The history of money involves the development of means of carrying out transactions involving exchange media. Money is a clearly identifiable object that is generally accepted as payment of goods and services and payment of debt in the market, or which is a legal means of payment in a country. Although money has always been a medium of exchange, not all exchange media is money in the numismatic sense.
Significant evidence shows that many things are exchanged in the ancient market that can be described as a medium of exchange. These include livestock and grains - things that directly benefit them - but also only interesting items like shells or cowrie beads are exchanged for more useful commodities. However, such exchanges would be better described as barter, and a common commodity barter (especially when commodity goods are not exchangeable) technically does not make the commodity "money" or "commodity money" such as shekel - both coins represent the weight certain barley, and the weight of a barley sack.
Due to the complexity of ancient history (ancient civilizations developed at different rates and did not keep accurate records or breaking their records), and because of the ancient origins of economic systems preceding written history, it is impossible to trace the origins of money discovery and the transition from "barter systems" to "monetary system". Furthermore, the evidence in history supports the notion that money has taken two major forms divided into broad categories of money from accounts (debits and credits in ledgers) and exchange exchange (exchange media) real made of wood, paper, bamboo, metal, etc.), and the debates have been made first.
Regarding the money from the account , the tally stick can be described as a very primitive ledger - the oldest of which came from Aurignacian, some 30,000 years ago. While it may not be reasonable to conclude the most ancient calculating sticks are used to store accounting records in the monetary terms term, their existence does indicate that "accounting" - keeps a written record of things that are counted - much more ancient than many assumed. David Graeber proposes that money as a unit of account is created when an unexplained obligation "I owe you" turns into a quantifiable idea of ​​"I owe you a unit of something". In this view, money comes first as credit and only then takes the form of a medium of exchange.
Regarding exchange exchange, the use of representative money historically has long been the invention of coins. In the ancient empire of Egypt, Babylon, India and China, temples and palaces often had commodity warehouses issuing certificates of deposits as proof of claims for some goods stored in warehouses. Since these "claim tickets" can be exchanged at the warehouse for the commodities they represent, they can be exchanged on the market as if they were a commodity.
Although not the oldest form of money of exchange, various metals (both ordinary and precious metals) are also used in both the barter system and the monetary system and the historical use of the metal provides some of the clearest illustrations of how the barter system breeds monetary system. The use of bronze by Romans, while not among the more ancient examples is well documented, and this illustrates this transition clearly. First we find the use of "rough aes" (bronze bronze) which are the unmeasured bronze weight weights used in what is true of the barter-barter system-the bronze capability is related exclusively to its use in the blacksmith and it is exchanged for the purpose of being converted into a tool. The next historical step is a bronze in a bar that weighs as much as 5 pounds (possibly to make barter easier and fairer), called "aes signatum" (a signed bronze), in which the debate arises between whether this is still a system barter or now the monetary system. Finally, there is a clear break from the use of bronze in barter into usage that is not debatable as money because the lighter steps of bronze are not intended to be used as anything other than currency for transactions. The aes grave (or heavy bronze) (or As ) is the earliest use of coins in Rome, but not the oldest known metal coin.
Video History of money
Prehistoric: the precursor of money and its appearance
Non-monetary exchange
Barter
In Greek, the Greek philosopher Aristotle contemplated the nature of money. He assumes that each object has two uses: the initial purpose for which the object was designed, and as goods for sale or barter. The determination of monetary value to insignificant objects such as coins or debentures arises when people gain the psychological capacity to place trust in each other and in external authority in barter exchanges.
By barter, a person with an excess value, such as the size of a grain or a quantity of livestock, may directly exchange it for something that is deemed to have the same or greater value or usefulness, such as a clay pot or a tool. The capacity to conduct barter transactions is limited because it depends on chance coincidence. Grain sellers should find buyers who want to buy grains and who can also offer in return for something the seller wants to buy. There is no agreed standard in which sellers and buyers can exchange commodities according to their relative value of all the various goods and services offered by other potential barter partners.
Criticism
In his book Debt: 5,000 First Year , anthropologist David Graeber argues against the suggestion that money was created to replace barter. The problem with this historical version, he says, is the lack of supporting evidence. His research shows that "gift economy" is common, at least at the beginning of the first agrarian society, when humans use complicated credit systems. Graeber proposes that money as a unit of account was created when an unexplained obligation "I owe you" turned into a quantifiable idea of ​​"I owe you a unit of something". In this view, money emerges first as credit and only then acquires the function of the currency and the store of value.
