Silver¶
Silver has served as one of the primary forms of money throughout human history, second only to gold in longevity and acceptance. Like gold, silver possesses the essential properties of good money, making it suitable for use as currency across civilizations and millennia.
Properties as Money¶
Silver was a preferred metal for coinage in many ancient civilizations due to several inherent advantages:
Intrinsic Value: Silver possessed worth independent of its use as currency, valued for jewelry, decoration, and various practical applications.
Durability: Silver does not corrode easily, ensuring coins maintain their value over time.
Divisibility: Silver can be separated into smaller units, allowing for practical transactions of varying sizes.
Availability: Silver is scarce enough to be valuable but not so rare as to be inaccessible—more abundant than gold but less common than base metals like copper or iron.
The Roman Denarius¶
The denarius stands as one of history's most important silver coins, used in the Roman Republic and Roman Empire from the 3rd century BC until the 3rd century AD. It was the most common coin in circulation and was used for daily transactions, paying soldiers, and compensating government officials.
Original Specifications: The denarius typically weighed between 2.5 and 3.5 grams with a diameter of 18-20 millimeters. Initially, it was made of a silver alloy containing approximately 95% pure silver. The obverse side featured images of Roman gods or goddesses such as Jupiter or Minerva, while the reverse showed various designs including animals, ships, or military victories.
Progressive Debasement¶
The denarius provides a textbook case study in currency debasement and Gresham's Law:
By the time Marcus Aurelius became emperor in 161 AD, the denarius contained only 75% silver. His son Commodus, who succeeded him in 180 AD, continued the debasement. The movie Gladiator portrays Commodus as a cruel and unstable megalomaniac—a characterization with historical basis.
One of Commodus's first acts as emperor was debasing the denarius, a practice he would repeat to pay soldiers for their loyalty and protection. Over the following centuries, the silver content dropped dramatically—from 95% silver to under 5%—a decline spanning approximately three centuries.
Economic and Political Consequences¶
The debasement of the denarius had catastrophic effects on the Roman economy and political stability. As the silver content decreased while face value remained the same, Gresham's Law took hold: people hoarded the older, higher-quality coins and spent the debased ones.
Commodus's monetary policy contributed to his downfall. Twelve years into his reign, his mistress Marcia discovered her name on his hit list. She poisoned his wine at a New Year's Eve party. When the poison proved insufficient, Commodus retreated to his bath, where his wrestling trainer Narcissus strangled him with bare hands.
This pattern repeated with subsequent emperors. Pertinax, Commodus's successor, was assassinated after only three months by the Praetorian Guard, who had received only half their promised pay. Didius Julianus immediately devalued the Roman currency and was killed after a mere 66 days of ruling. Successors including Septimus Severus, Caracalla, Elagabalus, and Alexander Severus were all killed by their own guards.
By 476 AD, with worthless money, no stable government, and unpaid soldiers, the Roman Empire was overrun by Germanic tribes including the Visigoths and Vandals. The Western Roman Empire collapsed completely.
Silver in Other Monetary Systems¶
The Athenian Tetradrachm: Circulated 510-38 BC, this silver coin maintained relatively consistent silver content and became the standard currency throughout the ancient Mediterranean world. Even when Athens debased its coinage during the Peloponnesian Wars (431-404 BC), the Tetradrachm retained its reputation due to design stability and historical significance.
Bimetallic Standards: Many nations attempted to use both gold and silver as money with fixed exchange ratios. The United States, for example, established a mint ratio of 16 ounces of silver to 1 ounce of gold. These systems inevitably failed due to Gresham's Law—when market values diverged from official ratios, people hoarded the undervalued metal and spent the overvalued one.
Relationship to Gold¶
Throughout most of monetary history, silver served alongside gold, typically in a subordinate role. Gold's superior resistance to tarnishing and its greater scarcity made it more valuable and prestigious. Various historical mint ratios attempted to peg silver's value to gold's, but these fixed ratios created economic distortions when market values shifted.
Decline as Money¶
Like gold, silver is no longer used as a primary medium of exchange in modern economies. The shift away from precious metal currency began in earnest with the widespread adoption of paper fiat currency and continued with the complete abandonment of commodity-backed money following the collapse of Bretton Woods in 1971.
Modern Uses¶
Today, silver retains value but primarily serves in:
- Industrial applications (electronics, solar panels, medical equipment)
- Investment vehicles (coins, bars, exchange-traded funds)
- Jewelry and decorative arts
- Limited commemorative coinage
The history of silver as money—from its peak as the foundation of the Roman economy to its debasement and the empire's subsequent collapse—demonstrates both the power of commodity money and the dangers of currency debasement.