The social figuration of Homo sapiens
When the population started to settle down permanently, there was a big change in their living conditions as well. All of them could not do farming concurrently. Various different things were needed. For example, if someone is a cloth maker, someone can make a shoe. Labourer, carpenter, clinician/ medical practitioner, etc. Secondly everybody could not grow the same thing at a time. Some were growing this and some were that. Some were doing gardening/horticulture. In such a situation, exchange was necessary so that everyone’s work would continue.
That is, if someone has apples, he could get shoes by giving some apples, or he could get wheat or rice. A medical practitioner could give the medicine to someone expecting that he would get him to do labour the next day. But this sort of exchange is a very complicated system for an economy. Because the exchange was based on the need, the price to be paid could have to be fixed every time. Let’s consider this as a model that if a hundred different commodities are traded in the market, then the buyer and seller need to know the exchange rates up to about five thousand and with increasing items, these rates will increase in the same proportion.
For example, you take shoes from a cobbler but you have apples to exchange which he does not need, he wants to get a haircut instead. Then you find a hairdresser in the market who will take your apples and cut that cobbler’s hair but what if that hairdresser already has apples? There was a need for a central exchange system to deal with these problems that are, something that has the same value in every situation and using it as a kind of guarantee you can do any kind of exchange. Then the concept of money established.
Use of money
Money has been created many times and in many places. A coin or note alone is not money. Money is any item that people can use for the systematic representation of the value of other goods or services. Its value was constant and no brain scratching was required for an exchange. The most recognised money is a coin, that is a standardized piece of printed metal, but ‘money‘ has been in existence long before its invention. Earlier civilizations thrived using cowries (conch), cow, oxen, leather, salt, grain, beads, cloth and ‘Ikari Rukke’ as ‘currency‘.
Cowries have been used as money for 4000 years across Africa, Asia and the maritime continents. Taxes in the form of cowries have been paid in Uganda during the British Raj until the early years of the twentieth century. Cigarettes have been paid for as money in modern jails and in prison camps.
Non-smoking prisoners have also been willing to accept cigarettes as payment and assess the value of other goods/facilities with cigarettes. ‘Money’ is still a universal medium for exchange. ‘Money’ although is no physical reality, it is valued in our shared imagination but it is the most successful medium of exchange.
In 3000 BC, Sumerians used ‘barley‘ as money, i. e. barley money which was straight barley, made in the form of a sila which was roughly equal to one litre. Salaries were also offered as barley Silas. A male labourer earned sixty Silas and a female labourer thirty silas a month. They could also be eaten and the remaining sila could be used to buy other items but there were many problems with this. It was a difficult task to save, store and transport it.
Then in the middle of the third millennium BC, in ancient Mesopotamia money came in the form of a ‘Shekel’ which was not a coin but rather 8.33 grams of silver, which could not be used in agriculture nor in war, nor in eating but in it was easy to collect or transport.
The first coins of history were invented in 640 BC in West Anatolia by King Alyattes of Lydia. These coins had a standard weight of gold or silver and had an identification mark on them. This sign used to be a kind of declaration that it was a value set by the state system and copying it meant rebellion from the state, the punishment of which could even be death.
Since the people relied on the power and integrity of the king, therefore even the strangest people readily trusted the most prevalent Roman coin, a denarius. The power of the emperor also depended on the denarius. Imagine if denarius was replaced by barley sila, in the far-flung power, barley would be collected in the form of taxes, be carried to Rome and then carried back to the soldiers and staff as salary.
The trust in the coins of Rome was so tremendous that it had the same acceptance outside the empire like that of the dollar and it was an accepted medium of transaction in the first century even in India, thousands of kilometres away from Rome.
The belief of Indians in denarius was that when they later minted their own coins, they closely imitated the denarius including the picture of the Roman emperor. The Muslim Caliphs also issued ‘dinars’, Arabicizing it. In many countries including Jordan, Iraq, Serbia, Macedonia, Tunisia, ‘dinar’ is still the official currency.
At the same time as the coins of the Lydean style were spreading from the Mediterranean to the Indian Ocean, China developed a slightly different monetary system based on bronze coins and unmarked ingots of gold and silver. There was a substantial similarity between these two currency systems that close monetary and commercial relations were established between the Chinese and the Lydean region and further Muslim and European traders and conquerors carried the silver-gold currency of the Lydean system to the distant corners.
By the later period of the modern era, the whole world had turned into a single monetary zone, which has relied on gold and silver initially and later on some trusted currencies like the British pound and the US dollar.