The invention of money was a major improvement in peoples’ lives. In the past, people usually had to travel all day to find the person who is willing to exchange their goods. In addition, the goods people want to exchange did not have the standard value of measurement. This led to unequal exchanges. Furthermore, it is not convenient to carry heavy goods from one place to another for an exchange. To solve these issues, money will be the only solution. Later, people tend to develop money from cowry shells to credit cards for the convenience and to improve their society.
In the beginning of the human kind, there was no money. The only way to get what you want is to trade what you have for it. This system is called bartering. Sometimes, you will find a person who is willing to exchange your goods. However, most of the time, it is really difficult to find the person who is willing to trade with you. Since, you desperately need to exchange, you will need to travel the whole day until you meet the right person. In this type of situation, it will take a lot of time to find the person who wants to trade with your goods. Economists defined this kind of issue as transaction costs. It is the time and effort people spend before they can exchange their goods. In barter economy, the transaction costs are incredibly high. Another major drawback of barter system is that people cannot measure the value of goods. This usually leads to conflicts since people have to make unequal exchanges. In order to reduce transaction costs and conflicts, people developed commodity money.
Commodity is a fundamental item used by almost everyone. In the past, tea, tobacco, salt, sugar are considered as commodities. People use these commodities to exchange goods. T...
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The first well-known name of the Medici family in Italian Renaissance Age is Cosimo di Giovanni de' Medici (1421-1463), also known as Cosimo the Elder (il Vecchio). His father, Giovanni di Bicci (1360-1429) started the family business as a great banker. 5 Having watched and learned the business world since very little, Cosimo successfully inherited the family business. Adding on his own talent, Cosimo expanded the Medici banking empire throughout Europe. He launched branches in London, Bruges, Lyon and some main cities within Italy such as Milan, Venice and Rome. His success in business financially supported him to invest in enormous amount of art pieces including architectures, paintings, sculptures, ancient manuscripts and antiques.
On February 23, 1784, a small advertisement appeared in The New York Packet, one of the many New York newspapers of that era. This advertisement announced that prominent New York citizens had established a bank. The bank, established by the prominent, would not officially open for business until June 9, 1784. That bank would come to be known as the bank of New York. Alexander Hamilton, a well-known New York attorney, was asked to write the constitution of the new bank. He complied and therefore Alexander Hamilton was credited with the founding of the Bank of New York. The Bank of New York is the oldest bank in New York and along with that is one of the oldest banks in the world since banking the way we know it today began in the 18th century.
Money— sweeter than honey but oh so destructive. It facilitates a man’s life, while a lack of it imprisons him in the streets of penury. It raises his social status, while an absence of it leaves him unnoticed. It gives him an aura of superiority and importance among others, while a deficiency of it makes him worthless in society’s eyes. Considering these two roads, most do not take more than a second to decide to chase riches.
While the idea of money as being so important in daily life in the modern era is not a concept that is given much thought, it is very important to realize that this is not exactly a new concept. It was as important during the medieval period in the time of Saint Francis of Assisi. Wealth, in many cases of modern times and medieval is seen as both the main factor for running the world as well as its downfall. It is something that no matter the period we as humans understand and use to classify the world in both abstract and in more literal ways.
Georg Friedrich Knapp, a German economist, states, “Money…is not chosen for any properties of the metals, but for the deliberate purpose of influencing exchanges…” (Knapp, 1924). His statement illustrates his belief that money has no value in of itself, and that its primary function is to serve as a medium of exchange. Many economists shared Knapp’s perspective on money and these collective opinions formed one of the dominating schools of thought regarding money; chartalism, which is the belief that money has no intrinsic value, and that its value is whatever the government declares it to be. Although many economists supported this perspective, there were others who contested it and became supporters of this theory’s counterpart; metallism,
use-value. For Ricardo (1953, 11-13) scarcity of a commodity can, in the case of something rare such as gold, elevate it above the labor needed to acquire it, but most commodities value is determined by the toil and trouble needed to get them. Ricardo (1953, 15-16) seems to uniformly reject the Aristotelian notion of labor having constant worth, allowing for the exchange of a set amount of goods for another as in the example of houses and shoes present in Nichomachean Ethics [350 B.C.]. Ricardo leaves room for the value of labor to fluctuate on the basis of the scarcity of the commodity, but, and this appears important, he allows for labor to dilute its own value via the use of the productive machinery necessitated in the division of labor introduced by Smith. This insight leaves room for labor to be exploited and immense profit to be made and will lead to the works of Karl Marx and his revolutionary critique of capitalism Capital: A Critique of Political Economy
