The Mystery of Money © Bernard Lietaer
209
October 2000
Commodity money: The first appearance of money is typically the use as currency of a product or commodity that has also a well-established utilitarian value. Many so-called “primitive” currencies are of that type. They include for example eggs, feathers, hoes, kettles, leather, furs, tobacco, raw metal ingots, mats, nails, oxen, pigs, rice, salt, or bronze ingots.507 The last two are illustrated in photos. For instance, the derivation of the word “salary” can still be traced directly to the widespread use of salt as currency in parts of the Roman Empire (it derives from sal, salis = salt in Latin). Even in Modern times during periods of acute civil or military disorders, such currencies reappear spontaneously. Photo 7.1a ¼ page This happened, for example, with cigarettes-ascurrency on the front of World War II, or more recently with Marlboro packs during the breakdown of the Soviet Empire in Eastern Europe. Authority-Issued Standardized Coinage One step up in Photo 7.2 ¼ page sophistication from simple Salt bar of the kind used in payments in Ethiopia as th late as the 19 century. It was made from natural salt commodity rock, cut manually into specific sizes, and wrapped in money appears reeds to protect them during transport and handling. when an This shows a case of transition from commodity authority money to standardization. Weighing each bar may guarantees its not be necessary at each transaction, but there is not composition, yet an authority to guarantee the standard. quality and quantity; and thereby standardizes the currency. This From bars of various sizes and weights, evolved typically because it makes the use of the currency the next step is standardization, as is more convenient. shown here in bronze ‘dolphin’ ingots in Photo 7.3 1/8 page standard sizes and weights from Olbia, For instance, one northern shore of the Black Sea in the 5th used to have to century BC. verify the purity and weight of metals used as commodity-money at each trade. Then in 687 BC a king in Lydia, an area where a lot of gold was Electrum, a mixture of gold and silver naturally occurring in Lydia, was the first being discovered at that time, decided to standardize crude standardized precious metal coinage. This coins on which he imprinted his seal. Such a process particular Lydian coin from 7th century BC happened in many places with different types of shows the seal of a local authority. commodity currency because there is a benefit to the issuer of having his currency accepted. He can charge a seignoriage fee for the service. The word derives from the Old French Seignor meaning the Lord.
507
Glyn, Davies: A History of Money from ancient times to the present day (Cardiff: University of Wales Press, 1994) pg. 27