When The Man With the Money made his appearance, we not only did not know his name, we also did not know where the money came from. We didn't at that time care where the money was coming from, as that it was being handed out to us free of charge. I think even in the realm of the conscious we don't care where the money we get comes from, as long as it comes out of someone else's pocket and finds its way into ours.
Have you ever stopped to consider where money comes from? Well, some of you will tell me that it comes from the mint, and/or the Bureau of Engraving and Printing if you're resident stateside. Others are aware that it is issued by banks, and others will say that you get it by working. There are all sorts of answers to the question "Where does money come from?" and I think that you will also get several answers if you ask the question "Just exactly what is money, anyway?". I think in order to get a grasp on how to answer these two questions, we need to examine just how it was that money came to be invented.
It is commonly accepted that as of this writing, we have had 5000 years of civilization.....maybe 6000. Well, let's split the difference and say that civilization itself was invented 5500 years ago, OK? I think it's safe to say that 5500 years ago the human species were speaking languages, organized into families and tribes, and that the prime function of your average human being was day to day survival. Survival would have come from learning how to harvest food, learning how to hunt for it, and also in the domestication of livestock in order to get food and clothing. Somewhere along the way some trades emerged, as that people were figuring out how to make bricks and cut wood. They were figuring out how to dig ore out of the ground and to convert it into metal. Various occupations were beginning to emerge.
The thing of it is about specializing in an occupation, is that if you're a builder, what you build isn't something that you can eat. So what you do is you build a house for somebody, and that somebody gives you some food, or maybe some livestock with which to turn into food. What you have now is trade. In this simple example, trade is done by the barter system. There isn't any money involved since no one commodity has yet emerged as a common commodity to trade or to use as a reference in fixing a value onto something or some other commodity.
About 3000 BC or thereabouts, the Egyptians were aware of gold. It was first used as a form of adornment but it also emerged as a measure of wealth. It wasn't the only measure of wealth. In the Book of Genesis, Chapter 13, Old Testament patriarch Abram, as he was then know, is described as being very wealthy in livestock, silver, and gold. What this is telling us is that wealth, at that time, was viewed in terms of two precious metals and livestock. Any one of these commodities could be traded for any of the other two commodities, as well as for any other commodity. Thus, we already have a system of economics in place, and although it was still based on barter, gold and silver start to emerge as a convenient medium of exchange. I guess that you could call this "money" in a somewhat loose sense, but if you're defining money as "coins" of a uniform standard or of a common currency (cigarettes and whiskey have been known to function as money) we're not quite there yet as far as money being invented.
Around 600 BC, that began to change. The historian Heredotus credits the Lydians of Asia Minor as being the world's first producer of coins. They were made out of electrum, a gold-silver alloy that flowed to them out of a nearby alluvial plain. They found that these were convenient units of exchange, and they also found that those they traded with to obtain their goods also liked these units of exchange. Coins quickly spread to being used by the Greeks, and later on, the Romans, as well as other kingdoms.
With the invention of coins, some other things were invented too.
That will be the subject of my next entry.
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