Money makes exchange much easier, because people can trade their goods for money and use the money to buy other things. In the Bible money was silver or gold, a precious metal, and America was on a gold standard throughout most of her history. In 1933 we shifted to a silver standard and in 1968 our silver certificates were replaced with Federal Reserve Notes (Remy, 2008). Today’s paper money is not backed by anything except the government’s promise that it is good. Money with no precious metal backing allows the central government to spend more than it collects in taxes, because the Federal Reserve Board can print new money, thus increasing the money supply, anytime there is a need. This is what causes inflation and is one way that the Federal Reserve Board has overstepped Biblical principles in economic policy. Greg Anthony writes that “one of the Biblical signs of a nation backsliding is the condition of its currency and the degree of honesty in its weights and measures” (Anthony, 1988, p. 28). When the money supply is increased, either through printing more money or credit-expansion, the purchasing power of the dollar falls, and businesses must increase the prices they charge to keep up with their own higher costs. Inflation encourages debt, deceives people about pay increases and future wealth accumulations, is a hidden theft tax, and decreases capital available for
As humans developed and became sophisticated we needed ways other than just barter to exchange goods. Currency began in Anatolia in 12,000 BC with the distribution of obsidian to the people. In 9,000 BC trade began in the Mediterranean with the use of grain and cattle as a way to trade. (Wikipedia) In these times money was based on their marketability and utility, this means that although they did not use what we think as currency at this time such as coins and bills, if they were an agricultural society they would trade grains for cereals and things that involved grain because of their process ability. The use of gold was traced back to the fourth millennium BC in Egypt and the use of silver at the same time in Mesopotamia. Ancient Greece used similar coinage that began approximately in 700 BC. There are three periods in the time of Ancient Greece. The Archaic, Classical and Hellenistic periods, all of which have a different variation of currency.
...uggests that the spread of the money form gives individuals a freedom of sorts by permitting them to exercise the kind of individualized control over "impression management" that was not possible in traditional societies. ... ascribed identities have been discarded. Even strangers become familiar and knowable identities insofar as they are willing to use a common but impersonal means of exchange. (Ashley and Orenstein, p. 326)
Money has evolved with the times and is a reflection of the progress of man. Early money was itself a physical commodity, grain, gold or silver. During the vital stage, more symbolic forms of money such as certificates of deposit, bank notes, checks, letters of credit, bonds and other forms of negotiable securities came into prominence. Social development transformed money in to a trust, “In God We Trust' it says on the back of the ten-dollar bill.” (The Ascent of Money, 27) Today money is faith in the person paying us and belief in the person issuing the money he uses or the institution that honors his money. This trust has no end it can be extended to a greater number of individuals.
According to Sloman (2003), many people think that economics is about money. Well, to some extent this is true. Economics has a lot to do with money: with how much money people are paid; how much they spend; what is costs to buy various items; how much money firms earn; how much money there is in total in the economy. But despite the large number of areas in which our lives are concerned with money, economics is more than just the study of money. It is concerned with the production of goods and services and the ...
The Traditional Theory of Banking In this paper author review the traditional theory of banking and attempt to examine the theoretical reasons for why banks exist. As a financial intermediation, the natures of the banks are to provide financial services and conduct the intermediary functions in the whole financial system by accepting deposits and making loans. The question raised here are how they conduct these roles and why the borrowers and lenders do not come together without the banks for the saving of intermediation costs, why both of the two parties are ready to pay for their services and what’s the value added by the banks? The paper proceeds as follows. Section 2 offers a traditional view of banks and describes the nature of them.
Money is essential for our everyday lives and people have to face choosing whether to save up or spend their money. Of course earning our money can difficult considering that it is a necessary asset that affects every aspect of our life. Every day we see people working hard to earn as much money as the can. However how they use using the all the money earned is a frequently debated topic have seen many people who earn money and can no restrict themselves from spending .They usually act like wild animals fighting for food and being separating from the delusions of business. People are usually confused and frustrated by the amount money the use in a week without knowing that their daily impulse buying objects have piled up. Although it can be very hard to control there are many easy steps to stay away y from spending and instead saying up. Setting a goal, recording the amount you spend and even lowering your expenses can be small steps that will lead to great success in saving for the future
As the quotation above says, is money society¡¦s new god? If so, can other values such as freedom, love, achievement or even motivation also be bought? This is precisely the topic of the paper. All of these things can be pointed back to money and see how people treat it today. Besides discussing the real functions of money, this paper will also attempt to answer not just the questions above but also investigate whether money is the only thing that really motivates people today.
Further consideration: Even though money brings about so much misfortune, someone may declare that if we eliminated the existence of money, our life would be chaotic. However, the humanity has never lived in an environment without money. Therefore, it is too hard to determine people 's living conditions by considering whether they have the concept of money. However, the society seems to run well currently; it is seems to be unnecessary to consider the justification for the existence of