Origins of the coin: its 3 stages of evolution in history
Currency is an object that we have used for centuries as a common exchange material. It is precisely characterized by having an exchange value that allows us to generate transactions and acquire various goods, and their history has to do with the development of trade in societies Westerners.
In this article we will see what the origins of the currency are and what has been its development.
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Origins of currency: from barter to metallic money
The currency is a metallic piece with an attributed value that functions as a common medium of exchange. As such, it has emerged in tandem with the development of trade. Continuing with this definition we can see that, to be valuable as money, the currency meets several requirements:
- It is a means of exchange.
- It is a store of purchasing value (things can be acquired because their value remains over time).
- It is a unit of account (transactions can be accounted for).
- It allows deferred payment patterns (a payment can be made today but made in the future).
- It is accessible, portable, divisible and hard to fake.
All of the above has developed gradually in different societies. In fact, throughout history the objects used as common means of exchange have been different. For instance, In the barter system, cattle or salt fulfilled the function that currency now fulfills.
The difference is that this system was based on the direct exchange of one good for another. And when the currency appears the parties interested in the barter are divided; In other words, it made it possible to separate production from sale, an issue that will be necessary later in the capitalist system (characterized precisely by the division of labor and specialization).
In short, the history of the currency predates current economic systems. Said story it also has to do with conceptions about gold and silver, which are the raw material of the currency and are metals associated with wealth from the most classical philosophy. This progresses to the establishment of payment systems that are different according to society and times.
For this reason, the coin is not only the metallic object that we have described. It is also a social and political institution, and it is even an important element for the social bond.
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Main stages
Monetary systems originate with the main purpose of maintaining the exchange value of the metallic object regardless of whether the political powers are modified. In other words, it is created as a way to avoid arbitrariness in decisions about said value and its use.
To summarize the origins of the coin, Viales Hurtado (2009) tells us that its history can be divided into three main stages: the heavy coin, the coin-account and the minted coin.
1. The heavy coin
The heavy skin has its origins in Egypt, approximately 2000 years before our era. It was in the form of a chunk or bar of raw metal (an ingot) and it was used to acquire some good.
2. The coin-account
Created approximately 800 years before our era as a product of the division of bullion or heavy currency. That is, it is the same currency as before, only that has a smaller size, which makes it easier to exchange. Its precursors were the Greek, Roman, Chinese, Indian and Middle Eastern civilizations.
3. The minted coin
Unlike the previous ones, this coin has an inscription, for the same reason it is known as minted coin. This inscription has the function of indicate the exchange value of the piece, according to its weight. At first, metals such as gold and silver were used in fixed amounts, and the seal functioned as collateral. Later these metals were mixed with others and their proportion varied according to the value that was wanted to indicate.
In addition, its mints have not been the same for all societies and all times, but it has depended on the dominant economic doctrines and its commercial development. Thus, this currency is the one that finally starts the metallic monetary system.
Paper money
After the minted currency, the next important step in the establishment of monetary systems was the creation of paper money; where, unlike the metallic coin that in itself had a value for the material with which it was made; paper money has a value dissociated from its own raw material.
It has served as a facilitator of commercial transactions and has made it possible to avoid the transfer of large currencies, thereby making commerce more accessible. Paper money has its origins in China in the 9th century, although its circulation in Europe and the rest of the world began until the middle of the 12th century.
Bibliographic references:
- Torres Miranda, J. (2015). Evolution of money. Retrieved October 15, 2018. Available in http://www.academia.edu/15762713/EVOLUCION_DEL_DINERO
- Viales Hurtado, R. (2009). The historical evolution of currency and monetary systems. Conceptual bases for studying the monetary history of Costa Rica from the 16th century to the 1930s. Dialogues Electronic Magazine of History, 9 (2): 267-291.
