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The Genesis And Evolution Of Money

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The origin of money is typically associated with many stories, and some people confuse the matter further by assuming the coinage for money. The coinage system is very modern kind of currency that was likely invented by Lydians who lived in Asia Minor around the 7th century B.C. In addition, it remains not certain if these early coins actually functioned as money in current day. So, before making an attempt to determine the earliest use of money, we need to know what money actually is.


In looking back over the history of money it is evident that, regardless of any reasoned definition of money its roots are as old as human civilization. While this isn't the right site to discuss the particulars about the origins of money, it is possible to roughly divide it into nine distinct phases: Egypt, Mesopotamia and Greece, The Far East and China, South-East Asia and India, The Islamic Lands, The Roman World, Africa and Oceania, Medieval Europe, The Early Modern Period, and The Modern Period. As a supplement to that classification for the history of money, we'll look at the history of money's evolution from prehistoric times up to present day in just a few steps.


Influences


In addition, there are many factors like the fall and rise of the powerful Roman Empire, emergence of an Islamic world, the settlement of new colonies on distant continents and the Industrial Revolution in Great Britain and the French Revolution, the Hundred Years Wars between Britain and France The American War of Independence, the two World Wars, the fall of Communism and the demise of the erstwhile Soviet Union all had their individual influence on the development of the concept of money. Then there is the view of capitalists propagated by the economist Adam Smith and the counter idea of a socialist system promoted through Karl Marx and Fredric Engels. In reality this Industrial Revolution had made money an all-encompassing part of society which was rejected in the minds of Marx as well as Engels.


Barter System


It is believed as the earliest method of transaction since the early people didn't have any kind of currency to buy goods or goods. This barter-based system which is still exists in a handful of communities around the world, was a symbol of the trading of personal possessions in exchange for the worth of the desired items or services. Livestock was the largest and most commonly used type of exchange during the period ranging from the 9,000 B.C. up to the year 6,000 B.C. and later , agricultural products also were included. But, beginning around the year 1200 B. C., people living in China as well as other parts in South-East Asia, including India used cowry shells for an exchange medium. The use of cowry shells was widespread throughout Africa and was prevalent in many areas of the globe until the mid-century 20th century.


Metal Money


The first type of metal money appeared in China in the middle in the Stone Age in 1,000 B.C. through the manufacture from fake cowry shells. In addition tools, such as spades and knives made from metals utilized in ancient China can also be seen as the earliest types of metal currency. These Chinese coins were constructed from base metals and were typically punctured at the middle, so they could be threaded onto chains. In actuality the early Chinese metal coins were used as models for the current design of coins.


Silver coins first made an appearance sometime around 500 B.C. as bullions and silver pieces which then evolved into its current form. They were the first coin comprised of precious metals. They also were adorned with the images of Gods and the emperors who issued them in order to show their value as a currency. The belief is that silver coins made their first debut at Lydia or Turkey and were repeatedly used until they were surpassed with their counterparts in the Persian, Greek, Macedonian and Roman empires. Contrary to the coins created by the Chinese they were made of precious and semi-precious metals , such as silver, gold, and bronze, and had a significant intrinsic value.


Leather And Cloth Money


The Chinese were also the first to introduce a leather currency in the year 118 B.C. Many believe to be the precursor of the paper currency. They utilized deer skins cut into units of one foot which were dyed around the edges for a variety of transactions. In contrast the Lele tribe of Belgian-Congo located in Africa was the first to use money made from cloth for transactions within their tribe.


Paper Money


According to the records that are available, the first paper currency was issued within China from the ninth to 15th centuries A.D. Shortly after the introduction of paper currency, the area saw a significant increase in inflation since both the state and certain authorities started printing paper money on a large scale. In the end, paper money vanished out of China in 1455 before appearing after a period of time in Europe. The majority of states tied its value for their currency to the gold standard, and when the equilibrium was upset due to excessive printing of money and it resulted in a decline in the value of currency but additionally a significant inflation.


Gold Standard And Depression


For a long period, the value of coins was often correlated with the value of the metal they were constructed of. But with the introduction the use of the invention of paper money the system was discarded in a number of states. Currency was designed to be used for everyday transactions, whereas precious metals like gold were kept as a reserve of strategic importance. In contrast to this system, in 1816 England introduced gold a standard for the worth of currencies.


Simply put it meant that the worth of currency could be tied to the price of particular pounds of gold. In the following years in it was announced that the United States also adopted the gold standard in the year 1900. However during it became clear that the Great Depression hit the economies of all the nations around the globe in the 1930s and the 1930s, it was the time that United States launched a global campaign to eliminate the standard of gold. In addition, although some countries continue to bind their currencies to gold however, the majority of other governments and financial institutions attempt to take charge of inflation.


Modern Money


The 20th century saw the globalization and economic liberalization that encouraged free trade. The development of technology and science in the contemporary era created the system that allows for important transaction can be made without the need for physical currency. Although the advent of credit and debit cards has already brought in the digital currency, which can also be exchanged on the Internet The role of banks when it comes to granting advances in payments or credit to expand business has altered the nature and function of money in society.


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