How was money invented and when did the dollar become the most important currency in the world?

The history of money began thousands of years ago and various specialists, such as archaeologists, philosophers, economists and historians, have created their own theories about its origin and its implications for people’s daily lives.

Among the main functions, they have highlighted its use as a means of payment, wealth deposit and unit of account; that is, a system that allows prices to be set and debts to be recorded.

It was approximately 70 years ago that in private political negotiations an important piece of the economy not only of the United States was highlighted. We refer to the dollar that came to be fully positioned. How did the most powerful currency in the world evolve?

First of all, we must refer to transactions. Here, the experts said that they could be found in grams of silver or barley, which was traded 5,000 years ago in the Sumerians of Mesopotamia, currently Iraq. These served as a unit of measurement and, through their weight, they could measure “the value of an enslaved person, work, interest on a debt and even promises of payment,” according to BBC World.

Regarding salaries, employees received beer or furniture, according to the statements of jon taylor curator of the cuneiform and cylinder seal collections in the Middle East Department of the British Museum.

Taylor added that wool and dates could have an equivalent value in grams of silver. “Traders doing long-distance operations offered each other a kind of credit, whereby they could withdraw resources in one place and return them in another, or transfer the right to resources to another person,” he adds.

According to William B Hafford field director of the Ur Project at the Museum of Archeology and Anthropology at the University of Pennsylvania, money is “an attempt to quantify value.” Meanwhile, currency “is a physical form of money, a standardized item.”

Following those definitions, barley and silver would be the coins and probably the “oldest physical money”. Likewise, the origin of money is in credit-debt transactions, which “were based on the fact that a person could obtain something from another, promising something in exchange in the future. This is how the concept of debt arises”, argued Hafford to BBC World.

The specialist Hafford affirms that silver was the most common way to quantify the value of things in Mesopotamia. “We often find silver treasures buried under the floors for protection. These contain bits of silver cut from vases, from old beads, cast into ingots or made into spiral rings,” he explained.

To this is added the statement of the historian Niall Ferguson who mentioned that, in the clay tablets of Mesopotamia, the debts were recorded and that they were a promise of payment to the bearer.

eckart frahm Professor of Near Eastern Languages ​​and Civilizations at Yale University, added that Mesopotamian traders sometimes used more “virtual” money than traditional metals. “The payment was made to the person holding the check, which came in the form of a tablet,” he explained.

Another specialist to testify was the archaeologist from the University of Cambridge, in the United Kingdom, and former director of the School of British Archeology in Iraq, Nicholas Postgate who points out that the clay tablets included records of transactions, but were not used as coins. “The closest thing we have to money is silver along with barley.”

Jacob Dahl Professor of Assyriology at Oxford University’s School of Asian and Middle Eastern Studies, agreed with Postgate. In addition, he said that silver functioned as a medium of exchange, “but since it was never backed by a central bank or a state, you still can’t call it money.”

The origin of the first coin would have been around the year 640 BC in Anatolia, currently Turkey, with the seal of King Aliates of Lydia, and it was older than the coins minted in China, India, Egypt, among others.

This process was successful and easy to use, it also had its own value, since it was used by politicians to collect taxes or finance armies.

Following the origin of salarium, which means salary, experts add that soldiers and politicians also they used the salt as a means of payment and was very valuable for the preservation of food for example.

And, regarding the first banknote, it arose in China and the coins were copper or bronze “with a square perforation in the center, which allowed them to be hung on a thread forming a chain.”, according to BBC Mundo. However, after the shortage of the first element and the desire not to filter them abroad, they opted for iron. The bad thing is that they were overweight.

After that, they decided to use paper to avoid complications in transfers. It was the year 1000, during the Song dynasty, when the empire officially issued the first paper bill or currency in the world, which they called “jiaozi made from the bark of the mulberry tree. This was of total interest to the merchants and rulers.

In the midst of World War II, in 1944, the economies were in terrible shape and the rulers did not know what currency to use for international trade. Thus, the representatives of 44 countries met in a conference of Bretton Woods for 22 days at the Mount Washington Hotel to negotiate and learn about the future of finance and commerce after the war.

According to recounts ed conway In his book “The Summit”, that day the British John Maynard Keynes and the american Harry Dexter White they engaged in an intellectual duel. The last one was the winner. And so, finally, the US dollar was made official as the currency for international transactions.

Before concluding with the conference, they created the International Monetary Fund and the world Bank Institutions that would make it possible to make loans to countries that need them after the end of the war. Since then, the dollar would be the most important currency in the international economy.

Source-larepublica.pe