Rhetorical Device has published an article entitled “A Brief History of Money” which answers some questions I’ve had lately. The piece provides an overview of the history of financial exchange, including:
- Bartering at Mesopotamian markets and the limitations of this system (“for a trade to occur each person must have something the other wants, and must have it at the right time”).
- The introduction of the “Barley Standard”, which is similar to the modern gold standard, but using grain instead of precious metal.
- The advent of “abstract value” and the subsequent scourge of usury.
It’s not hard to imagine how difficult it must have been to bring a large supply of agricultural goods (live sheep, ceramic urns full of grain, and so on) to market. This physical problem led to the creation of tiny clay tokens formed into shapes representing various commodities. These tokens were swapped at market to make exchanges that were later fulfilled with actual deliveries. This proto-money is the first recorded use of a material abstraction to represent a real object in communication.
This piece is short but informative. Vocubulary is linked to the wikipedia, and the author has provided ample footnotes. In the wrong hands this could be a dry topic, but this article moves briskly, and the tone is lively.
Silver’s practical value to the ancients was essentially nil, but — rather like the peacock’s tail — the ability to expend resources on adornments was an important status marker. Silver’s value was derived entirely from its uselessness and scarcity, which made it valuable for being valuable in much the same way that Paris Hilton is famous for being famous. As if to make the wealth-status connection as obvious as possible, the Sumerians — who never minted coins — pioneered Bronze Age bling in the form of spiral silver armbands in even multiples of the shekel.