History of Money

Money as we know it has undergone a long process of development. At first, people do not know the exchange because everyone is trying to meet kebutuhannnya their own. Humans hunt if he is hungry, make their own clothes from simple ingredients, look for fruits for their own consumption; nutshell, that's what he got used to meet their needs.

Further development of human mengahadapkan on the fact that what is produced alone was not enough to memenuhui all needs. To obtain items 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 ', which is the goods in exchange for goods.

But in the end, many of the perceived difficulties with this system. Among these are difficult to find people who have the desired item and want to exchange its goods and difficulties to obtain goods that can be exchanged with each other to exchange value equal or nearly equal in value. To fix this, start the thoughts arise to use certain objects to be used as a medium of exchange. Defined objects as a means of exchange that are the objects received by the public (generally accepted), selected objects of high value (difficult to find or have magical and mystical values), or objects that is a primary need day-to- day, for example salt used by the Romans as a medium of exchange or as a means of payment. The influence of the Romans are still visible to this day; British people call wages as salary comes from the Latin meaning salarium salt.

Although the means of exchange existing difficulties in the exchange remain. These difficulties were partly due to objects that have not been used as a medium of exchange so that the determination of the fractional value of money, storage (storage), and transportation (transportation) becomes difficult and also difficulties arise due to the lack of durability of these objects so easily destroyed or not durable.

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

Along with economic development, difficulties arise when the development of the exchange to be served with a coin increased while the amount of precious metals (gold and silver) is very limited. Use of the coin is also difficult to deal large amounts of paper money that was created

First banknotes in circulation is 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 that is stored on the smart gold or silver and can be redeemed at any time full guarantee. In further developments, 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 old money) is basically a sign - 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 important properties of money.

Non-monetary exchange: barter and gifts

Contrary to popular conception, there is no evidence of a society or economy that relied primarily on barter. Instead, non-monetary societies operated largely under the principles of gift economics. When bartering is really happening, it's usually between two strangers or potential enemies.

With barter, someone with a material object of value, as the grain size, can directly exchange objects to other objects are considered to have the same value, such as small animals, clay pots or tools. The ability to conduct transactions is very limited because it depends on some chance want. Seller foodgrains must find a buyer who wants to buy wheat and also can offer something in return, the seller wants to buy. There is no common medium of exchange where sellers and buyers can change the items that 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 the donation as a form of reciprocal altruism. Another interpretation is that social status is given in return for the "gift". Consider, for example, the distribution of food in some hunter-gatherer societies, where the sharing of food is a protection against the failure of the daily foraging individuals. These habits 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 town later developed the first economic system than we think right now in terms of the rules on debt, legal contracts and law codes relating to commercial practices and private property. The money is not just appearance, it is a necessity.

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

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

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

commodity money

Bartering has several problems, including that it needs a "coincidence want." For example, if a wheat farmer needs what farmers produce fruit, it is impossible to directly exchange seasonal fruit would spoil before harvest. One solution is to trade the fruits of grain commodities indirectly by the three "middle": the fruit is exchanged for finished products when the fruit is ripe. If this demand is not high commodity perish and reliable throughout the year (eg copper, gold, or wine), it can be exchanged for grain after harvest. The function of intermediate commodities as a store of value can be standardized in a common commodity money, reducing the chance to problems. By overcoming the limitations of simple barter, commodity money making in all the other markets that are more liquid.

Many cultures around the world and then develop the use of commodity money. Ancient China and Africa are used cowries. Trade in Japan's feudal system was established in koku - a unit of rice per year. shekel was an ancient unit of weight and currency. The first use of the term is from Mesopotamia around 3000 BC and is called the specific weight of barley, the other values in a metric such as silver copper etc., barley bronze / shekel was originally both units in a currency and unit weight.

Where the general trade, barter systems usually lead quite rapidly for several major products due benevolence money. In the early English colonies New South Wales, rum emerged quite soon after the completion of the market produce the most money. When a country is often adopt a currency without foreign currency. In prisons where conventional money is prohibited, it is very common for a cigarette to take monetary quality, and throughout history, gold has made unofficial monetary function.

standard currency

Historically, metal, if any, have generally been favorable to be used as a proto-money on products such as cattle, cowrie, or salt, as 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 weighing defined as a medium of exchange, as has been done previously in Mesopotamia with silver bars. The first ruler who was formally established standards for weights and money Pheidon. The first coin stamped (marked by an authority in the form of pictures or words) can be seen at the National Library in Paris. It is a piece of electrum stater of a turtle, found on the island of Aegina. This remarkable piece dated around 700 BC. Electrum coins were also introduced around 650 BC in Lydia.

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

This is the touchstone discovery paves the way for commodity-based currency and coin. 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 hard to find, dense, and storable. As a result, monetary gold spread very quickly from Asia Minor, where it gets used widely around the world.

Using the system still required several steps and mathematical calculations. Touchstone for estimating the amount of gold in an alloy, which is then multiplied by the weight of finding the amount of gold in one piece. To facilitate this process, the concept of standard currency was introduced. The rooms have been pre-weighed and pre-alloyed, as long as the manufacturer is aware of the origin of the coin, do not use a touchstone required. Coins minted by the government in general in the process of carefully protected, and then stamped with the symbol of a guaranteed weight and value of the metal. However it is 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.

Even though gold and silver have been commonly used for coins, other metals may be used. For example, ancient Sparta coins minted from the metal to prevent citizens from engaging in foreign trade. At the beginning of the 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, the right stamp with an indication of value.

part of the precious metal has the advantage of producing a value in its own coin - on the other hand, they induced manipulations: cutting parts in an effort to obtain and recycle precious metals. A big problem is the simultaneous co-existence of gold, silver and copper coins in Europe. British and Spanish merchants values gold more than silver coins, like many of their neighbors are doing, stating that the British Guinea coins containing silver began to rise against the British crown in 1670 and is based in 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 stocks. This effect is compounded by the Asian traders not sharing the European appreciation of gold as well -. Gold and silver leaves Asia left Europe in the number of European observers like Isaac Newton, Director of the Mint has observed with concern.

Stability has come into the national banking system that guarantees to change the money into gold at the promised level, there has not been easy. The risk of the Bank of England in the 1730s a national financial disaster when customers asked for their money will turn to gold in times of crisis. Finally, a London merchant bank rescue and the nation with financial guarantees.

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