It is pretty clear that ‘prices’ in the ancient Near East had very little to do with mechanisms of demand and supply. Customary if the best way to describe them, and even the various petty potentates weighed in by inscribing such prices in clay. But there is one law of Hammurabi that I find very intriguing, since it suggests that raising your price actually lowers the value of your product. Here it is:

If a woman innkeeper should refuse to accept grain for the price of beer but accepts only silver measured by the large weight, thereby reducing the value of the beer in relation to the grain, they shall charge and convict that woman innkeeper and they shall cast her into the water.

Let’s see if we can figure out the assumption here. You walk into an inn and order a beer, plonking a bag of grain on the bar – as one does. ‘No,’ says the innkeeper, only silver here.’ She pulls out a large wight and tells you to put your silver on the scales. Wow, that’s heaps more silver than if I’d got hold of it by swapping some grain for silver first. Now, the customary relationships between grain-beer, grain-silver, and silver-beer do seem to have some connection. Fair enough, but how does asking a relatively higher price devalue the beer? Easy: you get less beer for the silver. Hence the beer is worth less.

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