How Did People Get Paid in the Pre-Columbian Americas? (Not in Gold)

Several different economic models were in practice in the Americas prior to colonization, but none of the pre-Columbian civilizations used a standardized currency. While silver and gold, the metals most highly valued in Europe at the time, abounded, commodities themselves were used as de facto currency to pay for goods, reward service, and garner favor with foreign leaders.

Currency is understood as a standardization of money that is used as a medium of exchange; it does not have to be bills or coins, though that is what is used today. At one point, the bills we use as money were representative money: they represented something of value, i.e., gold, but had little or no value of their own. More recently, modern currency has become fiat currency: it has value because the issuing government says it does.

On the other hand, commodity money derives value from the commodity from which it is made. Commodity money IS the thing of value, meaning both parties exchanging it agree it has some standard value as money because of its use outside of being money—like the infamous cigarette in prison.

For example: the year is 1649, and a farmer goes to the market for eggs with a jug of fresh milk to trade. But the guy selling eggs doesn’t need milk, nor can he easily trade the milk for something he does need. So, the farmer is out of luck. But if instead of milk, the farmer had something everyone agreed was universally in demand—something measurable, non-perishable, and easy to store, for example, tobacco—the egg vendor would accept that product in exchange for his eggs because he can either use it himself or easily store and exchange it later for something he does need (and it won’t go bad in the meantime).

There are almost no examples of representative or fiat currency in the Americas before European contact, but a number of items of value functioned as commodity money throughout what is today Mexico and Central and South America.

None of the pre-Columbian societies used the precious metals that colonizers considered valuable as currency. Gold certainly existed in the Americas, though. From the moment Columbus landed on Hispaniola and discovered the natives wearing gold bars in their noses, the New World was ransacked for gold, and later silver, for decades. So, if gold and other precious metals were not being used for cash, what were they used for?

In short, gold was used for art in the form of ritual objects, ornamentation, and regalia.

What gave gold its value in the Americas was not so much its rarity but its luster, durability, and malleability, all of which made it ideal for creating ritual pieces to honor the gods, ornamentation for temples, sacred objects to bury with the dead and jewelry and accessories for the nobility and elites.

The Inca civilization, for example, believed gold to be the sweat of the sun god, Inti. Gold was used to make masks, figurines, and other objects used in religious ceremonies. Qorikancha, the Temple of the Sun in Cusco, was actually covered in sheets of gold and boasted a golden garden filled with gold llamas, jaguars, guinea pigs, and corn.

Similarly, the Aztecs believed gold to be the excrement of the sun god, Huītzilōpōchtli. They used it to create objects for religious purposes as well as personal adornments for the empire’s nobility. Gold was used to create masks and costumes representing deities, which would then be worn by leaders in ceremonies to allow them to channel the gods and awe the public.

Unfortunately, the vast majority of pre-Columbian gold artifacts were stolen and destroyed by the colonizers, who were consumed with what they believed to be the gold’s intrinsic value and untroubled with its sacred and religious significance—not to mention any objective artistic value—to the indigenous peoples of the Americas. In just the first 50 years of conquest, it’s estimated that the Spanish extracted 100 tons of gold from the Americas (more than doubling the amount of gold in Europe at the time and leading to hyperinflation there), nearly all of which was melted down from its original form in order to be transported more easily.

Gold was very much a commodity in the Americas—it was mined, traded, and offered as tribute—but it was not THE commodity. Other resources were equally or more valuable, including feathers, cloth, and shells, but were of little interest to the gold-obsessed Spanish. It was these goods that moved through the Aztec, Maya, and Inca empires and made their economies run.

The Inca economy was something akin to today’s socialism: the people paid taxes to the government—in the form of labor, as well as a portion of their crops—and the government, in turn, provided housing, food, and clothing. In addition, people lived in family groups and communities, ayllus, where members worked together to produce resources for the entire community, in accordance with their practice of ayni, reciprocity based on the belief that the goods or labor one offered now would be repaid in kind later.

This meant there was no need for wages or markets, so there was no use for currency. A trade network expanded across the empire to bring products specific to the various regions to those without them, including wool, textiles, and ceramics—but it was managed by the government rather than a class of traders. Some of those commodities were accepted for the payment of tributes or distributed as rewards for service or loyalty, functioning as a de facto currency (despite not having a set value, which was unnecessary without a market to “spend” them in). One of those commodities stood out above all others: textiles.

When the conquistadors arrived in what is now called the Inca empire, they were not given precious metals or gems in welcome; they were given intricately woven textiles that the Inca valued above all other material goods. Inca textiles were works of art that required astounding skill and used the soft, warm fibers unique to the Andes, like alpaca and vicuña. The labor, or mit’a, that was required of the Inca peoples to pay their taxes included the usual empire-building skills—construction, farming, soldiering—but also weaving.

Where in today’s society, leaders reward loyalty with cash, Inca emperors did so with fabric made of the softest fibers by the most skilled weavers. To ensure a supply of the finest cloth for the nobility, women in the acllawasi, sacred institutions that the Spanish compared to convents, wove just for them. The empire’s warehouses stored food and weapons, but also textiles. Soldiers were compensated for their service with cloth. Disagreements with neighboring or conquered cultures were smoothed over with gifts of textiles. Offerings made to gods might include textiles, which were burnt.

