Materia: Englez

Elev: Teodorescu Ioana

Specializare: E.C.T.S
Anul: I

History of money

The history of money concerns the development of means

of carrying out transactions involving a physical medium of
exchange. Money is any clearly identifiable object of value that is
generally accepted as payment for goods and services and
repayment of debts within a market or which is legal tender within
a country.
Many things have been used as medium of exchange in
markets including, for example, livestock and sacks of cereal
grain (from which the Shekel is derived) things directly useful in
themselves, but also sometimes merely attractive items such
as cowry shells or beads were exchanged for more
useful commodities .Precious metals from which early coins were
made fall into this second category.
Money, one of the
earliest and most significant inventions of civilization, is essential
to the development of trade. Without it there is only barter, a
relationship between two people each of whom has something
which the other wants.
Money (which everybody wants) provides an
intermediary substance, enabling the seller to choose when and
where he wishes to become a buyer.
All primitive societies invest certain things with a special value particularly livestock, and items of rarity or beauty. They are
presented on ceremonial occasions such as weddings. The
possession of large numbers of cattle or pigs is clear evidence of
wealth and prestige.
But these objects are not money in our sense, capable of
easy use in everyday transactions.
The most often quoted example of primitive money is
shells - in Africa cowries and wampum in America. The small
cowrie shell, deriving from the Maldive Islands in the Indian
Ocean, is a treasured item in the civilizations of China and India
from very early times. From India these attractive objects are
carried along the trade routes to Africa. Similarly the American
Indians use a small white cylindrical shell for ceremonial gifts,
embroidered on to decorated belts or other ornaments. Europeans

give the name 'wampum' to these precious items.

Both
wampum and cowries eventually become a market currency, in
the conventional sense, but only after the arrival of Europeans .
The earliest currency used in
commercial transactions appears in Egypt and Mesopotamia by
the third millennium BC.
It consists
of gold bars which need to be weighed to establish their value
each time they are exchanged. Later they are supplemented by
gold rings for smaller sums. In about 2500 BC an extensive trade,
at Ebla in modern Syria, is based on currency of this kind in silver
and gold.
Gold rings and
ornaments, which can be worn for safe keeping as well as display,
approach the ideal of a portable currency. Many poor women in
India today still wear their limited wealth in this way, even when
working in the fields or on the roads.

Conclusion
No other subject in economics has been studied longer or
more intensively than the subject of money. The result is a vast
amount of documented experience and a well-developed body of
theoretical analysis.
The extent to
which the students of monetary problems agree in their basic
conclusions is concealed by the tendency of laypersons to
exaggerate their differences.
But even among professional
economists there remain important disagreements, centring
mainly on empirical judgments about the stability and form of
some of the relations between money and other economic
phenomena.