoul. 2010. Rome and the Distant East: Trade Routes to the Ancient Lands of Arabia, India and China. London ; New York: Continuum.</ref>

==Conclusion==

While we see in the early Bronze Age (3000-1200 BC) hints of what we would eventually call investment banking whereby individuals would invest and finance trade partnerships and attempt to reap handsome rewards, this form of investment only begins to develop more substantially with the rise of empires. The Achaemenids were the first great empire to utilize coinage, although the invention of coins may have occurred in the Aegean world. The key development, however, is that empires allowed the free flow of investments to occur, as we see with the Murashu family initially, one of history’s first true investment firms. They were able to establish branches of trade and finance banks in southern Mesopotamia and Elam thanks to the peace afforded by the Achaemenid Empire.

[[Category:Economic History]] [[Category:Ancient History]] [[Category:Bronze Age History]]

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