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Data can be currency, just like salt

We are living in times where I often talk about data being our new currency, and that data is more valuable than money or gold in the context of modern life.

This may sound like a joke, but historically we have often migrated value and meaning from different objects as our means of trade.

In early civilisations, sea shells and beads were key currencies and I often refer to the Yap Islands in presentations, where large stones are viewed as the sign of wealth.

Historically, however, no substance has been more valued than salt.

Yep, salt.

Salt is something we liberally sprinkle over food today because industrial processing allows us to have an abundance of salt but, in history, it was the most valued source of wealth.

In 2200 BC, the Chinese emperor Hsia Yu levied one of the first known taxes. He taxed salt. In Tibet, Marco Polo noted that tiny cakes of salt were pressed with images of the Grand Khan and used as coins. Salt is still used as money among the nomads of Ethiopia's Danakil Plains.

Greek slave traders often bartered salt for slaves, giving rise to the expression that someone was “not worth his salt”, with Homer calling it divine and Plato saying that salt is a “substance dear to the gods”.

Roman legionnaires were paid in salt rations known as ‘solarium argentums’ also known as a ‘salarium’, the Latin origin of the word “salary”.

Jesus said, “Ye are the salt of the earth”, and Leonard da Vinci sent a subtle message about purity lost when he painted ‘The Last Supper’ with an overturned salt cellar before Judas.

Venice fought and won a war with Genoa over salt. However, Genoese Christopher Columbus and Giovanni Caboto would later destroy the Mediterranean trade by introducing the New World to the market.

Charles of Anjou levied the ‘gabelle’, a salt tax, in France in 1259 to finance his conquest of the Kingdom of Naples. The revolutionaries eliminated the tax shortly after Louis XVI fell, the Republic of France re-established the gabelle in the early 19th Century; only in 1946 was it removed from the books.

Thousands of Napoleon’s troops died during his retreat from Moscow because their wounds would not heal due to a lack of salt.  The human body contains about 4 ounces (113 grams) of salt and, without enough of it, muscles won’t contract, blood won’t circulate, food won’t digest and the heart won’t beat a beat.

The salt mines of Poland led to a vast kingdom in the 16th century, only to be destroyed when Germans brought in sea salt which, to most of the world, is considered superior to rock salt.

Trade routes such as the ancient Via Salaria, which led from northern Italy to the Adriatic Sea, were used to transport the valuable seasoning inland from the coast and brought riches and prosperity to the bordering cities. These towns were often named for the white mineral: “Salz”, the German word for salt, which gave Salzburg and Salzgitter their names.

The Erie Canal connecting the Great Lakes to New York's Hudson River in 1825, was called “the ditch that salt built”, as salt tax revenues paid for half the cost of construction of the canal.

The British monarchy supported itself with high salt taxes, leading to a bustling black market for the white crystal. In 1785, the earl of Dundonald wrote that every year in England, 10,000 people were arrested for salt smuggling.  Maybe that’s why Shakespeare mentions salt 17 times in his plays.

Liverpool rose from just a small English port to become the prime exporting port for the salt dug in the great Cheshire salt mines and thus became the entrepôt for much of the world's salt in the 19th century.

Finally, in many countries, there is a New Year tradition where people open the back door to let the old year out, and the front door to let in a dark haired man carrying bread, coal and salt, representing enough to eat (bread), enough to be warm (coal) and enough money (salt) for the following  year.

So you can see it’s special and has only been devalued in importance thanks to the industrial processing of salt, which allows all of us to enjoy the abundance of the 40 million tonnes we require each year to be produced to give us our daily seasoning.

The reason for discussing this is partly to think of money as being anything from data to gold to salt, as it’s all about the exchange of value.

In economic terms, what has value is based upon scarcity, and salt had scarcity historically which is why it was more valued than gold.  Today, it has abundance, and hence is cheap.

Now data has abundance, and so is also cheap.  But information is power, and so it’s what you make of the data that has scarcity.  In other words, turning data into knowledge is where the value lies today, just as turning rock and sea water into salt had value in ancient history.

“There are means of payment which are not yet money; then there those which are money; later still, those which have ceased to be money.”  Georg Friedrich Knapp, 1924

The other reason for the history lesson is that, like the Knights of the Round Table, I was reminded of the value of salt when my colleague mentioned a fairy-tale by the Brothers Grimm about salt.

The story is about Princess Mouseskin, and was published in the first edition of their Children’s and Household Tales.

The story goes that the King wants to know how much his daughters love him.  Most say as much as gold and silver, but the youngest says “as much as salt”.  He is offended by this orders the execution of her servant as punishment.  To avoid this, she escapes the Kingdom in a mouseskin coat. 

Years later, the King visits a neighbouring state, where his daughter has been hiding unbeknownst to him.  She serves him unsalted food, and he has a temper tantrum about how a King could serve such food. 

She then reveals herself and tells him why she did this – to show him the value of salt – and all is good again.

An interesting story which is now only available in German.

Strangely enough, there is an Indian fairy-tale with the very same start and end to the story.  It shows how valuable salt must have been, and is worth a read if you have the time.

The Princess Who Loved Her Father Like Salt 

In a country there lived a king who had seven daughters. One day he called them all to him and said to them, "My daughters, how much do you love me?"

The six eldest answered, "Father, we love you as much as sweetmeats and sugar;" but the seventh and youngest daughter said, "Father, I love you as much as salt."

The king was much pleased with his six eldest daughters, but very angry with his youngest daughter. "What is this?" he said; "my daughter only loves me as much as she does salt!"

Then he called some of his servants, and said to them, "Get a palanquin ready, and carry my youngest daughter away to the jungle."

The servants did as they were bid; and when they got to the jungle, they put the palanquin down under a tree and went away.

The princess called to them, "Where are you going? Stay here; my father did not tell you to leave me alone in the jungle."

"We will come back," said the servants; "we are only going to drink some water." But they returned to her father's palace.

 

Key sources: “Salt and the evolution of money”, the Daily SermonAlways Inspiring StoriesLearn English and Wikipedia

 

 

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • Wll I dunno, I’m taking all this with a pinch of salt…

  • Amir Tabakovic

    Louis XVI and not Louis XIV

  • Chris Skinner

    Thanks Amir

  • Teresa

    All the more hilarious (and frightening) that we consumers gleefully “sell” our salt – um – data – for the price of being allowed to comment on a talking dog video.
    You’re right – the price of “actionable data” is going up…the price of the raw material is practically nothing.