Livestock + Grain
To Barter or Not to Barter?
Contrary to popular belief, the idea that bartering pre-dates the invention of other forms of currency is now seen as unlikely.1 The reason? Bartering is extremely inefficient. Historically, people engaged in barter economy as a supplement to other forms of payment.
With the rise of agriculture, animals like cattle, sheep, camels and other livestock, along with sacks of grain, were used as traditional “stores of value.” Cattle were even called “capital” in latin, which is where we get the work “capital.”2
Cowrie shells are the small, colorful shells of a certain type of sea snail found in the Pacific and Indian Oceans, and have been used as currency all over the world.3 Individually or strung on necklaces, they represented everything useful in a currency small, divisible, and durable.4
Besides the lumps of gold and silver in Turkey, the earliest coins took on shapes like knives, spades, and ships’ hulls.6
The first coins were put into use in the seventh century Turkey. Not exactly round, they were small lumps of a gold and silver mixture called electrum, often with a pattern stamped on one side. Despite their irregular shapes, early coins were held to strict weight standards.6
In addition to the first paper money, China also invented first “banknotes,” made of leather. One foot square and decorated with patterns and a fringed border, princes were required to purchase these notes at a price of 400,000 copper coins, and to present gifts to the emperor on them.7
The Tang Dynasty of China was the first to put paper money into use, nearly 500 years before it caught on in Europe. But early experiments weren’t without pitfalls: China went through a financial crisis when the paper money productions grew until its value bottomed out, causing massive inflaction.8
The Gold Standard
Through the Nose
The phrase “pay through the nose” has it’s origins in ninth century Ireland. When the Danes conquered the island, they took census by “counting noses,” imposing high taxes on each nose.”9
Britain was the first country to adopt the gold standard as the fixed value of their currency. Germany, France, and the U.S. followed suit in the 1870s. By 1937, in the wake of the Great Depression, not a single country remained fully on the gold standard, and in 1971, the U.S. fully suspended it.10
The Atlantic, February 2016
Federal Reserve Bank of Atlanta, 2017
National Bank of Belgium Museum, 2017
University of Missouri Museum of Anthropology, 2017
British Museum, 2017
Time, April 2017
Encyclopedia Britannica, 2017
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