Fayaz Ahmad Magray
Money was created many times in many places. Its development required no technological breakthrough. Money was purely a mental revolution that involved the creation of a new inters subjective realty which existed solely in the people’s shared imagination. Cowry shells, rupee notes or the dollar have value only in our common imagination. Their worth is not inherent in the chemical structure of shells or paper or their colour or their shape. In other words money is not a material realty; it is a psychological construct which works by converting matter in to mind. But why does it succeed? Why should be anyone willing to exchange a fertile rice paddy for a handful of useless cowry shells or a piece of paper?
This is because people are willing to do such things when they trust the figments of their collective imagination . Trust is the raw material from which all types money are minted. What created this trust was a very complex and long term network of political social and economic relations.
Initially when the first version of money was created people did not have this sort of trust, so it was necessary to define as money things that had real intrinsic value. History’s first known money, the Sumerian money is a good example. It appears in summer around 3000 BC at the same time and place and under the same circumstances in which writing appeared. Just as writing developed to answer the needs of intensifying administrative activities, so this kind of money developed to answer the needs of intensifying economic activities. Barley money was simple barley with fixed amount of barely grains used as universal measure for evaluating and exchanging all other goods and services. The most common measurement was the silla, equivalent o to roughly one litre.
The first coins in history were struck around 640 BC by king Alyattes of Lydaa in western Anatolia. These coins had a standard weight of gold and silver and were imprinted with a identification mark that testified two things. First it indicated how much precious metal the coin contained. Second it identified the authority that issued the coin and which guaranteed its contents almost all coins in use today are descendents of the local coins. In the first century AD Roman coins were an accepted medium of exchange in the markets of India. Muslim and the European merchants gradually spread the Leyden system and the gospel of gold to the far corners of the earth.
Money also has a dark side; although money builds universal trust between strangers this trust is invested not in humans communities or sacred values but in money itself and in the impersonal systems that back it. We do not trust the stranger or the next door neighbor but we trust the coins they hold. If they run out of coins, we run out of trust. The world is in danger of becoming one big and rather heartless place. Hence the economic history of humankind is a delicate dance . People rely on money to facilitate cooperation with strangers, but they are afraid it will corrupt human values and intimate relations.
Let me conclude with a quote of Khalil Jibran:
Money is like love; it kills slowly and painfully the one who withholds it, and enlivens the other who turns it on his fellow man.”
—The author can be reached at: Magrayfayz0000@gmail.com