For Most Of History People Didn't Use Money

Before the invention of coinage in around 650 B.C., primitive societies relied on bartering to exchange goods. For example, if you were a hunter-gatherer and needed some eggs, you could go into your neighbor's hut and take them. But what if your neighbor wanted eggs? What if you also had some shoes that you didn't need? Bartering would be complicated in this situation.

That's when the wheels started rolling on the idea of money.



Not everyone was accepting of it, though; Aristotle, for example, believed that bartering was natural and monetary exchange was a corruption of the economy. Any numismatist would agree.

At first, money was anything from cows to shells

For instance, in Southeast Asia, cowry shells from the Indian Ocean were used as currency as early as 700 BC. The ancient Chinese people traded silk themselves, but they eventually settled on coins after trying out several other substances—like bronze and gold. Though coins from China have been found as far away as the United Kingdom, most were used domestically.

In ancient Rome, money took a different form that we still use today: credit

Roman society had a decentralized but communal system for a long time where people could borrow from their neighbors and repay them later with interest. They called it "societas argentum," or silver partnership.

Debt wasn't always an easy thing to pay off, though

It could lead to slavery, as Cicero points out in one of his speeches: "There are a set of people who can never repay their debt no matter how much they try; some by their own free will, some involuntarily."

He talked about slaves—or "servi"—who were often used to pay off debts. If you were indebted and had no money or goods to give, the lender could take you as collateral for his loan. If you couldn't pay him back, later on, he would keep you as his property.

Eventually, people tired of an economy that was so unstable and unreliable

Around 600 BC, the Lydians in western Asia Minor began experimenting with coined money of gold and silver called "electrum." But one king named Croesus wanted something even better, so he came up with the idea of stamped money.

He placed an insignia on electrum coins to indicate their purity, weight, and value. This made them the first "official" coins. And they were a big hit. The Lydian word for these coins was "siglos," where we get our modern term "dollar."

Ancient people didn't have a lot of options when it came to forms of money

What they did have went from shells to cows to bars of silver and gold. Even our word "dollar" comes from the name of an ancient king who decided that stamped coins would be better than regular ones. This development in monetary history eventually led to the rise in trade and commercialization.

We've come a long way since then

Now we have credit cards, debit cards, checks, and even online money transfers. The only question is: where will we turn when our coins and paper bills run out? Cryptocurrency or cows and shells?

No comments