Yet, despite the relative durability of these textiles, particularly in the dry climate of the Andes, the number of examples remaining is limited. In this case, though, it was not because they were destroyed by the conquistadors. It was the opposite. Textiles were so valued that they were often burned by the Inca themselves to prevent them from falling into enemy hands, including the Spanish.

Unlike the planned economy entirely centrally managed by the Inca, the Maya are believed to have had a version of a market economy, particularly during the post-classic period. Labor conscription and tributes in the form of goods and crops given to the state were still central features, but archeological evidence also indicates the existence of not only vast trade networks but busy marketplaces.

Obsidian and jadeite, high-value goods in the Maya civilization, would be expected to be reserved for the nobility, but evidence indicates they were in use among the general populace. This suggests that ordinary people were able to obtain them through trade or purchase, indicative of a marketplace culture rather than state-controlled trade networks that restricted access to certain commodities.

What was missing from these Mayan marketplaces was money. The Maya had no standard currency, and trade was largely a process of bartering both everyday commodities and luxury items. There is evidence that some commodities were used as a form of currency, including cloth and cacao seeds. Recent research suggests that another commodity may have also come into use as currency: salt.

Salt was traded in marketplaces, as evidenced by the above mural from Calakmul, dated more than 2500 years ago. It was a precious commodity not only for flavoring food but also for preservation. Salted meat and fish, as well as animal hides, would last longer, making transportation and trade easier. But salt production was not just for domestic consumption; it was an actual industry, one that expanded as the civilization grew.

Archaeologists have found evidence of home-based salt workshops in present-day Belize that produced salt on a much larger scale than could be reasonably used by the home, as well as larger salt production facilities that were state-owned—both clear indicators that salt was actively being produced for trade, not just for personal use.

There is also evidence that salt was produced in standardized units, loaves or cakes, which lends credence to the idea that salt was being used as a form of currency. In a market-based economy, assigning value to commodity money is only possible if it comes in a standard unit, and using it as money is only possible when it can be easily measured and divided in the marketplace.

A great deal more is known about the Aztec economy than the Maya’s since the Aztec civilization was still thriving when the Conquistadors landed in the New World. Like both the Inca and Maya economies, the Aztec economy relied on tributes in the form of goods, and sometimes humans, made by the empire’s outlying regions to Tenochtitlan, the capital. Luxury items were then redistributed to the elites or used to curry favor with neighboring communities—or invaders.

For the Aztec commoners, though, a variety of marketplaces were accessible for the purchase of necessities or higher-value items, could they afford them. According to usurper Hernan Cortes, markets of varying sizes were held, from local village markets to a grand market in Tlatelolco that drew an estimated 60,000 people daily.

In fact, the Aztecs had a recognized merchant class, which held a special place in society. Pochteca were professional traders (and sometimes spies!) who traveled far and wide to bring unique goods back to Mexico, particularly those of interest to the elites, like feathers, obsidian, and jade, as well as more widely used commodities. Yet with such a thriving market economy, variety of goods, and active trading network, for the majority of the empire’s existence, it had no currency.

What it did have was cacao.

Cacao was considered a gift from Quetzalcoatl and highly valued by the Aztecs. It was used to make the famous xocolatl, of course, but also in religious ceremonies and other rituals, and was given as a reward for service or loyalty. Most of the territory controlled by the Aztecs was not suitable for growing cacao, so it had to be imported, making it even more valuable. Its consumption was largely restricted to the nobility, warriors, and pochteca.

Dried cacao beans were relatively durable, portable, and easy to store, making them ideal for use as currency. According to a 1545 list of commodity prices in the region, one cacao bean could buy a tomato, three an avocado, and thirty a rabbit. Cacao beans were also used to balance transactions when bartering goods that did not have equal value.

This cocoa currency was not immune to a pesky problem that’s often been encountered with modern currency—counterfeiting. People would use other substances, including amaranth seed dough and avocado pits, to make fake beans or hollow out beans and refill them with sand in their attempts to bolster their wealth.

Even after Spanish colonization, the Mexica people continued to use cocoa beans as currency. A Spanish official of the time, Garcia de Palacio, even documented the exchange rate: 200 cacao beans were worth 1 Spanish real, which then contained approximately 26 grams of silver—about USD $20 at the current price of silver!

While no coins were used as currency in the Americas before colonization, archaeologists have discovered an interesting metal artifact in both Mesoamerica and the northern Andes that may have been used as currency as early as the early second millennia CE.

Axe monies or hoe monies, as the name suggests, are flat, axe-shaped bronze disks that have been discovered in present-day Peru, Ecuador, and Mexico and are believed to have been used as money in some regions, evolving from the functional axe heads that were traded. Found buried with the dead, they also seem to have served some funerary purposes.

However, there is no definitive evidence of these axe-shaped disks, called tajaderos by the colonizers, being used as currency until the early 16th century, when they were found in use in present-day Mexico. At that time, their value was fixed at 8,000 cacao beans.