ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

The History of Money

Updated on February 14, 2016
one2get2no profile image

Philip retired from investment banking to write. To date he has written 9 books on trading forex, 3 short stories, and one poetry book.

What is Money

The history of credit and banking goes back much further than the history of coins. Nevertheless, the story of the origins of money goes back even further still. What is money? A normal everyday man or women would probably be of the same opinion that coins and bank notes were money. However, would the same men and women acknowledge that they would accept coins or notes from them from any country in the world? Would you accept coins or notes from say China? How about checks?

What is Money
What is Money

Gold

You would probably be less willing to accept them than your home country's coins and notes. Believe it or not bank account money in reality accounts for by a long way the greatest proportion by value of the total supply of money. Now what about IOU’s, credit cards and gold? Are these things money?

Even though the gold standard has past into history, today many well-off people in many parts of the world would prefer to keep some of their riches in the form of gold than in inflation-prone currencies. Its attractiveness, its aesthetic value, and its non-corrosive nature are two of the properties which led to its use for monetary transactions for many thousands of years. In complete contrast, a form of money with absolutely no tangible properties at all, electronic money, seems to have gained rapidly in popularity.

A mixture of things have been used as money at different times in different places. The list below which has been taken from page 27 of a History of Money by Glyn Davies includes but a small percentage of the huge variety of primitive moneys, and none of the modern types such as oil, wheat and the so called synthetic monies.

Amber, beads, drums, eggs, feathers, gongs, ivory, jade, leather, mats, nails, oxen, pigs, rice, salt, vodka, and yarns.


The Functions of Money

It is not possible to define money in terms of its physical form or properties since these are so different. Therefore any definition must be based on its functions such as:

Specific functions (mostly micro-economic)

  • Unit of account (abstract)
  • Common measure of value (abstract)
  • Medium of exchange (concrete)
  • Means of payment (concrete)
  • Standard for deferred payments (abstract)
  • Store of value (concrete)

General functions (mostly macro-economic and abstract)

  • Liquid asset
  • Framework of the market allocative system (prices)
  • A causative factor in the economy
  • Controller of the economy

Not everything used as money has all the functions listed. Also the functions of any particular form of money could and will probably change over time. What is now the main function in a particular community or country may not have been the prime function in the past and indeed may not be the main function in the future. Furthermore, what may well have been a secondary function in one place may in some other region be the prime function which gave rise to a related secondary function. Therefore the list of functions in the table has no definite order of priority or importance. The list being static only reflects a particular time and place. Glyn Davies in his book ‘The History of Money’ page 28 concludes that the best definition of money is: ‘Money is anything that is widely used for making payments and accounting for debts and credits.’

Modern money, and most ancient money, is fundamentally a token, with an intrinsic value dependent on supply and demand.

Comments

    0 of 8192 characters used
    Post Comment

    • Vinaya Ghimire profile image

      Vinaya Ghimire 

      6 years ago from Nepal

      Valuable metals were used as money before paper money evolved. Paper money evolved in China.

      This was an interesting read.

    • one2get2no profile imageAUTHOR

      Philip Cooper 

      8 years ago from Olney

      You are welcome

    • prasetio30 profile image

      prasetio30 

      8 years ago from malang-indonesia

      I like money very much. I think all people like too. thanks for share the history about money.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)