Silver was money before coins existed. Before banks, before paper, before anyone had a word for “currency.” For most of recorded history, if you wanted to store value, settle a debt, or buy something that mattered, you reached for silver. Not gold — gold was too scarce for everyday commerce. Not copper — too heavy, too common. Silver occupied the middle ground: rare enough to hold value, abundant enough to circulate.
This is the story of how one metal shaped civilization’s relationship with value. It spans four millennia, six continents, and more monetary crises than any modern central banker would care to count.
Mesopotamia and the Shekel (~3000-2000 BCE)
The story begins in the river valleys between the Tigris and Euphrates, where the first complex economies emerged. The Sumerians and later the Babylonians needed a way to account for debts, taxes, and trade — and they settled on silver.
The shekel was not originally a coin. It was a unit of weight: approximately 8.3 grams of silver. When a Babylonian merchant recorded that a shipment of grain was worth “two shekels,” he meant it was worth about 16.6 grams of silver — weighed on a balance scale, not counted as stamped pieces. Coinage was still two thousand years away.
This distinction matters. Silver functioned as money in Mesopotamia not because someone declared it legal tender, but because it solved practical problems. Temple economies — the large institutional centers that managed agricultural surplus, labor, and trade — needed a unit of account. Silver, which could be weighed precisely, divided easily, and did not corrode, served that purpose better than anything else available.
David Graeber, in Debt: The First 5,000 Years, argues that these early silver-based systems were primarily systems of accounting rather than systems of exchange — that most transactions were recorded as debts denominated in silver, with actual silver changing hands less frequently than the records might suggest. Whether or not you accept Graeber’s full argument, the archaeological evidence is clear: silver was the standard against which value was measured in the ancient Near East for over a thousand years before the first coin was struck.
The Code of Hammurabi (~1754 BCE) specifies fines, wages, and prices in silver shekels. A field laborer earned about 6-8 shekels per year. A house in Babylon might cost 5-10 shekels. These are among the oldest price records in human history, and they are denominated in silver.
The Lydian Revolution and Greek Coinage (~700-300 BCE)
Around 650-600 BCE, someone in the kingdom of Lydia — in what is now western Turkey — had an idea that would reshape commerce: stamp a standardized piece of metal with an official mark guaranteeing its weight and purity. The first coins were made of electrum, a natural alloy of gold and silver. But pure silver coins followed quickly, and they changed everything.
The leap from weighed silver to stamped silver was enormous. Instead of carrying a balance scale to every transaction and trusting that your trading partner’s weights were honest, you could glance at a coin, recognize the stamp, and trust the weight. Coinage didn’t change what money was — it changed how fast money could move.
The Athenian tetradrachm, bearing the owl of Athena, became the dominant trade coin of the classical Mediterranean world. Each coin contained approximately 17.2 grams of pure silver. Athens could mint these in quantity because it controlled the silver mines at Laurion, in southeastern Attica. Those mines — worked by enslaved laborers in brutal conditions — funded the Athenian navy, which defeated the Persians at Salamis (480 BCE), which secured Athenian dominance, which funded more mining. Silver was the engine of Athenian power.
The Athenian owls circulated far beyond Greece. Hoards have been found from Afghanistan to Sicily. They were accepted because their silver content was reliable — Athens maintained strict standards. When you held a tetradrachm, you held 17 grams of silver, period.
Rome and the Lessons of Debasement (~300 BCE-400 CE)
Rome inherited the Greek innovation and built an empire on it. The denarius, introduced around 211 BCE, was a silver coin weighing approximately 4.5 grams at roughly 95-98% purity. It became the backbone of Roman commerce, military pay, and taxation for centuries.
And then, slowly, it didn’t.
The story of the Roman denarius is one of the most instructive monetary case studies in history. As the empire expanded, its expenses — military campaigns, public works, the grain dole, bureaucratic salaries — grew faster than its revenue. The temptation was always the same: reduce the silver content of the coins while maintaining their face value. Get more coins from the same amount of silver.
