The History of Money by Jose Ramon Ramirez Sanchez

15

HISTORY OF MONEY A brief history of money

By JOSE RAMON RAMIREZ SANCHEZ

History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo, Domincan Republic/ 24-04-2015/Introduction to Digital Currency. Pgina 1

Jose Ramon Ramirez Sanchez

(Santo Domingo, Dominican Republic, 1970). English Teacher (Expert in American

Phonetics) Social Media Manager; Creator of methodologies based on natural

English language; Quality Auditor ISO 9001: 2008; Virtual Tutor; coach person;

Entrepreneur of English mixed with technology, and community leader. Being the

second of 10 children, at the age of nine years began his passion for the English

language, inspired by the films '' SATURDAY NIGHT FEVER '' and '' Grease ''. In

addition, he also had his own business, but his fondness for English begin to not

be demonstrated until much later half of his studies of Education in 2003.

Jose Ramon Ramirez has 5 children: Bryan (20), Sting (11), Russell (8),

Frederick (5) and Melanie (3).

He has worked in various schools, colleges, business school, virtual universities,

and charitable foundations. Teacher Ramirez is a fan of Virtual Education. He has

completed four technical courses and has about 450 virtual graduates in different

universities worldwide.

His motto is:

- '' The Virtual Education is not a fashion, it is a necessity of modern man. ''

- '' With the emergence of the internet, we have returned to the era of the

ancient philosophers, where we can handle different topics, for knowledge is

diversified and is constantly updated. ''

- Knowledge has no boundaries.

- Learning is Eternal.


Also thinks that teachers today must teach English using digital resources and

technologies innovations. He believes that social networking is a perfect avenue for

language teaching due to impact. That is why the teacher Ramirez has created

about 40 sites related to English and technology on Facebook. In class, creativity,

dynamism, motivation, allowing students to use their technological tools, the use of

the images (flashcards, postcards, posters), games, twister, the leisure clubs,

social networks, online seminars and the use of video (Made by native speakers)

are the main tools for teaching English language. Currently, he works as a teacher

of English at the Technological Institute of the Americas (ITLA) in Caleta, Boca

Chica, Dominican Republic. Teacher Ramirez has his repository on Scrib platform

(5,500 views). On this platform, he has published nearly 100 academic Essays

based on different themes.


Index

1. Introduction

2. Nonmonetary exchange: Barter.

3. Aristotelian concept

4. Reviews

5. Economics gift

6. The emergence of money

7. Precious metals

8. Mesopotamia

9. Coining

10. Electronic money

11. Conclusion

12. Referencias


Fig.1. History of Money

1. Introduction

History of Money

The history of money begins around V to VII century BC to the first coinage. Money

is any object clearly identifiable value that is generically accepted for payment of

goods, services and debt in a market or what is legal tender within a country.

Since ancient times people have changed valuables, either in the exchange of gifts

or in markets where a common ticketing system is more convenient.

Not only have many goods used in exchanges that are directly useful in

themselves, such as livestock and cereal grain sacks, but merely attractive

features such as cowrie shells, were exchanged for more useful goods. This is the

case of precious metals, of which the first coins were made and that fall into this

second category.

Abstract

In the Neolithic, with the emergence of agriculture and animal husbandry,

appeared the first production economy and produced a surplus; a quantity of

goods which need not be consumed.This resulted in the ability to feed

people who did not need to work in agriculture or livestock and could devote

to produce other products, such as ceramics, and exchange the surplus

produced. This allowed the first form of trading, bartering, exchanging goods

and services directly by others. Over time, this type of exchange is

considered inefficient. With the passage of time, gold and silver were widely


used as money because their value is accepted worldwide, and also due to

the ease of transportation, the benefits of conservation and so on. To

guarantee or certify that a piece of metal or coin contained a certain amount

of gold and / or silver coinage began, as a guarantee or certification by

recognized and respected entities (kingdoms, governments, banks), which to

Prove the weight and quality of the metals contained. Coins third of stater,

minted in the early sixth century. According to Herodotus, the Lydian town

was the first to introduce the use of gold and silver, and also the first to

establish stores change in permanent premises. It is believed they were the

first to coin stamped coins, during the reign of Gyges, in the second half of

the seventh century. Other coin minting back to Ardis II. The first coin was

made of electro (alloy of gold and silver), with a weight of 4.76 grams, to pay

the troops in a manner regulated. The reason for the pattern was the head of

a lion, the symbol of royalty. The Lydian standard were 14.1 grams of

electron, and was a soldier's pay for a month of service; This measure was

called stater.

Fig.2.The Barter.

