The history of Money

The history of Money

The history of Money
The money that we know it today has undergone a long development process. At first, people are not familiar with the exchange because everyone is trying to meet kebutuhannnya with their own business. Humans hunt if he was hungry, make your own clothes from simple ingredients, look for fruits for their own consumption, in short, what is gained is what used to meet his needs.

Subsequent developments in the fact that human mengahadapkan what is produced is not enough to meets the entire needs. To acquire goods that can not be produced by themselves, they look for people who want to exchange goods with other goods owned by him required. As a result came the barter system ', namely goods exchanged for goods.

But in the end, many of the perceived difficulties with this system. Among these are difficult to find people who have unwanted items and also want to exchange its goods and the difficulty to obtain the goods that can be interchanged with each other with the exchange value of a balanced or nearly equal value. To overcome this, the thoughts begin to arise for the use of certain objects to be used as a medium of exchange. Objects defined as an exchange of objects that are received by the public (Generally Accepted), the selected objects of high value (hard earned or has the magical and mystical), or objects that are the primary needs of day-to- day, for example salts by the Romans used as a medium of exchange and as a means of payment of wages. Roman influence is still visible to this day; the English call a wage as a salary derived from the Latin meaning salarium salt.

Although the medium of exchange already exists, there remain difficulties in the exchange. These difficulties were partly due to the objects used as a medium of exchange has not been broken so that the determination of the value of money, storage (storage) and transportation (transportation) to be too hard to do as well as difficulties arising from lack of durability of these objects are so easily destroyed or not durable.

Then came the so-called coin. Metal was chosen as a medium of exchange because it has a high value so that the public favored, durable and not easily broken, easily broken down without reducing the value, and easily moveable. Metal is used as a medium of exchange for meeting these requirements is the gold and silver. Gold and silver coins are also referred to as full of money (full bodied money). That is, the intrinsic value (the value of materials) of money equal to its nominal value (value on the currency). At that time, everyone is entitled to forge money, merge, sell or use, and have unlimited rights in storing coins.

In line with economic developments, difficulties arise when the development of the exchange which must be served with a coin increases while the amount of precious metals (gold and silver) are very limited. The use of coins is also difficult to deal large amounts of paper money that was created

At first banknotes in circulation is the evidence of ownership of gold and silver as a tool / brokers to conduct transactions. In other words, paper money in circulation at that time the money is guaranteed to be 100% by gold or silver stored in the smart gold or silver and can be redeemed at any time is full of assurances. In further development, the public no longer use gold (directly) as a means of exchange. Instead, they make 'paper-proof' as a medium of exchange.

History of money for thousands of years. Numismatics is the scientific study of money and its history in all its forms.

Many articles have been used as commodity money such as naturally scarce precious metals, cowries, barley, pearl, etc., as well as many other things that are seen as having value.

Modern money (and the old money) is basically a sign - an abstraction in other words, a. Paper currency is perhaps the most common type of physical money today. However, objects of gold and silver has many essential properties of money.

Non-monetary exchange: barter and gifts
Contrary to popular conception, there is no evidence of a society or economy that relies primarily on barter. In contrast, non-monetary societies operated largely under the principles of gift economics. When barter is really happening, it is generally between two strangers, or potential enemies.

With barter, one with a material object of value, as the grain size, can directly exchange objects to other objects considered to have the same value, such as small animals, clay pot or appliance. The ability to conduct transactions is very limited because it depends on a few happen to want. Foodgrains seller should look for buyers of grain and also can offer something in return, the seller wants to buy. There is no common medium of exchange in which the seller and the buyer can change the goods can be traded them. There is no standard that can be applied to measure the relative value of various goods and services.

In a gift economy, goods and services that are useful on a regular basis without the explicit consent given for reward or future (ie no formal quid pro quo). Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community.

There are several theories about social economics prize. Some see donations as a form of reciprocal altruism. Another interpretation is that social status is given in exchange for "gifts". Consider, for example, the distribution of food in some hunter-gatherer societies, where sharing food is a protection against the failure of the daily foraging individuals. This habit may reflect altruism, can be a form of informal insurance, or can bring with it social status or other benefits.

The emergence of money
Mesopotamian civilization developed an economy based on large-scale commodity money. The Babylonians and their neighboring countries and develop the city's first economic system than we think today in terms of the rules on debt, contract law and code law relating to commercial practices and personal property. The money is not just appearance, it is a necessity.

Law Code of Hammurabi Code of the best preserved ancient ca, has been made. 1760 BC (middle chronology) in ancient Babylon. It was adopted by the sixth Babylonian king, Hammurabi. Earlier collections of laws including the Code of Ur-Nammu, king of Ur (ca. 2050 BC), Eshnunna Code (ca. 1930 BC) and code-Ishtar of Isin pleated (around 1870 before JC). Formal legal codes of the role of money in civil society. They fix the amount of interest on the debt ... fined for 'malpractice' ... and monetary compensation for breach of formal law.