Under Nero (54-68 CE), the denarius was reduced from about 98% silver to about 93%. Under Trajan (98-117 CE), it dropped further. By the reign of Septimius Severus (193-211 CE), it was roughly 50% silver. By the mid-third century, under Gallienus, some coins contained less than 5% silver — they were essentially bronze coins with a thin silver wash.
The consequences were predictable. Prices rose. People hoarded older, higher-purity coins and spent the debased ones — the dynamic later formalized as Gresham’s Law (“bad money drives out good”). The economy fragmented. Emperor Diocletian attempted to fix prices by decree in 301 CE with his famous Edict on Maximum Prices, threatening death for anyone charging above the specified rates. It failed. You cannot legislate away the effects of monetary debasement.
The Roman experience established a pattern that would repeat across civilizations: debase the currency, trigger inflation, attempt to control prices by force, fail. Silver’s purchasing power told the truth even when the coins lied about their content.
The Islamic Silver Dirham (700-1200 CE)
After Rome’s fall, the center of monetary sophistication shifted east. The Abbasid Caliphate (750-1258 CE), ruling from Baghdad, operated one of the most extensive silver-based monetary systems the world had seen.
The Islamic dirham — the name itself derived from the Greek drachma — was a silver coin weighing approximately 2.97 grams. Caliphal mints across the Islamic world produced dirhams to consistent standards, and the coins circulated from Spain to Central Asia. The dirham was, for several centuries, the closest thing the world had to an international currency.
The reach of Islamic silver trade is most dramatically illustrated by archaeology in an unexpected place: Scandinavia. Viking-era hoards discovered across Sweden, Denmark, and the Baltic contain enormous quantities of Islamic dirhams — tens of thousands of individual coins. The Spillings Hoard, found on the island of Gotland in 1999, contained approximately 14,295 Islamic coins alongside other silver objects, making it one of the largest Viking-era silver hoards ever discovered.
The mechanism was trade. Vikings traveled down the river systems of eastern Europe — the Volga, the Dnieper — reaching the Caspian and Black Sea regions where they traded furs, amber, slaves, and other goods for Islamic silver. The dirhams then flowed back to Scandinavia, where silver (whether as coins or as cut pieces of jewelry and ingots — “hacksilver”) served as the primary medium of exchange.
This was genuinely global trade, centuries before the word “globalization” existed.
The Spanish Pieces of Eight (1500-1800)
No chapter in silver’s monetary history is more dramatic — or more consequential — than the flood of New World silver that began in the 16th century.
In 1545, the Spanish discovered the Cerro Rico (“Rich Mountain”) at Potosi, in present-day Bolivia. It was the largest silver deposit the world had ever seen. At its peak in the early 17th century, Potosi was one of the largest cities in the world — larger than London, larger than Paris — entirely because of the silver beneath it. The human cost was staggering: indigenous forced labor (the mita system) and later African enslaved labor killed hundreds of thousands in the mines.
The silver that came out of Potosi and other New World mines — Mexico’s deposits were similarly enormous — was minted into the peso de ocho reales, the “piece of eight.” This coin, containing approximately 25.5 grams of silver, became the world’s first truly global currency. It circulated in Europe, Africa, the Americas, and across the Pacific to Asia. It was legal tender in the United States until 1857. The ”$” symbol itself likely derives from the markings on Spanish pieces of eight.
Dennis Flynn and Arturo Giraldez, the economic historians who have done the most rigorous work on early modern silver flows, argue that the Manila galleon trade — which shipped Mexican silver across the Pacific to the Philippines and thence to China — represents the true birth of the global economy. China’s economy ran on silver: the Ming dynasty had adopted silver as its primary tax medium, and its enormous, productive economy absorbed vast quantities of the metal. Spanish America produced the silver; China consumed it; and the trade routes between them connected the world’s economies for the first time.
Back in Europe, the influx of New World silver triggered what historians call the “price revolution”: a sustained, centuries-long rise in prices across the continent. Prices in Spain roughly quadrupled between 1500 and 1650. The mechanism was straightforward: dramatically more silver chasing roughly the same quantity of goods. It was monetary inflation, powered not by a printing press but by a mountain in Bolivia.