2. Nonmonetary exchange: Barter.

For a barter system function as such is necessary that each individual desires the

good of another and that the desired quantities match their availability. Indeed, in

exchange, an individual who possesses any surplus of goods, as a measure of

grain or livestock numbers may directly exchange it for something perceived value

similar or greater value, such as a clay pot or tool. The ability to conduct barter

transactions is limited, since it depends on a coincidence of wants. The seller of

grain has to find a buyer who wants to buy grain and could also provide change

something that the seller wants to buy. There is no standard measure agreed in

which the seller and the buyer could exchange commodities according to their

relative value of different products and services offered by other potential partners

barter. System is considered expensive in terms of time and effort it requires a

double coincidence of wants, ie, individuals have to find a counterpart who want

what they offer and offers exactly what they want.


Fig.3. The Politics 3 by Aristotele.

3. Aristotelian concept

In the book of Politics 3 (c.350 BC), Greek philosopher Aristotle considers the

nature of money. Aristotle believes that every object has two purposes, the first is

the original purpose for which the object was designed, and the second possibility

is to conceive the object as an item to sell or trade. Assigning a monetary value to

an object that otherwise would be negligible, as a coin or note, arises when the

townspeople and its partners develop the psychological capacity dipositar trust

each other and the external authority barter.

Fig.4.The Debt by David Graeber

4. Reviews

David Kinley believes that Aristotle's theory is flawed because the philosopher

probably lacked sufficient understanding of the methods and practices of primitive

communities, and thus may have formed your opinion, personal experience and

conjecture.


In his book Debt: The First 5000 years, anthropologist David Graeber argues

against the suggestion that money was invented to replace barter. The problem

with this version of the story suggests, is the lack of evidence. Their research

indicates that "gift economies" were common, at least in the beginning of the first

agrarian societies, when humans used elaborate credit systems. Graeber proposes

that money as a unit of account yet invented that unquantifiable obligation "I owe

you" becomes quantifiable concept of "I owe a unit of something." In this view,

money and credit first emerged as later acquired the functions of a medium of

exchange and store of value.

Fig. 5. The economy of the gift

5. Economics gift

The economy of the gift

In a gift economy, valuable goods and services are regularly given without any

explicit agreement for immediate or future rewards (ie, no Quid pro quo). Ideally,

simultaneous or recurring giving serves to distribute and redistribute valuables

within the community.

There are several social theories on gift economies. Some believe that the gifts are

a form of reciprocal altruism. Another interpretation is that "implied that I should"

debt and social status are granted in exchange for "gifts". Consider, for example,

the distribution of food in hunter-gatherer societies, where sharing food is a

safeguard against failure of any individual's daily diet. This practice may reflect

altruism can be a form of informal insurance, or can bring social status or other

benefits.


Fig.6. The emergence of money

6. The emergence of money

The difficulties inherent in barter led to use various goods to facilitate exchanges.

These converted into instruments of change general goods became the first forms

of money. Throughout history, we have used many types of goods as general

means of payment. Over time we have sought a stable value goods, high value

relative to their volume and available in sufficient quantities to the requirements. It

has also demanded that are easily storable goods that can be transported without

difficulty, divisible, unalterable and non-perishable.

Anatolian obsidian, used as raw material for the manufacture of tools in the Stone

Age was used as early as 12,000 BC a form of money, organized in the ninth

millennium (Cauvin; Chataigner 1998) trade. In Sardinia, where he was one of the

four main obsidian Mediterranean trade was replaced by copper and silver in the

third millennium.

Already in 9000 BC was used both grain and livestock as money or barter item

(Davies) (the first grain found is considered as evidence of the date of the pre-

agricultural practices in the 17000 BC). The importance of grain to the value of

money is inherent in the language in which the term of a small amount of gold was

"golden bean".

In the first cases of trade with money, most utility and reliability of the goods to be

reused and re-exchange (marketing), determined their choice as an object of

exchange. So in agricultural societies, the goods necessary for the production of

cereals in an efficient and convenient way were most easily acquired monetary

significance in direct exchanges.To the extent that the basic needs of human


existence were met, the division of labor which in turn helped create new activities

for the use of time and solve more advanced problems increased.As the needs of

the people became more refined, exchange indirectly, in the same way the

physical separation of skilled workers (bidders) of potential customers (demand)

required the use of a common medium became necessary all community, to

facilitate a wider market.

Fig. 7. Aristotle's view of creation of money as a new thing in society is:

When the inhabitants of a country became more dependent on each other, care

about what they needed, and they had exported surplus money necessarily

entered use.

Moneta worship is recorded by Livy with the temple built in Roman times 413

(123). A temple to the same god was built in the early fourth century (perhaps the

same temple) The temple contains the mint of Rome for a period of four centuries.


Fig. 8. Precious metals

7. Precious metals

According to the above criteria, the company was selecting some metals like gold,

silver and copper as optimal to operate as real money. These metals weight

circulated in principle, in the form of nuggets, powder etc.

