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Author Topic: Possibly could have been asked before but who invented money?  (Read 23308 times)

Offline Totty

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I've always wondered that...  [?]

And what did they do before money? Swap things? Or steal? Weird!  ;D


 

another_someone

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Possibly could have been asked before but who invented money?
« Reply #1 on: 08/12/2007 01:05:03 »
I've always wondered that...  [?]

And what did they do before money? Swap things? Or steal? Weird!  ;D

The still do steal - money did not stop that.

Otherwise, yes, it is generally assumed that barter, of some kind, pre-dated that.

The term 'money' itself comes Roman heritage; but the idea of using standard token goods (such as precious metals, rare sea shells, or cocoa beans, or any other rare but highly sought after and durable commodity) as a reference value by which to value other items of desire is as old as civilisation, ans was used from the Middle East to Meso-America, or even amongst the tribes of North America when the Europeans first arrived there.  This is not money in the sense that it is not a State controlled, or State guaranteed unit of value, but it was a tradeable commodity that could be used to buy things.  Even in more modern times, when there was a breakdown in confidence in the national currency (such as in mainland Europe in the aftermath of WWII) people would revert to token commodities (such as the use of cigarettes as a unit of currency after WWII).
 

Offline stana

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Possibly could have been asked before but who invented money?
« Reply #2 on: 14/12/2007 19:50:12 »
In my 14 years of life. I have never before thought about or heard that question. Thanks for asking  ;D

The first written records of the use of money date from 1200BC, in the area of land now known as Southern Algeria, although then it was covered with water.

Before money they Bartered

Bartering is the word we give to a system known as bartering. This involved exchanging goods rather than paying for them. Bartering was invented in Ancient Egypt around the time of Moses. It meant that, for instance, a bag of potatoes might be swapped for a tin of peaches, or a candle may be swapped for a brown shawl made out of potato sacking, or whatever it was they wore in those drab times. Legend has it that Marco Polo swapped his owls for a ship, without which he couldn't have circumnavigated right around the world, in 987AD.

Coins were the first to be invented. But the Romans got sick of carrying 100s of coins around with them, hence they made bank notes

Frustrated that they could not carry loose change in their togas, the Romans invented paper money around 1000AD. When Emperor Claudius ran out of money, he wrote IOU notes, promising that he would pay 100,000 lira (that's about 2 shillings) to his debtor.

Below is a picture of the earliest ever bank note found
 

Offline Bored chemist

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Possibly could have been asked before but who invented money?
« Reply #3 on: 15/12/2007 19:07:09 »
"Bartering is the word we give to a system known as bartering."
 

Offline stana

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Possibly could have been asked before but who invented money?
« Reply #4 on: 15/12/2007 19:47:00 »
"Bartering is the word we give to a system known as bartering."



Elaborate?
 

Offline Bored chemist

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Possibly could have been asked before but who invented money?
« Reply #5 on: 16/12/2007 13:07:12 »
Well, you wrote it, I wonder if you would care to tell us what it means?
 

Offline stana

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Possibly could have been asked before but who invented money?
« Reply #6 on: 16/12/2007 16:30:50 »
That the word bartering is given to the system known as bartering?
 

another_someone

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Possibly could have been asked before but who invented money?
« Reply #7 on: 16/12/2007 22:26:29 »
That the word bartering is given to the system known as bartering?

I think the comment that Bored Chemist was making is that it is a self referential statement - and so says nothing in external terms.

To put it another way, I could suggest that the thelicodysan is given to the system known as thelicodysan - it is just as true as the statement you made, but says nothing meaningful until one first defines what is intended to be meant by the word thelicodysan.
 

another_someone

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Possibly could have been asked before but who invented money?
« Reply #8 on: 17/12/2007 02:59:23 »
The first written records of the use of money date from 1200BC, in the area of land now known as Southern Algeria, although then it was covered with water.

No mention of Southern Algeria in any reference I can find.

A lot depends on what you mean by the word 'money'.  Standard units of exchange have been available available since far earlier than 1200BC, but coinage is not that old.

http://en.wikipedia.org/wiki/Trade#Development_of_money
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The first instances of money were objects with intrinsic value. This is called commodity money and includes any commonly-available commodity that has intrinsic value; historical examples include pigs, rare seashells, whale's teeth, and (often) cattle. In medieval Iraq, bread was used as an early form of money. In Mexico under Montezuma cocoa beans were money.

Currency was introduced as a standardised money to facilitate a wider exchange of goods and services. This first stage of currency, where metals were used to represent stored value, and symbols to represent commodities, formed the basis of trade in the Fertile Crescent for over 1500 years.

Numismatists have examples of coins from the earliest large-scale societies, although these were initially unmarked lumps of precious metal.

Ancient Sparta minted coins from iron to discourage its citizens from engaging in foreign trade.

