The commerce Before the invention of coins
Before the invention of coins, all commerce was done "in trade
," by bartering. Every time one man wanted to trade the extra goods he had for the goods he needed, he had to set a rate of exchange for each and every item he traded, with each and every one of his trading partners, each and every time they met. How much cauliflower for how much salt? How many sheep for a cow? What to pay to the chief in return for his protection?This cumbersome process was probably confusing and time-consuming, and no doubt dreadfully inefficient and very stressful. It probably led to heated arguments and maybe even fights. Our man wants to trade a cow for some sheep, but the guy with the sheep wants a horse. The fellow with the food already has water and three daughters, but he's willing to trade for husbands for his daughters, wine, or axes. But the guy who makes ax heads doesn't feel well, so there's a shortage of his fine product. The chief wants his taxes in arrowheads, axes, and knives, and probably not daughters. And so it went. Trade, although necessary, was barely productive and definitely not fun.
Out of this carousal of chaos in the barter economy came the first standards of trade. A standard in trade is an item that everyone who trades agrees has a value against which everything else can be judged and then traded. Objects used in this way have included seashells (in inland areas where seashells weren't found), animals, beads, grain, salt, obsidian (volcanic glass), stone arrowheads and knives, and bone fishhooks, to name just a few. Standards of trade slightly simplified the trading process into a productive and at least somewhat social event.
Next came man's discovery of metal in a natural state. The first of these metals was iron (from meteorites), followed by copper, gold, and silver. These metals were desirable to all men, not just because they were great for making tools, but because they were beautiful. Over time, the metals became the most acceptable items for exchange a storehouse of value. Now a man could sell his cow today for gold, and have something to trade for food next month. These metals were, for the most part, small and convenient to carry and store, making for the first universal medium of exchange.
Still, during each trade, the amount of each metal varied in weight and in pureness. To solve this problem, the natural solution was the weighing and marking on each the value of each piece. Eventually the local chief took to marking each unit with its value and assigning his mark, indicating its acceptability in trade a preset value. Trade expanded to include metal arrowheads and knife blades, even nails, the direct ancestors of coins as we know them today.
The commerce Before the invention of coins
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