Archaeologists have found evidence of collectible items going back 75,000 years, such as beads and pierced animal teeth. Their choice wasn’t random; they were durable, not particularly abundant and clearly had special value (often used as jewellery) and we know they took a lot of effort to make at a time when life was short and energy at a premium.
These collectibles were passed on as a family heirloom or as part of important ceremonies as their durability and scarcity enabled them to act as a store of value and a precursor to money.
When our ancestors stopped being nomadic, and developed specialist skills, they were able to exchange their surpluses. On a small scale, a village for example, they could keep a mental note of who owed what – a credit or trust based system – and what a fair exchange rate was – how much wheat in exchange for a cow.
This credit system became less useful as the number of items being exchanged increased, and the two sides of the exchanging weren’t local, so credit on trust wasn’t practical; the solution was to find something suitable as a universal medium of exchange for goods and services; early collectibles were natural candidates and thus became the first money.
Early versions of money included coconuts, cattle,
rice or salt (the Latin salarium being the root
of the word salary), but it took Aristotle in 350
BC to articulate what makes something more suitable
and useful, as money. His ideas still apply today
forming the concept of sound money.
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