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What Forms Has Money Taken over History?

Mary Elizabeth
Updated May 23, 2024
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Money is a medium of exchange that is agreed upon by a society, can be used in exchange for goods and services, and is an indicator of value. Money is considered to be an improvement over barter, in several practical ways:

  • Money is systematically organized, with divisions that work (one cannot trade half a cow without killing the cow).
  • One can acquire goods even if the products of one’s own individual labors are not of interest to the seller.
  • Money doesn’t have a built-in time limit, as some bartered goods may, after which they lose value (for example, bread growing stale).
  • Money is of a manageable size and shape, unlike some barter standards, such as cattle.

Money met these criteria in early times by being made of items that are small, light, and of generally recognized value. Items such as arrowheads, animal hides, salt, butter, cacao beans, and tobacco leaves. These commodities closely related to food, warmth, and the home, had similar intrinsic value to nearly everyone in the societies in which they were used. Objects of precious metal were also sometimes used, with weight being the deciding factor in assessing value.

As the use of money developed, it did not have to have value in itself, and symbolic objects, rather than items of essential and immediate necessity, began to be used. Cowrie shells were used as currency in a number of countries, mainly in Asia and West Africa, as were beads from the clamshells called wampum in the United States.

Paper currency came into use in tenth century China, and its use was spread by the ruler Genghis Khan in the thirteenth century. The use of paper currency, and other types of money without intrinsic value, depends on the widespread acceptance of their symbolic value.

In Europe, at first, paper money was something like a voucher, a written guarantee of an amount of worth from the person who held the coin that backed it. But in the eleventh century, governments began printing money, and paper money began to become regular, with set values, sizes, and shapes. Today, credit card companies try to convince us that we don’t need money, and that even checks are outdated.

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Mary Elizabeth
By Mary Elizabeth
Passionate about reading, writing, and research, Mary Elizabeth is dedicated to correcting misinformation on the Internet. In addition to writing articles on art, literature, and music for Language & Humanities, Mary works as a teacher, composer, and author who has written books, study guides, and teaching materials. Mary has also created music composition content for Sibelius Software. She earned her B.A. from University of Chicago's writing program and an M.A. from the University of Vermont.
Discussion Comments
By pastanaga — On Mar 17, 2014

@croydon - It's a nice idea, but I think there's a reason that humankind has spontaneously developed the concept of money so many times in so many different cultures. It's very difficult to tell someone who studied for 10 years that their time is worth the same amount per hour as someone who happens to have a knack for gardening. There is very little incentive for people to specialize to the point where we need them to in our modern civilization if they don't have the reward of more money at the end of their day.

By croydon — On Mar 16, 2014

@Ana1234 - I'd rather that we didn't use money in it's present form at all, to be honest. I like those initiatives that people have started in a lot of cities where they have a "bank" that helps them to exchange their skills directly in terms of time. So, someone can put in an hour of helping out with gardening in exchange for someone else giving them some language tutoring.

Money just complicates life by encouraging people to assign false values to worthless things. In my ideal world, everyone would be entitled to enough food and shelter and necessities to live comfortably, and then they could exchange their time and energy for any little extras that they want.

By Ana1234 — On Mar 15, 2014

It is actually a rather scary thought when you consider how much money in the world is completely virtual. It's basically just a bunch of numbers in a computer system and there is no real goods backing it up.

I don't know much about economics, but the idea that all it would take is a computer glitch to completely wipe the record clean really makes me nervous. I can definitely identify with people who hoard money in their mattress, as at least you've then got something physical that isn't going anywhere.

Mary Elizabeth
Mary Elizabeth
Passionate about reading, writing, and research, Mary Elizabeth is dedicated to correcting misinformation on the...
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