Can't We Just Print More Money? by Rupal Patel & Jack Meaning

Author:Rupal Patel & Jack Meaning [Patel, Rupal & Meaning, Jack]
Language: eng
Format: epub
ISBN: 9781529159066
Publisher: Cornerstone

Chapter Seven

What actually is money?

On what makes money money, why you can’t print your own currency, and how you too could get the sort code 10-00-00.

What do you think of when you think of money? A debit card, a banknote, your mobile phone?

What about teeth? Chocolate? Dried fish? At one time or another all of these things have been used as currency. What is the common thread that makes each of these seemingly random objects money?

The history of money is complex. It has developed in different ways at different times and in different places throughout human history, so trying to tease out the underlying logic is no easy task. Keynes described the period of his life where he studied the origins of money as his ‘Babylonian madness’, because he became so obsessed with the coinage of ancient Middle Eastern civilisations.

According to some definitions, money has been around for almost as long as civilisation. Around 5,000 years ago, in ancient Mesopotamia, systems of debt developed around grain storage. Workers would keep their grain in temples or warehouses known as grain banks. A ledger – basically a spreadsheet carved into a stone tablet – was kept that made a note of how much grain you owned. You could then lend that grain or exchange it with someone else, without having to go through the hassle of taking the grain to where they were and giving it to them. The ledger became a way of keeping score of the debts that everyone owed each other. If this feels familiar, it should. The same basic premise – keeping a record of balances and transfers – underpins our modern system of bank accounts. In this origin story, money developed as a form of memory: a way of keeping score of who owed what to whom.

Precious metals have also been used as a way of paying for things for millennia. The ancient Egyptians used gold bars of certain weights in their exchanges. In Bronze Age Britain, gold was often used in ornate jewellery, which some people believe was used as a form of payment. But there is a cost to swapping metals in their unstructured form – how do you know how much it is worth? To be sure, you need to be able to weigh your lump of gold or silver and be certain that it is what it says it is. Not very handy if you’re just popping down to the shops. The solution to this problem? Coins. The innovation of casting your precious metal into a certain size and shape and then stamping it with something official so people knew it could be trusted dates back to the ancient Lydians, who came up with the idea around 700 BCE. In the British Museum you can find a coin, created by King Croesus of Lydia, in the sixth century BCE – and stamped with a lion and a bull. The first paper money developed more than a millennium later, in China.

Yet money need not take such a narrow range of forms.

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