Bartering Versus Currency, Homeschooling Blog, Grade 7

Bartering Versus Currency



Jacqueline Howard exploress the history of money in the Big History Project. About 12 000 years ago, we did not have money yet. We used bartering to exchange goods and maybe even services. In bartering, you exchange something you have in surplus for something you need. Once we moved from hunters and gathers into farming, bartering began to focus on single items, like livestock or grains, but these items were at times difficult to transport.

Around 3 000 years ago, civilizations began to give symbolic value to things like shells and metal (copper, bronze and gold) and using them as currency to trade for the things they needed. They created coins. Sometimes blocks of salt were used as money.
The first known paper money was used in China around 815 CE. About 600 years ago, the use of credit, the borrowing of money that would be paid back later. Credit facilitated exploration and colonization.

In 1816, the English adopted the Gold Standard System. Every bill or coin created by the government represented a certain amount of gold held by the government. Eventually the governments of the world will stop this and begin to print money when they feel it is necessary to stimulate the economy. This is called the Fiat System. Our money has value because the government says it does.

Today we have all sorts of currency that we trade in, from physical money, to stocks and bonds, credit, and even crypto. Most of our currency now is virtual, its not real, you can’t eat it, you can’t build with it, or even hold it in your hand. It’s an agreement on a computer hard drive somewhere.

A side note: I saw a movie once where a woman who was stranded in the Canadian wilderness with millions of dollars found the only value in money was burning it to keep warm, showing that money is symbolic and has no real value on its own.



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