Evolution of Money Brando Arimborgo & Neha Bolla
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ave you ever asked yourself how humanity spends most of their time working, and in return receive a piece of paper with a person at the front and a number next to it or even further, just some numbers on a screen? This wasn’t always the case, and here is how what we consider money has changed over time. At first, humans exchanged goods for things they had found. Then they started to cultivate and specialise, resulting in trading becoming a necessity. The issue with trading a good for another is that you assume that both parties would like each other’s product, but if one doesn’t, then the trade doesn’t occur. Now, if in this scenario both parties were trading things they wanted but didn’t need, that would be okay. However, if it’s a matter of exchanging food for a shirt, and one party already has enough shirts, then the person wanting to trade the shirt wouldn’t be able to survive. This results in the need for a third good that both parties want, and mutually agree has value. Money itself in its physical form, or nowadays, in its digital form, has no intrinsic value. It is only given value through a collective belief in it. The very first form of money originated
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around the time of the domestication of cattle. Livestock and plant products were used as money since they were durable, long-term, practicable, and scarce. Alcohol then becomes more popular, along with tools and even limestone doughnuts. If you think about the value of money in the past, you’ll think of commodity money because there is intrinsic value in the commodity itself. From the establishment of the first cities in Mesopotamia (3000 BCE) came clay tablets, recording grain from farmers. These clay tablets represented the value of the grain, allowing them to be used as a medium of economic exchange. From around 1000 BCE onwards, the first manufactured coins began to appear separately in India, China, and cities around the Aegean Sea. All modern coins appear to have descended from coins invented in the kingdom of Lydia around the 7th century. Paper money was introduced in the Song Dynasty in China during the 11th century. Paper money’s roots come from merchant receipts of deposits, as wholesalers required more convenient and practical representations of value rather than large quantities of coins. Paper money became