Bimetallism and the Young Republic (1792-1873)
When Alexander Hamilton designed the monetary system of the newly independent United States, he chose a bimetallic standard: both gold and silver would serve as money, at a fixed ratio. The Coinage Act of 1792 set the ratio at 15 ounces of silver to 1 ounce of gold. A silver dollar contained 371.25 grains (approximately 24.1 grams) of pure silver.
The problem with bimetallism is that it requires the legal ratio to match the market ratio — and markets move. If the market values gold at 16:1 relative to silver, but the mint offers 15:1, then gold is undervalued at the mint. Holders of gold will spend their gold coins (which are worth more as metal than as money) and hoard their silver. Gresham’s Law, again.
This is exactly what happened. By the 1830s and 1840s, silver coins were being exported and melted because silver’s market value exceeded its monetary value. Gold discoveries in California (1848) then shifted the ratio further, making silver relatively more valuable. Congress adjusted, passing the Coinage Act of 1853 to reduce the silver content of subsidiary coins. The system was under constant strain.
The decisive moment came in 1873. The Coinage Act of 1873 effectively demonetized silver by omitting the standard silver dollar from the list of authorized coins. Silver producers and advocates, particularly in the mining states of the American West, were outraged. They called it the “Crime of ‘73” — a conspiracy by Eastern banking interests and goldbugs to destroy silver money and enrich creditors at the expense of debtors and farmers.
The political earthquake was real. The demonetization of silver became the defining economic issue in American politics for a generation. It culminated in William Jennings Bryan’s legendary speech at the 1896 Democratic National Convention: “You shall not crucify mankind upon a cross of gold.” Bryan lost the election — twice — and gold won. The United States formally adopted the gold standard in 1900.
But the passions Bryan channeled were not irrational. Demonetizing silver was deflationary: it reduced the money supply, increased the real burden of debts, and punished farmers and debtors who had borrowed in cheaper dollars and now had to repay in dearer ones. The “Crime of ‘73” was not a conspiracy, but its effects were real and fell hardest on people who could least afford them.
The Long Decline (1873-1964)
With silver’s demonetization, the metal began a long retreat from monetary relevance. The gold standard era (roughly 1870s-1930s) treated silver as subsidiary coinage at best — useful for small change, but no longer the foundation of the monetary system.
Silver had a few last gasps. Franklin Roosevelt’s Silver Purchase Act of 1934, responding to pressure from silver-state senators, directed the Treasury to buy silver until it reached one-quarter of the monetary reserve or until silver hit $1.29 per ounce (its old monetary value). The program was economically dubious — it drained silver from China and Mexico, causing monetary disruption in those countries — but it propped up the domestic silver price for years.
The final chapter was quiet. Silver certificates — paper dollars redeemable for physical silver — continued to circulate in the United States through the early 1960s. President Kennedy signed legislation in 1963 authorizing the Federal Reserve to issue small-denomination notes, effectively replacing silver certificates. The last redemptions were honored in June 1968.
And in 1964, the U.S. Mint produced its last circulating silver coins. The following year, the Coinage Act of 1965 eliminated silver from dimes and quarters entirely and reduced the half dollar from 90% to 40% silver (it went to zero silver in 1971). The reason was simple: rising silver prices meant the metal in the coins was worth more than the coins’ face value. People were melting them. Gresham’s Law, one last time.
If you hold a pre-1965 U.S. dime, you hold 2.25 grams of silver. At today’s prices, the metal alone is worth many times the coin’s 10-cent face value. That gap — between what the coin says it’s worth and what the silver in it is actually worth — is a compressed history lesson about what happens when governments try to fix the price of money and markets disagree.
The Modern Era (1971-Present)
On August 15, 1971, President Nixon suspended the convertibility of the U.S. dollar into gold, ending the last formal link between any major currency and precious metals. Silver had already been cut loose from the monetary system years earlier, but Nixon’s decision completed the transformation: for the first time in recorded history, no major economy’s money was backed by metal of any kind.
Silver became a free-floating commodity — its price set by supply and demand rather than by government decree. And almost immediately, the price became volatile in ways it never had been under fixed monetary systems.
