The History of Money

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Greek drachm of Aegina. Obverse: Land turtle / Reverse: ΑΙΓ(INA) and dolphin. The oldest turtle coin dates 700 BC; this coin: after 404 BC (Image Credit: Classical Numismatic Group, Inc.)

Money is a vital part of modern existence. The monetary system is constantly evolving and has a long history, going back to when humans first started to settle in one place and began agriculture.

Before Money

In the earliest part of human history, when small hunter bands followed seasonal travel routes hunting for food, humans had no need for a monetary system. The food that was caught was divided equally and people shared their resources. Trading did occur but it was more complicated than just changing one set of goods for another. Trading was a means of showing a kinship and a means of cementing friendships.

Bartering Instead of Money

The first monetary system was a form of bartering. People exchanged one thing that they no longer needed for another thing that they desperately needed. Animals were probably the first things that were bartered. When humans settled down into villages some people began to become specialists in a variety of different arts. They could barter their creations for services or for objects. The problem with this monetary system was there was no set limit for exchange. There were no set rules and the rate of exchange varied from person to person. So you could be giving a more valuable item or more items in exchange for the same item each time.

The First Money

Money has not always been the way it is now. Different cultures and people held different things valuable and used them for exchange instead of metal. Shells, beads, sugar, salt, nails and even skulls have been used as a monetary system at one point or another. Some products had value because of their usefulness but others were valued because of their appearance. The problem with this monetary system was that all cultures did not value the same things. It made it difficult to trade with the cultures that did not value the same items as you did.

Metal and Paper as Money

Metal was a popular item for of exchange for many different cultures. Gold, silver and bronze were weighed to assess their worth and then were exchanged for an object of the same value. The Lydians were the first people to shape money into coins and give each coin a set value. They were made of a mixture of gold and silver and stamped with the kings’ seal to authenticate them. In around 560BC the Lydians created the first standard coins. When other civilizations saw the efficiency of coins they began to make their own. In about 910AD the Chinese were using the first form of paper money.

Money in the Present Day

In the present day we use a variety of forms of payment. Coins, paper notes, cheques and credit are forms of payment we use in everyday life. Money is evolving yet again to become more digitalised. Credit and debit cards allow us to shop online, buying from all over the world with no physical transactions. It has been suggested that we are heading towards a digital age, where all physical money will become obsolete.

References:

  1. Renfrew.C, Bahn.P, 2008, Archaeology: Theories, Methods, and Practice, Thames and Hudson Inc, New York
  2. Basel. R, 2006, The History Of Money, Capstone Press
  3. Haydon.J, 2006, The History Of Money, Macmillan Education, Australia
  4. Bailey.G, Law.F,2006, Cowries, Coins, Credit:The History of Money, Compass Point Books, Minneapolis