The Genesis and Evolution of Money
The genesis of money is usually associated with plenty of fables and some people confound the issue further by mistaking money for coinage. The coinage system is a comparatively contemporary form of money that was probably pioneered by the Lydians in Asia Minor around the 7th century B.C. moreover, it is still uncertain whether these early coins were actually used as money as in the modern times. hence, before we make an attempt to ascertain the most primitive use of money, it is essential to identify what money really signifies.
Looking back in history, one would find that irrespective of any rational definition of money, its origins are almost as ancient as the human civilization. although, this article is not the appropriate place to delve into the details regarding the history of money, we may broadly divide it into nine 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. in addition to this classification of the history of money, here we will briefly chronicle the evolution of money from the pre-historic days to the present times in a few simple steps.
Influences
Incidentally, several factors such as the rise and fall of the mighty Roman Empire, emergence of an Islamic world, settlement of new colonies in distant continents, the Industrial Revolution in great Britain, 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 disintegration of erstwhile Soviet Union all had their individual influences on the evolution of money. Add to this the capitalist view propagated by economist Adam Smith and the counter view of a socialist system advocated by Karl Marx and Fredric Engels. in fact, the Industrial Revolution had made money an omnipresent part of the society that was condemned by Marx and Engels.
Barter System
The barter system is known to be the most primitive mode of transactions as the early people did not possess any form of money to purchase commodities or services. The barter system, which still exists among some communities around the world, denoted the exchange of personal possessions for the value of the desired commodities or services. Livestock was the most common unit of exchange from 9,000 B.C. to 6,000 B.C. and later agricultural produce too came in its purview. However, from 1200 B. C., people in China and regions of South-East Asia, including India, used cowry shells as a medium of exchange. use of the cowry shells became widespread in Africa and prevailed in many parts of the world till the middle of the 20th century.
Metal Money
The first form of metal money made its appearance in China sometime around the end of the Stone Age in 1,000 B.C. with the production of fake cowry shells. Apart from these, tools like knives and spades made of metals used in ancient China may also be considered as earliest forms of metal money. The Chinese coins were made from base metals and were normally punctured in the middle so that they could be threaded into a chain. in fact, these early Chinese metal coins served as prototypes for the modern-day coinage designing.
The silver coins made their first appearance some time around 500 B.C. in the form of silver pieces and bullions, and gradually evolved to its present manifestation. they were the first coins made of precious metals and carried impressions of Gods and emperors who issued them to demonstrate their value as currency. It is believed that the silver coins made their maiden appearance in Lydia or Turkey and their techniques were used repeatedly until they were bettered by the Persian, Greek, Macedonian and Roman empires. unlike, the coins produced by the Chinese, these coins were made from precious and semi-precious metals such as gold, silver and bronze and carried substantial inherent value.
Leather and Cloth Money
The Chinese were also first to introduce leather currency in 118 B.C., which many consider to be the precursor of paper money. they used white deer skin in pieces of one square foot that were colored around the edges for various transactions. on the other hand, the Lele tribe in Belgian-Congo in Africa pioneered the use of cloth money for transactions within their community.
Paper Money
According to records, the first paper money was used in China between the 9th and 15th century A.D. Soon after the introduction of the paper money, the region experienced a severe inflation as both the state and some individual authorities began issuing paper money in large-scale. Eventually, paper money disappeared from China in 1455 and re-appeared again several centuries later in Europe. most states had pegged the value of their paper currency to gold standard and whenever this equilibrium was disturbed owing to over-issuance of money, it not only led to a depreciation of the currency, but also steep inflation.
Gold Standard and Depression
For a long time, the value of coins was associated with the worth of the metal it was made from. However, with the advent of paper money, this system was abolished in many states and currency was meant for regular use in transactions, while precious metal like gold was kept as a strategic reserve. Deviating from this system, in 1816, England made gold as a benchmark for the value of currency. in simple words, this denoted that the face value of a currency was linked to the value of specific ounces of gold. Several years later, the United States also adopted the gold standard in 1900. Nevertheless, when the great Depression hit the economies of the states around the world in the 1930s, the United States launched a global movement to try and bring the gold standard to an end. Incidentally, while some nations still peg their currency to gold even today, most other governments and monetary organization try to be in charge of inflation.
Modern Money
The mid-20th century witnessed the globalization as well as liberalization of the economy encouraging free trade. The advancement of science and technology in the modern era established a system whereby any major transactions can be concluded without the actual use of physical money. While the introduction of debit and credit cards have already ushered in the electronic money, which is also being exchanged over the Internet, the role of the banks in granting advance payments or credit for augmentation of business has redefined the character and role of money in the society.
The full history of money available at www.uo2000.com
The Genesis and Evolution of Money
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