Economic rewards
In a prize economy, valuable goods and services are regularly provided without explicit agreement for immediate rewards or future rewards (ie no formal quid pro quo). Ideally, a simultaneous or recurrent gift serves to distribute and redistribute valuables in society.
There are various social theories about gift economics. Some people regard the gift as a form of reciprocal altruism. Another interpretation is that debt "I owe" and social status are given in return for a "gift". Consider, for example, sharing food in some hunter-gatherer societies, where food distribution is the protection against daily daily feeding failures. This habit may reflect altruism, may be an informal form of insurance, or may bring with it social status or other benefits.
The appearance of money
After livestock domestication and early cultivation of plants in 9000-6000 BC, both livestock and plant products were used as money.
In the earliest examples of trade with money, things with the greatest utility and reliability in terms of reuse and remarketing (marketing power), determine the nature of the selected object to be redeemed. So as in agricultural societies, the things necessary for efficient and convenient energy work for the production of cereals and the like are the easiest to transfer to monetary significance for direct exchange. As more basic conditions of human existence are fulfilled, the division of labor increases to create new activities for the use of time to deal with more advanced problems. As people's needs become more subtle, indirect exchanges become more likely, because the physical separation of skilled workers (suppliers) from their prospective clients (demand) requires the use of a common medium for all communities, to facilitate a wider market.
Aristotle's opinion of the creation of money as a new thing in society is:
When a country's population becomes more dependent on others, and they import what they need, and export what they have too much, money is sure to start to use.
Maps History of money
Bronze_Age: _commodity_money.2C_credit_and_debt "> Bronze Age: commodity, credit and debt
Many cultures around the world are developing the use of commodity money, that is, objects that have value in themselves as well as value in their use as money. Ancient Chinese, Africans, and Indians use seashells.
Mesopotamian civilization developed a large scale economy based on commodity money. Shekel is the unit of weight and currency, first recorded c. 3000 BC, refers to the weight of a certain barley, and the equivalent amount of silver, bronze, copper, etc. Babylon and its neighbors then developed the earliest economic system as we think today, in terms of debt regulations, legal contracts and legal codes relating to business practices and private property. Money is not just an emergence, it is a necessity.
The Code of Hammurabi, the most ancient code of ancient law, was created in 1760 BC (the middle chronology) in ancient Babylon. It was imposed by the sixth king of Babylon, Hammurabi. Previous legal collections include Ur-Nammu code, king of Ur (circa 2050 BC), Code Eshnunna (circa 1930 BC) and Lipit-Ishtar code of Isin (c. 1870 BC). These legal codes formalize the role of money in civil society. They set a certain amount of interest on debt, fines for "mistakes", and compensation in money for various violations of the formal law.
It has long been assumed that metals, if available, are favored for use as proto-money over commodities such as cattle, clamshells, or salts, as they are long-lasting, portable, and easily split. The use of gold as proto-money has been traced back to the fourth millennium BC when the Egyptians used heavy set weight gold as a medium of exchange, as had been done before in Mesopotamia with silver stalks.
The first mention in the Bible about the use of money is in the Book of Genesis in relation to the criteria for circumcision of a slave purchased. Later, Machpelah Cave was purchased (by silver) by Abraham, sometime after 1985 BC. The currency was also used among the Philistines in the same period.
1000 BCE - 400 CE
Standard coin
From about 1000 BC, money in the form of small blades and shovels made of bronze had been used in China during the Zhou dynasty, with a bronze replica of the cowrie shells used earlier. The first coins produced appear to have appeared separately in India, China, and cities around the Aegean Sea between 700 and 500 BC. While these Aegean coins are stamped (heated and hammered with emblems), Indian coins (from the Ganges valley) perforated metal disks, and Chinese coins (first developed in the Great Plains) are bronze cast with holes in the middle coupled together. Different forms and processes of metallurgy imply separate developments.
The first ruler of the Mediterranean known to have set the standard of weight and money officially is Pheidon. The stealing occurred at the end of the 7th century BC among the Greek cities of Asia Minor, spreading to the Greek islands of the Aegean and to southern Italy in the year 500 BC. The first stamp money (having the mark of some authority in the form of pictures or words) can be seen at the BibliothÃÆ'¨que Nationale in Paris. This is an electrum stater of turtle coins, created on the island of Aegina. This coin is about 700 BC.
Other coins made of electrum (a naturally occurring silver and gold alloy) were produced on a larger scale of about 650 BC in Lydia (on the coast of Turkey now). Similar coins were adopted and produced by their own standards in nearby Ionian cities, including Mytilene and Phokaia (using electro coins) and Aegina (using silver) during the 6th century BC, and were soon adopted on the Greek mainland, and the Persian Empire (after it entered Lydia in 547 BC).
