Write and discuss a brief history of money

Share Loading the player Moneyin and of itself, is nothing. It can be a shell, a metal coin, or a piece of paper with a historic image on it, but the value that people place on it has nothing to do with the physical value of the money. Money derives its value by being a medium of exchange, a unit of measurement and a storehouse for wealth.

Write and discuss a brief history of money

Bartering In Politics Book 1: He considered that every object has two uses: The capacity to carry out barter transactions is limited in that it depends on a coincidence of wants.

The seller of food grain has to find the buyer who wants to buy grain and who also could offer in return something the seller wants to buy. There is no agreed standard measure into which both seller and buyer could exchange commodities according to their relative value of all the various goods and services offered by other potential barter partners.

There is no evidence, historic or contemporary, of a society in which barter is the main mode of exchange. The First 5, Yearsanthropologist David Graeber argues against the suggestion that money was invented to replace barter.

The problem with this version of history, he suggests, is the lack of any supporting evidence. His research indicates that "gift economies" were common, at least at the beginnings of the first agrarian societies, when humans used elaborate credit systems.

A Brief History of Money

Graeber proposes that money as a unit of account was invented the moment when the unquantifiable obligation "I owe you one" transformed into the quantifiable notion of "I owe you one unit of something".

In this view, money emerged first as credit and only later acquired the functions of a medium of exchange and a store of value. Innes in his pamphlet "What is money? Innes refutes the barter theory of money, by examining historic evidence and showing that early coins never were of consistent value nor of more or less consistent metal content.

Therefore he concludes that sales is not exchange of goods for some universal commodity, but an exchange for credit. He argues that "credit and credit alone is money". There are various social theories concerning gift economies.

Some consider the gifts to be a form of reciprocal altruism. Another interpretation is that implicit " I owe you " debt [20] and social status are awarded in return for the "gifts".

This custom may reflect altruismit may be a form of informal insurance, or may bring with it social status or other benefits. So as in agricultural societies, things needed for efficient and comfortable employment of energies for the production of cereals and the like were the easiest to transfer to monetary significance for direct exchange.

As more of the basic conditions of human existence were met, [23] so the division of labour increased to create new activities for the use of time[ clarification needed ] to address more advanced concerns. As people's needs became more refined, indirect exchange became more likely, as the physical separation of skilled labourers suppliers from their prospective clients demand required the use of a medium common to all communities, to facilitate a wider market.

The Mesopotamian civilization developed a large-scale economy based on commodity money. The shekel was the unit of weight and currency, first recorded c. Money was not only an emergence[ clarification needed ], it was a necessity.

It was enacted by the sixth Babylonian king, Hammurabi. Earlier collections of laws include the code of Ur-Nammuking of Ur c.

They set amounts of interest on debt, fines for "wrongdoing", and compensation in money for various infractions of formalized law. It has long been assumed that metals, where available, were favored for use as proto-money over such commodities as cattle, cowry shells, or salt, because metals are at once durable, portable, and easily divisible.

The History Of Money: From Barter To Banknotes

The different forms and metallurgical processes imply a separate development. All modern coins, in turn, are descended from the coins that appear to have been invented in the kingdom of Lydia in Asia Minor somewhere around the year BCE and that spread throughout Greece in the following centuries: It is an electrum stater of a turtle coin, coined at Aegina island.

The use and export of silver coinagealong with soldiers paid in coins, contributed to the Athenian Empire 's dominance of the region in the 5th century BCE.Money, in and of itself, is nothing. It can be a shell, a metal coin, or a piece of paper with a historic image on it, but the value that people place on it has nothing to do with the physical.

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write and discuss a brief history of money

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The History Of Money: From Barter To Banknotes