The system of commodity money in many instances evolved into a system of representative money. In this system, the material that constitutes the money itself had very little intrinsic value, but nonetheless such money achieves significant market value through scarcity or controlled supply.

http://en.wikipedia.org/wiki/History_of_money#The_emergence_of_money
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The use of proto-money may date back to at least 100,000 years ago. Trading in red ochre is attested in Swaziland, from about that date, and ochre seems to have functioned as a proto-money in Aboriginal Australia. Shell jewelery in the form of strung beads also dates back to this period[1] and had the basic attributes needed of early money. In cultures where metal working was unknown, shell or ivory jewelery were the most divisible, easily storeable and transportable, scarce, and hard to counterfeit objects that could be made. It is highly unlikely that there were formal markets in 100,000 B.P. (any more than there are in recently observed hunter-gatherer cultures). Nevertheless, proto-money would have been useful in reducing the costs of less frequent transactions that were crucial to hunter-gatherer cultures, especially bride purchase, splitting property upon death, tribute, and inter-tribal trade in hunting ground rights (“starvation insurance”) and implements.

In the absence of a medium of exchange, all of these transactions suffer from the basic problem of barter — they require an improbable coincidence of wants or events. Overcoming this without money requires some system of in-kind "credit" or "gift exchange", restricting trade to those who know one another.

Before money they Bartered

The problem is where do you define the boundary between barter and money?

If I swap 10 cows for a bar of gold, am I bartering or am I using money (is that bar of gold money?).

You could argue that it is only money if it has a guarantee by the State, but that is primarily of significance where the intrinsic value of the money is different from the face value of the money (e.g. where the face value of the money differs from the value of the gold when it is melted down).  To understand when that might first have happened you would have had to know what the price of gold was at the time the currency was minted.

Coins were the first to be invented. But the Romans got sick of carrying 100s of coins around with them, hence they made bank notes

Frustrated that they could not carry loose change in their togas, the Romans invented paper money around 1000AD. When Emperor Claudius ran out of money, he wrote IOU notes, promising that he would pay 100,000 lira (that's about 2 shillings) to his debtor.

Below is a picture of the earliest ever bank note found



No - below is a picture of the first known bank note:

http://en.wikipedia.org/wiki/Paper_currency
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The use of paper money as a circulating medium is intimately related to shortages of metal for coins. In ancient China coins were circular with a rectangular hole in the middle. Several coins could be strung together on a rope. Merchants in China, if they became rich enough, found that their strings of coins were too heavy to carry around easily. To solve this problem, coins were often left with a trustworthy person, and the merchant was given a slip of paper recording how much money he had with that person. If he showed the paper to that person he could regain his money. Eventually from this paper money "jiaozi" originated. In the 600s there were local issues of paper currency in China and by 960 the Song Dynasty, short of copper for striking coins, issued the first generally circulating notes. A note is a promise to redeem later for some other object of value, usually specie. The issue of credit notes is often for a limited duration, and at some discount to the promised amount later. The original notes were restricted in area and duration, but the Yuan Dynasty, facing massive shortages of specie to fund their occupation of China, began printing paper money without restrictions on duration. By 1455, in an effort to rein in economic expansion and end hyperinflation, the new Ming Dynasty ended paper money, and closed much of Chinese trade.
 

Offline opus

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Possibly could have been asked before but who invented money?
« Reply #9 on: 20/12/2007 18:42:40 »
The Aztecs used cocoa beans as money!
 

another_someone

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Possibly could have been asked before but who invented money?
« Reply #10 on: 21/12/2007 04:41:05 »
The Aztecs used cocoa beans as money!

The only issue here is while you are not wrong (although, as I indicated above, it rather depends on what you regard as money), but the main issue is that Aztec empire existed in the 14th to 16th century, so while it may have been a stone age culture, it was not chronologically earlier than the use of money in Europe, or Asia.

http://en.wikipedia.org/wiki/Aztecs#Economy
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The Aztec economy was an example of a pre-capitalist commercial economy. Several types of money were in regular use. Small purchases were made with cacao beans, which had to be imported from lowland areas. In Aztec marketplaces, a small rabbit was worth 30 beans, a turkey egg cost 3 beans, and a tamale cost a single bean. For larger purchases, standardized lengths of cotton cloth called quachtli were used. There were different grades of quachtli, ranging in value from 65 to 300 cacao beans. One source stated that 20 quachtli could support a commoner for one year in Tenochtitlan. A man could also sell his own daughter as a sexual slave or future religious sacrifice, generally for around 500 to 700 beans. A small gold statue (approximately 0.62 kg / 1.37 lb) cost 250 beans. Money was used primarily in the many periodic markets that were held in each town. A typical town would have a weekly market (every 5 days), while larger cities held markets every day. CortÚs reported that the central market of Tlatelolco, Tenochtitlan's sister city, was visited by 60,000 people daily. Some sellers in the markets were petty vendors; farmers might sell some of their produce, potters sold their vessels, and so on. Other vendors were professional merchants who traveled from market to market seeking profits. The pochteca were specialized merchants organized into exclusive guilds. They made lengthy expeditions to all parts of Mesoamerica, and they served as the judges and supervisors of the Tlatelolco market. Although the economy of Aztec Mexico was commercialized (in its use of money, markets, and merchants), it was not a capitalist economy because land and labor were not commodities for sale.
 

Offline opus

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Possibly could have been asked before but who invented money?
« Reply #11 on: 22/12/2007 01:04:33 »
I was not suggesting that the Aztecs were the earliest people to use 'money', I was simply offering another example of bartering through history.......
 

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Possibly could have been asked before but who invented money?
« Reply #11 on: 22/12/2007 01:04:33 »

 

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