The use and export of silver coins, along with coin-paid soldiers, contributed to the dominance of the Kingdom of Athens in the region in the 5th century BC. The silver used is mined in southern Attica in Laurium and Thorikos by a large labor of slave laborers. The discovery of the main silver vessels at Laurium in 483 BC led to the great expansion of the Athenian military fleet.
The worship of Moneta was recorded by Livy with a temple built at the time of Romans 413 (123); a temple ordained to the same goddess was built in the early part of the 4th century (probably the same temple). For four centuries, the temple contains a mint from Rome. The goddess's name is the source of many words in English and Roman, including the words "money" and "mint".
Test
The discovery of the touchstone leads to the commodity of coins and coins. Any soft metal can be tested for purity on the touchstone. Gold is a soft metal, which is also hard to get, solid, and can be stored. As a result, monetary gold spread very rapidly from Asia Minor, where it first gained widespread use, to the rest of the world.
Using such a system still requires several steps and mathematical calculations. The test stone allows one to estimate the amount of gold in the alloy, which is then multiplied by the weight to find the amount of gold alone in the bump. To make this process easier, a standard coin concept was introduced. Coins are weighed first and pre-mixed, so as long as the user knows the origin of the coin, the touchstone is not necessary. Coins are usually printed by the government in a carefully protected process, and then stamped with a symbol that ensures the weight and value of the metal. However, it is very common for the government to assert that the value of the money lies in its emblem and then to reduce the value of the currency by lowering the precious metal content.
General notes
Gold and silver are the most common forms of money in history. In many languages, such as Spanish, French, and Italian, the word for silver is still directly related to the word for money. Sometimes other metals are used. For example, Sparta's ancient coins are iron-printed to prevent its citizens from engaging in foreign trade. At the beginning of the 17th century Sweden did not have precious metals, resulting in "plate money": large sheets of copper 50 cm or longer and wide, stamped with an indication of their value.
Gold coins began to be printed again in Europe in the 13th century. Frederick II is credited for having included gold coins during the Crusades. During the 14th century Europe changed from the use of silver in currency to gold printing. Vienna made this change in 1328.
Metal-based coins have the advantage of carrying their value inside the coin itself - on the other hand, they induce manipulation, such as coin clipping to remove some precious metals. The bigger problem is the existence of coins with gold, silver and copper in Europe. The exchange rate between metals varies with supply and demand. For example gold guinea coins began to rise against the silver crown in England in the 1670s and 1680s. As a result, silver is exported from the UK in return for gold imports. The effect is exacerbated by Asian traders who do not share the appreciation of European gold at all - gold left Asia and silver left Europe in the number of European observers such as Isaac Newton, Master of the Royal Mint observed with anxiety.
Stability comes when national banks are guaranteed to convert silver money into gold at a fixed interest rate; it does, however, not come easily. The Bank of England risked a national financial catastrophe in the 1730s when customers demanded that their money be converted into gold in times of crisis. Finally, London traders rescue banks and countries with financial guarantees.
Another step in the evolution of money is the change from coin to unit weight into units of value. Differences can be made between the value of the commodity and the value of its specie . The difference between these values ​​is seigniorage.
Roman banking system
400-1450
Medieval account coins and money
Banknote
Paper money was introduced in Chinese Song Dynasty during the 11th century. The development of banknotes began in the seventh century, with local issues of paper currency. Its roots are in traders' receipts receipts during the Tang Dynasty (618-907), as traders and wholesalers want to avoid most of the copper currency in large commercial transactions. The credit memorandum issue is often for a limited period of time, and at some discounts to the amount promised later. But jiaozi did not replace coins during the Song Dynasty; paper money used with coins. The central government immediately observed the economic benefits of printing paper money, issuing monopoly rights from several deposit shops to the issuance of this deposit certificate. At the beginning of the 12th century, the amount of banknotes issued in one year amounted to an annual rate of 26 million coins in cash.
In the 13th century, banknotes were known in Europe through travelers' accounts, such as Marco Polo and William of Rubruck. Marco Polo's story of banknotes during the Yuan Dynasty was the subject of a chapter of his book, Swap bills
Bills of exchange became prevalent with the expansion of European trade towards the end of the Middle Ages. The wholesale Italian trade abundant in fabrics, wool, wine, tin and other commodities relies heavily on credit for its rapid expansion. Items are supplied to the buyer against the bill of exchange, which is the buyer's promise to make payments on a certain date in the future. Provided that the buyer is in good standing or the bill is backed by the credible guarantor, the seller can then present the bill to the merchant banker and redeem it with the money at the discounted value before it actually matures. The main purpose of this bill is, that traveling with cash is very dangerous at the time. Deposits can be made with bankers in one city, in turn a bill of exchange is distributed, which can be exchanged in another city.
