Money, money, money!

It is the alpha and the omega of finance, the reason people go into business, the life and death of some and the bane of others. Whatever it means to you it is here to stay BUT in what form? It has been around for thousands of years and not in the form you may be thinking. Sure you’ve heard of barter, swapping, credit notes but where did it all begin?

No one could ever know who and when created something for someone else. I mean if you’re religious at the dawn of time Eve passed Adam the apple after a long day of toil in the garden so he took a grateful bite and the subsequent high road along with Eve that job didn’t last long so he’d need another, this time one with rewards not exile.

There are few written records as you can understand and even less of actual money but it is thought money in some form emerged some 30,000 years ago. The first likely transactions before were of a swap or barter action. Fred’s got a nice animal bone chopping axe Ted wants it or similar so offers to swap one of his newly acquired goat hides in exchange. It seems plausible this is the way it was for thousands years with parties agreeing on an equivalent to swap. Because this happened before recorded history no one truly knows but the best guess is that at some point a second system appeared . Things like conch shells and glass beads as an attractive item would be used. This kind of transaction would need agreement as to the value the shells or beads were in relation to an item probably in a city or within several towns or villages and like today you could assume some people sold their goods cheaper than someone else. This was really the age of the “barter” system and the “money” system, the beads or shells being the equivalent of money. this evolved into two different types of money. “Money of exchange” and “money of account.” We know this because tally sticks have been found dating back 20-30,000 years this would be a form of accounting so people could buy what they wanted and the tally stick was marked accordingly depending on the value. “I owe you” is what the tally stick represents and a record of that was kept. The money of exchange was as simple as previously where you would exchange goods for equivalent value goods.

Some 7000 years ago in Mesopotamia there are documents showing lists of expenditures and goods received or traded. This proves that these systems were in use long before actual money appeared. At this point the “I owe you” became “I owe you one unit of something.” That unit of something became money. In Egypt, Babylonia, India and China they had clay tokens probably embossed to avoid copying after no doubt it was discovered they were being copied. They could be traded at warehouses or markets. Eventually metals both common and precious would be used, who doesn’t like a shiny piece of metal the Romans used bronze these were all called “representative money” in use long before coins. Bronze was useful for blacksmiths to turn into tools and weapons which is why it made sense as relative money. First they used a rough bronze, the next step was to use 5lb bars of bronze signed so as to the weight and quality of the bronze. Of course strictly speaking this could still be a barter system, bronze for goods but later the debate was settled as the Romans used lighter bars of bronze clearly not meant for the smithy but to be used in a sense as money. It wasn’t the first time this idea had been used but this is the clearest example of the transition from barter to coins.

As always the geographical cradle of civilisation started it when the Mesopotamians used “commodity money” a “shekel” the equivalent of a bag of barley first recorded around 5000 years ago. Although before that gold & silver were used which were still barter though not coins. The simple answer is as I said at the beginning no one truly knows exactly when coins became acceptable but at least now you know how it came about.