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Once upon a time, thousands of years
ago, people used no money at all. These
people were living in extended family
groups and survived by hunting and
gathering. The men hunted and the women
gathered and took care of the children
and built the shelter and made the
clothing and tended the sick and so
on. The men would bring meat home from
time to time but, as is the case with
all hunters, sometimes they had no
luck or bad luck. In those times the
people survived on what the women and
children gathered. In short, the women
could get along just fine without the
men and usually did because the men
were off hunting anyway most of the
time. But the men depended upon the
women to stay alive.
Therefore when women in various
places invented agriculture by domesticating
some animals and actually fostering
the growth of edible plants, the
women no longer were willing to go
off to new hunting grounds just because
the men couldn't find many animals
to hunt (having killed off most of
them) or because the animals were
migrating elsewhere. The women said
something like, "I'm staying
here with the kids because I have
a big investment in this land and
in this house I have built and in
the fences I made to restrain the
goats. If you leave, you're on your
own." No doubt the men got huffy
and left, swearing that the women
couldn't live without them but came
back later when they got hungry enough
and blustered something about the
game coming back soon anyway.
Now when they were nomadic, the
people could get things like flint
for tool making and salt and other
things which they needed that weren't
available all over by traveling from
time to time to where the things
were found. But when they settled
down in just one place, they still
needed those things so they either
had to make long pilgrimages or trade
with those groups and families who
were still nomadic. Trade was found
to be the easiest way to get things
done because some were better at
traveling and other groups were better
at farming. Over time, trade routes
and trading circles arose in which
the needed items flowed in both directions
among various sets of trading partners.
Traded items might go hundreds or
even thousands of miles. People became
quite dependent on these trade relations.
Families would even arrange marriages
for their children which supported
such trades. The age of specialization
was just getting started.
Time passed and the farming groups
became more skilled in their agricultural
practices and they accumulated considerable
tools and other capital (like houses
and storerooms) that made their farming
more successful and dependable. In
some regions, they even developed
irrigation. But these "capital
goods" were not mobile in most
cases. It is difficult to move 500
yards of fencing, for example, or
a mud brick house. The farmers began
to store large quantities (large
for the day and time) of food since
their harvest was seasonal and the
farms could produce food only part
of the year. (Yes, it was the women who invented various means of preserving
food.)
That stored food looked awfully
good to the hungry hunters of the
nomadic groups when they were unsuccessful.
With their families on the brink
of starvation (for whatever reason)
the hunters would actually take food
from the farmers by force. After
all, the hunters were killing animals
and the same tools which will kill
an antelope will also kill a person.
So in some cases raids on the farmers
became more frequent.
The farmers, to defend their property
and their lives, would build defenses
such as fences (walls) around their
villages. As the villages grew larger
and the populations of those villages
became greater, some of the men became
specialists in defending the village.
Of course if they are fighters, they
aren't growing food so they have
to be given food and clothing and
so forth.
While these changes were taking
place, money was being invented independently
and unintentionally in each of these
agricultural centers. Goods that
could be transported long distances
had to be relatively small, light,
and valuable. Otherwise they would
not be worth the effort to transport
them. These goods, therefore, would
be acceptable in a trade even if
the person accepting them already
had more than enough of that item
to meet their own needs. In this
way, traders could work out trades
to get what they wanted, even though
it meant making more trades than
if they could directly trade
their
own product for someone else's wares.
In other words, if you had corn to
trade and wanted a sheep dog, you
no longer had to find someone with
a sheep dog who wanted corn. You
could trade your corn to anyone who
had extra salt and trade that salt
with anyone who had a sheep dog to
trade.
This made salt one of the more common
commodities that was used as a medium
of exchange. But there were any number
of things which were used in this
fashion. Those which worked the best,
held value over time, did not deteriorate,
and which were attractive to the
most people, tended to become well-known
and thought of as being particularly
acceptable in trade.
By this time government (those fighting
men again) was coming to be important.
Those who defended the village discovered
that they could use force to get
themselves paid even if there was
no immediate threat from hunting
groups. It was the old "protection
racket" in its early days.
Thus were taxes invented.
Since the fighters were setting the
terms, they would
demand the items most useful for
trade as their pay. As government
expanded, villages became what we
would now call small cities, and
the number of people became larger,
the fighters discovered that they
could "protect" more than
one village at a time. All they had
to do was replace the protectors
of that other village. Whole regions
came to be governed by single groups
of warriors (now they were warriors
because they had developed the art
of war). Trade was getting more important
because the warriors had
to buy more elaborate defenses and
weapons. The government needed better
forms of the media of exchange that
made trade easier.
Previous: Idle Capacity: A Form Of Insanity
Next: A Brief History of Money: Part II
Related Articles:
Time for a New Theory of Money by Ellen Brown
The
History of the "Money Changers" by Andrew Hitchcock
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