The most spectacular episode was the Hunt Brothers silver corner of 1979-1980. Nelson Bunker Hunt and William Herbert Hunt, Texas oil billionaires, accumulated enormous positions in silver futures and physical silver, driving the price from around $6 per ounce in early 1979 to an intraday peak near $50 in January 1980. The COMEX exchange then changed its rules — restricting trading to “liquidation only” — and the price collapsed. The Hunts eventually declared bankruptcy.
Silver spent most of the 1980s and 1990s in the doldrums, trading in the $4-6 range. It began rising again in the 2000s, part of a broader commodities bull market, and spiked to nearly $50 again in April 2011 before pulling back. The 2011 rally was driven by a mix of investment demand, industrial demand growth, and post-financial-crisis monetary anxiety.
Today, silver occupies a unique dual identity. It is an industrial metal — essential for solar panels, electronics, medical devices, and electric vehicles — with roughly 50-55% of annual demand coming from industrial uses. And it is still, stubbornly, a monetary metal: people buy silver coins and bars as a store of value, central banks occasionally hold it, and its price still responds to the same monetary anxieties (inflation, currency debasement, fiscal irresponsibility) that have driven silver demand for millennia.
That duality is what distinguishes silver from gold. Gold is primarily monetary and ornamental; its industrial uses are minor. Silver is both — genuinely needed by industry AND held as money by millions of people worldwide. This creates a structural tension in the silver market that does not exist for gold: industrial demand competes with monetary demand for a supply that is largely produced as a byproduct of other mining.
The Metal That Remembers
Silver’s monetary story is not over. It has merely entered a new chapter — one without precedent.
For 4,000 years, silver was money because it had the right physical properties: durable, divisible, portable, recognizable, and scarce enough to hold value. Every civilization that discovered it independently arrived at the same conclusion. Sumerians, Greeks, Romans, Arabs, Vikings, Spaniards, Americans — they all reached for silver.
The 20th century severed the formal link between silver and money. But it did not sever the instinct. People still stack silver. They still feel, in a way that is difficult to articulate in purely economic terms, that a metal coin is more “real” than a number on a screen. That instinct has 4,000 years of history behind it. Whether it is wisdom or nostalgia depends on what happens next.
What is new is this: the metal that was money for four millennia is now also the metal inside your solar panels, your smartphone, your electric vehicle, and your hospital’s wound dressings. Silver has become industrially indispensable at the exact moment that its monetary role is being questioned. That tension — between silver the commodity and silver the money — is the defining feature of the metal’s modern story. And it is what makes silver’s next chapter so genuinely interesting.
Sources
[1] David Graeber, Debt: The First 5,000 Years (Melville House, 2011). Primary reference for Mesopotamian silver-as-accounting and the origins of money.
[2] Dennis O. Flynn and Arturo Giraldez, “Born with a ‘Silver Spoon’: The Origin of World Trade in 1571,” Journal of World History 6, no. 2 (1995): 201-221. Foundational paper on Spanish silver and the birth of global trade.
[3] Dennis O. Flynn and Arturo Giraldez, eds., Metals and Monies in an Emerging Global Economy (Ashgate, 1997). Collected essays on early modern silver flows.
[4] The British Museum, collections and educational resources on Lydian coinage, Athenian tetradrachms, and Roman denarii. britishmuseum.org (URL unverified)
[5] Kenneth W. Harl, Coinage in the Roman Economy, 300 B.C. to A.D. 700 (Johns Hopkins University Press, 1996). Standard academic reference for Roman monetary debasement.
[6] Thomas S. Noonan, “The Islamic World, Russia and the Vikings, 750-900: The Numismatic Evidence,” (Ashgate, 1998). On Islamic dirham circulation in Scandinavia and Viking-era trade networks.
[7] Kris Lane, Potosi: The Silver City That Changed the World (University of California Press, 2019). Narrative history of Potosi and New World silver production.
[8] Milton Friedman, “The Crime of 1873,” Journal of Political Economy 98, no. 6 (1990): 1159-1194. Economic analysis of U.S. silver demonetization.
[9] U.S. Geological Survey, “Mineral Commodity Summaries: Silver,” various years. usgs.gov
[10] The Silver Institute / Metals Focus, World Silver Survey (annual). Data on modern silver supply, demand, and industrial consumption. silverinstitute.org