There is a story in the Bible about a Pharaoh having bad dreams his advisors could not explain. He dreamt about seven fat cows being eaten by seven lean cows and seven full ears of grain being devoured by seven thin and blasted ears of grain. Joseph explained those dreams. He told the Pharaoh that seven years with good harvests would come followed by seven years with poor harvests. He advised the Egyptians to store food. They followed his advice and built storehouses for grain. In this way Egypt survived the seven years of scarcity.1
The food storage resulted in a financial system. The historian Friedrich Preisigke discovered that the Egyptians used grain receipts for money.2 Farmers bringing in the food received receipts for grain. Bakers who wanted to make bread, brought in the receipts which could be exchanged for grain. According to the Bible, Joseph took all the money from the Egyptians.3 And so the grain receipts may have become money instead.
The storage cost of the grain were settled when the receipts were exchanged for grain. In this way the receipts gradually lost value over time. It was similar to buying stamps to keep the money valid as happened in Wörgl. During the reign of Ramesses the Great, Egypt became a leading power again. Some historians have suggested that Egypt’s wealth during the reign of Ramesses was built upon the grain money.
The money remained in circulation after the introduction of coins around 400 BC until the Romans conquered Egypt around 40 BC. The grain money survived for more than a thousand years. It suggests that a holding fee on money and negative interest rates can create a stable financial system that lasts forever.
The Bible provides an explanation as to how the Egyptian grain storage financial system might have come to be even though it is generally assumed that this story is fiction. The Bible and the Quran also condemn charging interest. That is not so remarkable as several ancient philosophers and religions did the same. Still, there appears to be a link between interest-free money with a holding tax and the Abrahamic religions.
Featured image: Joseph interpreting the Pharaoh’s dream. Illustrations for La Grande Bible de Tours. Gustave Doré (1866). Public Domain.