The circulation of precious metals unminted great inconvenience caused by

difficulties arising on the weight and purity of the law or of the parts used. Traffic

safety coinage advised initially consisted of a simple seal or mark guaranteeing the

quality and weight of the pieces. Subsequently, to prevent fraud arising from

cutting the die cutting coins coins began.

Fig. 9. Mesopotamia around 2500 BC.

8. Mesopotamia

The use of precious metals as money originated in Mesopotamia around 2500

BC. Both in Mesopotamia and Egypt silver ingots were used by weight but not as

coins. Different legal code as the Code of Ur-Nammu, king of Ur (2050 BC), the

Code of Eshnunna (1930 BC), the code Lipit-Ishtar of Isin (1870 BC) and the Code


of Hammurabi (1760 BC) the best preserved ancient code, enacted by the sixth

Babylonian king, Hammurabi formalized the role of money in civil society, posting

payments in fixed amounts of silver pesos in debt interest... fines for crimes... and

compensation for various breaches of formal law. These codes came to reflect a

daily reality in this society, where next to silver, which was reserved for some

transactions, also the grain was used to measure the value of wages or food.

The Mesopotamian civilization developed an economy of scale based on

commodity money. The Babylonians and neighboring states developed the first

system of economics as we today in terms of the rules on debt, legal contracts and

codes of laws on commercial practices and private property. Money was not only

an appearance, but was a necessity.

Fig. 10. Coining

9. Coining

Until now had used various goods as money, consolidating the use of metals like

gold, silver and copper, for the advantages offered against other assets, using

these metals by weight. However towards the year 600 a. C. a significant novelty of

the birth of currencies while coin minting The first occurred around the year 600

occurs. C. in three places on the planet independently, in Lydia (Asia Minor), in

China and India. The metal is chopped into small portions and is marked with an

identification signal and currency whose specific function is to serve as money is

created.

From about 1000 BC, was in use in China money as small knives and swords

bronze and cast bronze replica of shells in use before this.


Fig. 11. Digital Currency

10. Electronic money

According to the definition in Wikipedia: Electronic money (also known as e-money,

electronic cash, electronic currency, digital money, digital cash or digital currency)

refers to money that either is issued electronically, through the use of a computer

network, Internet and digitally stored value systems as the case of Bitcoin, or an

equivalent means of digital payment of a particular currency.

Electronic funds transfer (EFT) and direct deposits are examples of electronic

money.

It is also a collective term for financial cryptography and technologies that permit.

While electronic money has been an interesting problem in cryptography-see for

example the work of David Chaum and Markus Jakobsson-, to date, the use of

digital cash has made relatively low level.

One of the few successes have been system Octopus card in Hong Kong, which

began as a payment system for mass transit and has been widely used as an

electronic money.

Singapore has also implemented an electronic money system for public transport

(train, bus, etc) which is very similar to that of Hong Kong and the Octopus card

based on the same type of card (FeliCa).


11. Conclusion

Creating money

In the current economic system, money is created by two procedures:

Legal money is created by the Central Bank through the minting of coins

and printing of banknotes, is the cash. The legal amount of money is

measured by the M1. Bank money is created by private banks by book-entry

credit borrowers as customer deposits, with partial support indicated by the

minimum reserves. Normally currently bank money is created as electronic

money. The amount of bank money is measured by the different monetary

aggregates M1. The amount of money created is measured by monetary

aggregates. The current way of creating and controlling the amount of

money is inspired by monetarism.


12. References

C. J. Howgego Ancient History from Coins Psychology Press, 1995 -ISBN

041508993X Retrieved 2012-06-09

a b Ludwig Von Mises. The Theory of Money and Credit. Ludwig von Mises

Institute, 2009. ISBN 1933550554. Consultado el 06-10-2012.

S Meikle Aristotle on Money Phronesis Vol. 39, No. 1 (1994), pp. 2644

Retrieved 2012-06-05

Aristotle Politics Translated by Benjamin Jowett MIT University

N K Lewis (2001). Gold: The Once and Future Money. John Wiley & Sons, 4

May 2007. ISBN 0470047666. Consultado el 04-06-2012.

a b D Kinley (2001). Money: A Study of the Theory of the Medium of

Exchange. Simon Publications LLC, 1 September 2003. ISBN 193251211X.

Consultado el 04-06-2012.

Graeber, David (12 de julio de 2011). Debt: The First 5,000 Years. ISBN 1-

933633-86-7.

Graeber, David (26 de agosto de 2011). What is Debt? An Interview with

Economic Anthropologist David Graeber.

Breve Historia del dinero:

https://www.youtube.com/watch?v=5K4Wt5S9MrE.

The History of Money by Jose Ramon Ramirez Sanchez

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