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Origin and Evolution of Money Essay Sample

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Origin and Evolution of Money Essay Sample

Money, as we know it today, is the result of a long process.

At the beginning, there was no money. People engaged in barter, the exchange of merchandise for merchandise, without value equivalence.

Then, a person catching more fish than the necessary for himself and his group, exchanged his excess fish for the surplus of another person who, for instance, had planted and harvested more corn that what he would need. This elementary form of trade prevailed at the beginning of civilization, and may be found today among people of primitive economies, in regions where difficult access makes money scarce and, even in special situations, where people barter items without regard for their equivalence in value. This is the case, for instance, of a child who exchanges with his friend an expensive toy for another of lesser value, which it treasures.

Goods used in barter are generally in their natural state, in line with the environment conditions and activities developed by the group, corresponding to elementary needs of the group’s members. This exchange, however, is not free from difficulties, since there is not a common measure of value among the items bartered.

Commodity Money

Some commodities, for their utility, came to be more sought than others are. Accepted by all, they assumed the role of currency, circulating as an element of exchange for other products and used to assess their value. This was the commodity money.

Cattle, mainly bovine, was one of the mostly used, and had the advantages of moving for itself, reproducing and rendering services, although there was the risk of diseases and death.

Salt was another commodity money, difficult to obtain, mainly in the interior part of continents, also used as a preservative for food. Both cattle and salt left the marks in the Portuguese language of their function as an exchange instrument, as we keep using words such as pecunia (money) and pecúlio (accumulated money) derived from the Latin work pecus (cattle). The word capital (asset) comes from the Latin capita (head). Similarly, the work salário (salary, compensation, normally in money, due by the employer for the services of an employee) originates from the use of sal [salt], in Rome, for payment of services rendered.

Brazil used, among other commodity moneys, cowry – brought by Africans –, Brazil wood, sugar, cocoa, tobacco and cloth, exchanged in Maranhão in the 17th Century due to the almost complete lack of money, traded in the form of yarn balls, skeins and fabrics.

Later, commodities became inconvenient for commercial trades, due to changes in their values, the fact of being indivisible and easily perishable, therefore checking the accumulation of wealth.

Metal

As soon as man discovered metal, it was used to made utensils and weapons previously made of stone.

For its advantages, as the possibility of treasuring, divisibility, easy of transportation and beauty, metal became the main standard of value. It was exchanged under different forms. At the beginning, metal was used in its natural state, and later under the form of ingots and, still, transformed into objects, from rings to bracelets.

The metal so traded required weight assessment and assaying of its purity at each transaction. Later, metal money gained definite form and weight, receiving a mark indicating its value, indicating also the person responsible for its issue. This measure made transactions faster, as it saved the trouble of weighing it and enabled prompt identification of the quantity of metal offered for trade.

Money in the Form of Objects

Metal items came to be very valued commodities.

As its production required, in addition to knowledge of melting, knowing where the metal could be found in nature, the task was not at the reach of everyone.

The increased value of these objects led to its use as money and the circulation as money of small-scale replicas of metal objects.

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