Short overview of the evolution of the means of exchange during Viking Era can be found in Viking Currency, an article by Dani Trynoski at Medievalists.net.
A basic economic concept to remember: part of the definition of money is a means of exchange and store of value. A silver armband, brooch, or coin can be both a store of value and means of exchange. Standard size silver coins are easier to work with on both criteria than jewelry.
A few pounds of silver is far easier to carry and use to buy stuff later than several dozen (?) furs, a dozen or two cows, or a few shiploads of grain.
Consider there was no secure way to store wealth in the time of the Vikings. There were no banks, no marketable securities, no way to establish reliable title to land. In essence, there was no store of value other than bullion or coins.
So, if you had a huge amount of wealth beyond your livestock and weapons, it would be in the form of bullion or coins. To keep it safe from theft, you would have to hide it in the ground.
Wealthy people who were killed, captured, never came back from another raid or trading expedition, or merely forgot where they buried their wealth abandoned all of their underground accumulation to be found some later time.
In The Age of the Vikings, Anders Winroth says children on a school outing found one hoard of 1,452 silver coins from the Viking age. Almost the entire hoard was Arabic dirham coins.
Author says there have been over 700 hoards found in Gotland. There was so much silver buried that another find is usually discovered each year.
This blog focuses on the finances of ancient times, with minimal focus on the overall society and culture.
Perspectives of the Vikings have varied over time, ranging from them being vicious brutes pillaging everything they could find (according to the Christian monks suffering at the hands of the Vikings) to brave explorers and traders.
For just this post, I’ll touch on those issues. Actually, the following comments all affect the economic world of the Viking Age.
Chapter 3 of The Oxford Illustrated History of the Vikings points out the occasional tendency to romanticize the Vikings. Some focus on their brave exploration and merchant trading abilities. There’s even a school of thought that considers them to be misunderstood victims of hostile PR reports from Christian monks. Another school of thought emphasizes there were merely one part of the typically brutal medieval age.
Eventually bullion became a store of value. This would have been in the form of silver coins usually, with gold being used sometimes. The coins had value because their precious metal not because of the particular coin.
This is a different framework from today where coins and bills have value because the government says so. It would be extremely rare to encounter a coin today that has precious metal equal to its face value. To further the contrast if you happen to have an old coin that has lots of silver in it (that would be dimes, quarters, half dollars, and dollars dated 1964 and earlier in the United States) their value is a large multiple of the face value. If those coins happen to be in fairly good condition their value is an extreme multiple of their face value.
The contrast in the Viking Age and medieval era is coins had value because of the precious metal they contained. Thus the bullion value was the means of exchange. As an aside is also a store of value and a unit of measure. That is the definition of money.
In terms of economic life, Viking Age: Everyday life during the extraordinary era of the Norsemen, by Kirsten Wolf, points out geography affected the size of settlements. On the coasts of Denmark and Sweden there were villages, meaning a group of three or more farms. In contrast, across most of Norway, the interior of Sweden, and the island colonies, the typical settlements were individual farms.
Fish were obviously a major component of the diet, particularly since there were a lot of fish and they were close in to land.
Author points out blacksmiths, who made tools and implements, had high prestige and had some of the richest grave goods.
Imports and exports
Author thinks that fur was one of the main exports. Slaves captured on raids were another major export.
Major imports would have been salt, spices, wine, silk, pottery, and glass. Weapons and semi precious stones would have been other major imports. Silver flowed into Scandinavia as the result of both trading and raiding.
Author says the pottery, wool cloth, and glass would have been imported from Western Europe. Silk came from Byzantium. Much of the silver came from the Muslim world.
The Viking, by Tre Tryckare, copyright 1967, has some fun speculation on the volume of annual trade in a major Viking trading town in Sweden.
The large island of Gotland, off the eastern shore of Sweden, is about 1,229 square miles in size. It was a major trading center during the Viking age. Page 51 of the book says that of the 200,000 silver coins found in Scandinavia from the Viking Age, about half were on the island of Gotland. This includes, according to the text:
40,000 – Arabic
38,000 – German
21,000 – Anglo-Saxon
The text has some fun speculation on the possible amount of trade. Two critical assumptions, which are listed so you can revised them as you wish:
Out of 1,000 silver coins received in trade, an unknown number were buried for storage and 1 of those has been found. This wild guess assumes that there was 1,000 coins of income for each 1 coin found,
One Anglo-Saxon coin had purchasing power of 10 or 20 schillings. At the then exchange rates of 1967, this would be roughly comparable to somewhere around $3.00.
Before decimalization of British currency, there were 20 schillings to a pound. Today (10/17/17) one pound converts to US$1.32.
One of the fascinating things to consider about the Viking and Roman ages is what economies looked like without a banking system or even a rudimentary financial system.
Ponder just a few of the implications.
Merely having coins allowed for trade that was more complex than barter.
There was no way to transfer money over distances. To move wealth required carrying precious metals or tradable goods. Returning from a successful trade mission or raiding expedition meant you carried your wealth with you.
There was no way to store wealth in any sort of financial intermediary. No banks. No Credit Unions. No money market accounts. No Schwab or Vanguard to hold your stocks. No stocks at all. Not even bearer bonds. No government securities for safety.
No, instead if you had wealth you needed to hold silver or gold. Putting it under the mattress or anywhere in the house or even in the area of the farm buildings made your wealth subject to theft by whatever marauder or king’s representative that meandered through. Instead you would bury your wealth.
Minting of silver and gold coins shows the foundational purpose of money:
medium of exchange,
store of value, and
unit of account.
The Viking age shows all three quite well.
That is where the large number of hoards of buried treasures come into play.