The Shekel reference to an ancient unit of weight and currency. The first use of this term comes from Mesopotamia around 3000 BC. and return to the density of the barley that other values ​​that are involved in copper etc. metrics such as silver, bronze barley, / shekel was originally both units and one unit of hard currency, because the pound sterling-denominated unit initial mass of a pound of silver.

In the absence of exchange, non-monetary societies operated largely under the principles of gift economics.

commodity money

Bartering has several problems, including that it requires an "accidental want." For example, if a wheat farmer in need of what farmers produce fruits, the direct exchange is impossible for seasonal fruit will damage prior to harvest. One solution is to trade the fruits of wheat indirectly by commodity, the three "medium",: fruit is exchanged for semi-finished products when the fruit is ripe. If this intermediate commodity does not perish and reliable demand throughout the year (eg copper, gold, or wine), it can be exchanged for grain after harvest. Function of secondary commodities as a store of value can be standardized in a common commodity money, reducing the chance to matter. By overcoming the limitations of simple barter, commodity money making in all other markets more liquid.

Many cultures around the world and develop the use of commodity money. Ancient China and Africa are used cowries. Trading in the Japanese feudal system was established in koku - the unit of rice per year. shekel is an ancient unit of weight and currency. The first use of this term comes from Mesopotamia around 3000 BC and is called the specific weight of barley, other values ​​in a metric such as silver copper, etc., barley bronze / shekel was originally located on the second unit of currency and unit weight.

Where the general trade, barter systems usually lead quite rapidly to a few key products due benevolence money. In the early British colony of New South Wales, rum emerged quite soon after the completion of that money market products at the most. When a country without a currency is frequently adopt a foreign currency. In prisons where conventional money is prohibited, it is very common for cigarettes to take monetary quality, and throughout history, gold has made unofficial monetary function.

Standard currency

Historically, metals, if any, have been generally favorable for use as a proto-money on products such as cattle, cowries, or salt, because they are both durable, portable, and easily shared. The use of gold as proto-money has been traced back to the fourth millennium BC when the Egyptians used gold bars with a weight defined as a medium of exchange, as has been done previously in Mesopotamia with a silver bar. The first ruler who has been formally established the standards for weights and money Pheidon. The first coins stamped (marked by the authority in the form of pictures or words) can be seen at the National Library in Paris. This is a stater of elektrum a turtle, found on the island of Aegina. It's amazing the date around 700 BC. elektrum coins were also introduced around 650 BC in Lydia.

Coins have been widely adopted across Ionia and mainland Greece during the 6th century BC, eventually leading BC Athenian Empire in the 5th century, the dominance of the region through their export pieces of silver, mined in southern Attica and Thorikos Laurion. A major discovery of silver in Laurion vein in 483 BC led to the expansion of the Athenian military fleet. competing standard coin at that time managed by Phocaea Mytilene and the use of elektrum; Aegina used silver.

It is the discovery of the touchstone that paved the way for commodity-based currency and metal coins. soft metal can be tested for purity touchstone, to quickly calculate the total metal content into one. Gold is a soft metal, which is also difficult to find, dense, and storable. As a result, monetary gold spread very quickly from Asia Minor, where he gets used widely around the world.
Using the system still required several steps and mathematical calculation. Touchstone to estimate the amount of gold in an alloy, which is then multiplied by the weight of the gold found in one piece. To facilitate this process, the concept was introduced a standard currency. Rooms have been pre-weighed and pre-alloys, as long as the manufacturer was aware of the origin of the coin, do not use a test is required. Coins are minted by the government in general in a carefully protected process, and then stamped with the symbol of guaranteed weight and value of the metal. But it's very common for the government to argue that the value of the fund is a symbol, and thus further reduce the value of the currency by reducing the precious metal content.

Although gold and silver have been commonly used for coins, other metals may be used. For example, ancient Sparta coins minted from iron to prevent citizens from engaging in foreign trade. In the early seventeenth century Sweden does not have a more noble metal and if the "plate money" products, a large sheet of copper about 50 cm or more in length and width, right stamp with the indication of value.
part of the precious metal has the advantage of generating value in the coins themselves - on the other hand, they induced manipulations: the cuts in an effort to get and recycle the precious metals. A big problem is the simultaneous co-existence of gold, silver and copper coins in Europe. English and Spanish merchants value of gold over silver coins, like many of their neighbors are doing, which states that the English Guinea gold coins containing silver began to rise against the crown of England, based in 1670 and 1680. Therefore, the money was eventually removed to England for dubious amounts of gold into the country at a pace that no other European country shares. This effect is exacerbated by Asian traders not sharing the European appreciation of gold as well -. Gold and silver left Europe in the amount of leave Asia European observers like Isaac Newton, Director of the Mint has observed with concern.

Stability has come into the national banking system by guaranteeing to change money into gold at a rate that was promised, yet there is easy. Risk Bank of England in the 1730s a national financial disaster when customers ask for money they will turn to gold in times of crisis. Finally, save the London merchant bank and the nation with financial guarantees.

Another step in the evolution of coin currency is a unit of weight change to unit value. distinction can be made between the value of the commodity and its value in cash. The difference is these values ​​is seigniorage.

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