History of Money

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Find out how money changed the world through progress.

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History of Money

  1. 1. Discover how money made History of Money progress possible
  2. 2. Why history of money matters Money changed the world through division of labor and specialization. Money is the foundation of progress. Money IS Power! - the power to evolve mankind, but we have to set money free..to continue enjoying the benefits.
  3. 3. Why money was invented To make life easier. :) With money we are able to buy a wider variety of goods than before - in the barter economy - where one good is directly trader for another. And expand time - we can save money for future use, wait for a better opportunity
  4. 4. What is Money? Medium of Exchange - a commodity that is valued and demanded for its own use, before becoming used as money. • Store of Value - a benefit of money - being able to store the products of our labor. • Unit of Account - another benefit - being able to make business calculation.
  5. 5. How money originated At first people traded directly one good for another - barter economy. Then some goods were used as medium of exchange to obtain other goods - indirect exchange. Today we are still using a sophisticated form of indirect exchange.
  6. 6. Barter exchange Barter means that one good is directly exchanged for another. For example, a fisherman may exchange a bucket of fish for 50 eggs. Limitations are that the scope of goods to trade for is very limited. For instance, it can be harder to find a willing buyer for a violin than bread. And the time of trade is limited - I can not be sure that my fresh fish will be demanded in the future.
  7. 7. Indirect exchange Money allowed to trade a wider variety of goods. Now a violin maker could exchange his violins for money and then buy whatever he needed. He no longer had to convince a shoe-maker to trade shoes for violin. Money could be saved for later use, for a better trade opportunity. Thus freeing up time for innovation and specialization - resulting in more and better goods. Photo by Vladstudio.com
  8. 8. How money changed the world Division of labor, specialization and progress. Joe the hunter now can trade his game for money, buy all he needs and save part of it for future. He doesn’t have to make all of his equipment himself anymore. He can buy it with money. Thus he can spend more time hunting and improving his skills. And through improving skills and knowledge he can get more game in shorter time. His quality of life has improved. His world has changed.
  9. 9. Change in perspective Money originated in free-market as a valuable commodity. Can you imagine a fisherman trading a basket of fish for a small piece of paper? Or would he rather choose a bushel of grain? The answer is obvious, because grain is valuable. A good will only be used as money if it is valuable. Our paper money used to have value - it could be exchanged for gold. Not anymore. Now it is just a small, worthless piece of paper.
  10. 10. A better question Here is a challenge for you - don’t ask “how to get more money”. Instead, ask yourself: How can we return to a sound money - a money of value? (hint: read about gold standard)

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