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Today I will tell you a story about something that you, your parents and most of the people in the world have been using in order to live a more decent life: money. And what is money after all?
Money is generally a physical object, with some kind of written symbol, which is used to trade for goods and services. These objects and symbols continuously evolve and change as time passes.
Before money, human communities used to trade things of value for other things, or services in exchange for other services, or a combination of both. For example, if you would give me a chicken, I would give you some grains in exchange. This type of trade is called barter.
But in the time between bartering and the invention of coins, in Ancient China people were using shells and bones, and on some islands in the Pacific Ocean people used stones or dog teeth.
As human communities evolved, their growing number of assets (goods) had to be put in storage. This habit first appeared in the Ancient Orient, in Egypt as well as in Mesopotamia, somewhere between the Tigre and Euphrates rivers (today’s Iraq). They used to store goods in temples or palaces. In Babylon, people started to develop the first trading rings (different from coins) made from silver, copper or lead. In Egypt, they refused to use lead coins because they considered this metal to be cursed.
Mesopotamia was the first to introduce words like ‘merchant,’ ‘to buy’ or ‘purchase price’ to the world. They used to say in Nineveh, an ancient city, that “there are more merchants than stars on the sky.”
Babylonians invented the first monetary system in the human history. They evolved from bartering grains to exchanging shekels. A shekel could be made of silver or gold. Later, the shekel was made of various types metals, so they created the first “money.” A silver shekel was worth between 8 and 235 iron shekels, a golden shekel had a value of 6 silver shekels, and 60 golden shekels counted as a ‘mine’ and 60 mines were a ‘talent.’
(Here I will make paper shekels, mines and talents and show the trade properly).
Greece also integrated talents into their system and soon they became a well-used currency spread across the ancient world. So, this is how the first monetary system in the world began and it all started in Mesopotamia. The document that records the first known cash flow is the Code of Hammurabi, who was the sovereign of Babylon in 18th century BC.
However, the first real coins appeared in the Lydia Kingdom (today’s Turkey) and they were made of silver and gold, equally proportioned and consistent in weight to guarantee their exact value — this was in the 7th century BC. Greek cities also integrated these coins, and then in 6th century BC Athens and Corinth introduced their own currency called ‘drachma’ (600 drachma = 1 talent). In 5th century, Pythius, a Greek merchant, is claimed to be the first banker.
When the Roman Republic conquered Greece, the Mediterranean region is now under Roman economical domination. Soon after the Roman Republic became an empire and a new currency is established: dinar (silver coin), libra (copper) and aureus (gold). After a series of civil wars and new conquests for the Roman Empire, Constantine the Great introduced a new coin, solidus, to reestablish global economy under Roman rule in the 3rd century AD.
Now we will go to the first medieval period, after the fall of the Roman Empire, where countries were now independent and have their own currencies. In Medieval Germany they had bactreat — tin coins, in England was sterling — silver coins, Austria had kreutz — coins engraved with a cross symbol, and Italy used florins — golden coins. There were also coins that were used across the European continent, just like Euros nowadays.
You are probably wondering when the first paper money will first arise… well, the first paper money appeared in China in the 8th century and soon it was used in Japan, India and Persia and was brought to Europe by Marco Polo. By the time Gutenberg invented the first printing press, Leonardo Da Vinci had updated his inventions in order to print money.
In the 17th century, the European economy is based on banknotes (paper money) as well as coins. During this time period, English and Scottish banks appeared, and we know now that they counted coins as half of their money currency, the rest being represented by banknotes.
The Industrial Revolutions of the 18th and 19th centuries instigated the rising of numerous banks and a new banknote appeared starting 1786, the dollar (thaler). In the 20th century, the American continent went through a flourishing period of its economy thanks to massive trades with Europe after the First World War, followed by the Great Crisis (or Great Depression) caused by the American over-production of goods and services. This crisis was ended by President Franklin D. Roosevelt.
Soon after the Second World War, the will to unite European countries led to the Euro in 1999, which was then integrated in the monetary system in 2002. The reason behind euros and dollars was to maintan a stable economy where countries on the same continent could trade and make transactions easier. This is why we now have so many products from all around the world and you can see movies and hear music from so many countries. You can check out the currency exchange shops in your city! You will see something similar to what we discussed earlier about trading coins: 1 Euro = 4.5 lei (lei = Romanian currency — it can be any currency).
Nowadays money represents the reason why people all around the world stick together, but also the reason why people fight or divide. Many successful businessmen and women say that we need to give money a numerical value, rather than an emotional one. Which means that if you lose some money one way or another you shouldn’t feel upset, or cry about it. Feel the same peace or indifference when you lose 1000 euros as you feel when you lose 1 euro.
As Jonathan Swift once said: “A wise person should have money in their head, but not in their heart.”