This charge can also be used as a form of payment by the seller to make additional purchases from its own suppliers. Thus, the bill - the initial form of credit - becomes a medium of exchange and a medium of value storage. Like loans made by Egyptian grain banks, this trade credit is an important source for the creation of new money. In the UK, bills of exchange became an important form of credit and money during the last quarter of the 18th century and the first quarter of the 19th century before banknotes, checks and cash credit lines were widely available.
Tallies
The acceptance of symbolic money forms means that symbols can be used to represent something of value available in physical storage elsewhere in space, such as grain in a warehouse; or something of value that will be available later, such as a promissory note or an exchange bill, a document ordering a person to pay a certain amount of money to another on a certain date or when certain conditions have been met.
In the 12th century, the English monarch introduced an early version of the bill of exchange in the form of a piece of wood called a tally stick. Tallies was originally used when the paper was rare and expensive, but its use persisted until the early 19th century, even after paper money became prevalent. The notch signifies the amount of taxes paid to the Crown. Initially the calculation is only the form of receipt to the taxpayer at the time of contributing. When the income department becomes more efficient, they start issuing figures to show tax appraisers' appointments to make future tax payments at certain times of the year. Each count consists of a matching pair - a stick is awarded to the judged at the time of the assessment representing the amount of tax which must be paid later, and the other held by the Ministry of Finance representing the amount of tax to be collected in the future.
The Treasury found that these calculations could also be used to make money. When the Crown has exhausted its resources at this time, it may use a counting mark representing future tax payments due to the Crown as a form of payment to its own creditors, which in turn may collect tax revenue directly from those assessed or use the same. calculation to pay their own taxes to the government. Calculations can also be sold to other parties in return for gold or silver coins at a discounted price that reflects the length of time remaining until the tax is due for payment. Thus, the calculation becomes the accepted medium of exchange for certain types of transactions and value stores received. Like the previous giro banks, the Treasury quickly realized that it could also spend money not supported by certain tax assessments. Thus, the Treasury creates new money backed by public trust and confidence in the monarchy rather than by certain revenue receipts.
1450-2008
Goldsmith banker
British goldsmiths have become artisans, gold traders, money changers, and money lenders since the 16th century. But they are not the first to act as financial intermediaries; at the beginning of the 17th century, the scriveners were the first to hold deposits for the purpose of perpetuating them. Traders and merchants have amassed a great deal of gold and entrusted their wealth to the Royal Mint for safekeeping. In 1640 King Charles I confiscated personal gold deposited in the mint as a forced loan (which must be repaid from time to time). After that traders prefer to keep their gold with a goldsmith from London, who has a personal safe, and charge a fee for the service. Instead of each precious metal deposit, the goldsmiths issued a receipt stating the quantity and purity of the metal they held as a bailee (ie, in trust). This receipt can not be set (only the original depositors can collect the stored goods). Gradually goldsmiths took over the functions of rewriters on behalf of depositors and also developed modern banking practices; promissory notes issued for money deposited by customs and/or law are loans to goldsmiths, that is, the depositor expressly permits goldsmiths to use the money for any purpose including advances to their customers. Goldsmiths are not charged, or even pay interest on these deposits. Since the promissory notes are paid on demand, and the advance (loan) to the goldsmith's customers must be paid in a longer period of time, this is an early form of fractional reserve banking. The promissory note evolves into a transferable instrument, which can be circulated as a form of safe and comfortable money backed by a goldsmith promise to pay. Therefore, the goldsmith can advance the loan in the form of gold money, or in the form of a promissory note, or in the form of a checking account. Gold deposits are relatively stable, often left with goldsmiths over the years, so there is little risk of default as long as public confidence in the integrity of goldsmiths and financial health is maintained. Thus, the goldsmith from London became the pioneer of UK banking and a prominent new money-maker based on credit.
Accounts payable
Demand deposits are funds deposited in bank accounts and available for withdrawal at the discretion of the depositor. Withdrawing funds from the account does not need to contact or make any kind of prior arrangement with bank or credit union. As long as the account balance is sufficient to cover the withdrawal amount, and the withdrawal is done in accordance with procedures established by the financial institution, the funds can be withdrawn upon request.
Banknote
The first European banknote was issued by Stockholms Banco, the predecessor of the Bank of Sweden, in 1661. It replaced the copper plates used as a means of payment, although in 1664 the bank ran out of coins to redeem the notes and ceased operating in the same year.
