University:
College
Course:
College Psychology
Academic year:

2023
Views:

288

Pages:

1
Author:

martindbroli

The Evolution of Money The Evolution of Money Money can be described as a central to human civilization for thousands of years. Evidence suggests early forms of money emerged independently across ancient civilizations as expanding economies required a more flexible medium of exchange than barter. Ancient money took various forms including commodities like cattle, shells or metals weighed out as a unit of value (Davies, 2002). Coins were first minted in Lydia around 700-600 BCE, enabling standardized valuation and easing trade (Cook, 1958). Adoption spread as coinage was a useful innovation for growing empires like Greece and Rome in equipping armies and administering colonies (Jevons, 1875). The Middle Ages saw a regression to less centralized money as coinage was debased. But the rise of commerce again increased demand for an impersonal, widely accepted medium of exchange (Spufford, 1988). Banknotes developed in medieval China as receipts for precious metal deposits. By the 17th and 18th centuries, paper money and fractional reserve banking were spreading through Europe (Quinn & Roberds, 2007). The 19th century brought important shifts as governments asserted greater control over currency issuance, money supplies, and monetary policy (Helleiner, 2003). So by the mid 20th century, most currencies were fiat money with values regulated but not directly tied to gold or silver reserves (Eichengreen, 2008). In the postwar period, deregulation and technological advances enabled an explosion of new financial instruments and practices (Strange, 1986). Electronic banking, digital currencies like Bitcoin, and shadow banking illustrate money’s ongoing evolution in fueling modern capitalism (Cooper, 2015). Critics argue speculative finance has become detached from money’s fundamental purpose of facilitating exchange (Ingham, 2004). In short, money has transformed from ancient stores of intrinsic value like cattle or coins to today's sophisticated intangible electronic funds that reflect complex credit cycles.