Inspired by the success of the goldsmiths in London, some of whom were pioneers of the great British banks, the banks began issuing notes very precisely called "banknotes," which were circulated in much the same way as the currencies government circulated today. In the UK this practice continued until 1694. Scottish banks continued to issue letters until 1850, and still issued banknotes backed by Bank of England records. In the United States, this practice continued into the 19th century; at one time there were more than 5,000 types of banknotes issued by various commercial banks in America. Only records issued by the largest and most creditworthy banks are widely accepted. Smaller scripts, lesser-known institutions circulating locally. Further away from home it is only accepted at a discount, if at all. The development of the type of money goes hand in hand with multiplication in the number of financial institutions.
This banknote is a form of representative money that can be converted into gold or silver with applications in the bank. Because banks are issuing much more records than the gold and silver they deposit on deposits, the sudden loss of public trust in banks can trigger mass redemptions of paper money and lead to bankruptcy.
The use of banknotes issued by private commercial banks as a legitimate payment instrument has gradually been replaced by the issuance of official bank notes and controlled by the national government. The Bank of England was granted sole right to issue banknotes in the UK after 1694. In the United States, the Federal Reserve Bank was granted the same rights after it was established in 1913. To date, this official government currency is a form of representation money, as they are partially supported by gold or silver and can theoretically be converted to gold or silver.
After 2008
Cryptocurrency
The latest developments in money use cryptography to ensure trust and fungibility in a theoretically distributed ledger called blockchain. While some digital currency systems have been proposed since the 1980s, the first decentralized cryptocurrency peer-to-peer, bitcoin, was proposed in 2008 by unknown authors or writers under the pseudonym of Satoshi Nakamoto. The protocol proposed by Nakamoto solves what is known as a dual expenditure issue without requiring trusted third parties.
Since the beginning of bitcoin, thousands of other cryptocurrencies have been introduced, many of which use the symbology of coins, such as silver for Litecoin.
Different types of money
In modern times, the broader concept of "money" includes other more complicated forms of "account money" and "exchange money." Different types of money are usually classified as "M". "M" typically ranges from M0 (narrowest) to M3 (widest) but the "M" is actually focused on policy formulation depending on the country's central bank:
- M0 : In some countries, like England, M0 includes bank reserves, so M0 is referred to as basic monetary, or narrow money.
- MB : referred to as the monetary base or the total currency. This is the basis from which other forms of money (such as check deposits, listed below) are created and traditionally the most liquid measure of the money supply.
- M1 : Bank reserves are not included in M1.
- M2 : Represents M1 and "close replacement" for M1. M2 is a wider money classification than M1. M2 is the main economic indicator used to forecast inflation.
- M3 : M2 plus big and long term deposits. Since 2006, M3 is no longer published by the US central bank. However, there are still estimates produced by various private institutions.
- MZM : Money with zero maturity. It measures the supply of financial assets that can be exchanged on a nominal basis upon request. MZM velocity is historically a relatively accurate predictor of inflation.
See also
References
Bibliography
- Bowman, John S. (2000). Chronology of History Chronology and Asian Cultures . New York: Columbia University Press. ISBN: 0231110049
- Ebrey, Walthall, Palais, (2006). East Asia: Cultural, Social, and Political History . Boston: Houghton Mifflin Company. ISBN: 0618133844
- Del Mar, A History of Money in the Ancient State from the Past to the Past
- Gernet, Jacques (1962). Everyday Life in China on Eve Invasion of Mongol, 1250-1276 . Stanford: Stanford University Press. ISBNÃ, 0-8047-0720-0
- Richards, R. D. Early history of banking in the UK . London: R. S. King, 1929.
Further reading
- Alvarado, Ruben, Follow Money: Money Through History, WordBridge 2013.
- Jevons, W. S. (1875), Money and Exchange Mechanisms. London: Macmillan.
- Menger, Carl, "About the Origin of Money"
- Szabo, Nick, Shelling Out - The Origin of Money
- Weatherford, Jack (1997), The History of Money. New York: Crown Publishers.
External links
- The Marteau Beginning 18th Century Currency Converter A Research Platform in Economic History.
- Linguistic and Commodity Exchange by Elmer G. Wiens. Examine the structural differences between exchange of barter and monetary commodities as well as oral and written linguistic exchange.
- Historical Currency Conversion Page by Harold Marcuse. Focused on converting German value to US dollar since 1871 and inflating it to today's value, but has a lot of additional information about the history of currency exchange.
Source of the article : Wikipedia
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