What is Money?

            Money is something we trade for what we want to buy.  Even in 10,000 B.C., people were looking for a way to buy what they needed and sell what they had.  This became bartering.  Bartering is the trading of one thing for an equal value of something else.  For example:  if you had an I-Pod that you didn’t want anymore and your friend had a really good baseball card collection that he didn’t want, you could trade.  The first things that you would need to know are:

     From there, you need to negotiate.  We all know that an I-Pod is expensive but your friend’s baseball card collection might have rookie cards in it which are more valuable than regular ones.  You might end up making a trade that includes your I-Pod for part of the baseball card collection.  At the end of the trade, both you and your friend need to be satisfied that the trade is fair.

     Bartering is not always the answer for getting what people need.  From our example above, if you and your friend hadn’t had something that each of you wanted, then the trade wouldn’t have worked.  Both people have to have something that the other wants.  In Colonial times, a person might have had corn he grew and wanted to get beef for it.  Unless he found someone who had beef and wanted corn, he was out of luck. 

     When people started to use coins and paper money that had certain values, the value was based on the amount of gold or silver in it (coins) or specified on it (paper money).  In the U.S., there were dollars that said “Gold certificate” and “Silver certificate” on them.  This meant that you could take them to the bank and trade them in for gold or silver.  A $10.00 gold certificate would be worth $10.00 in gold.

     The most important thing to recognize when you talk about money is that money can be anything as long as a value has been given to it.  It doesn’t have to be paper or coins.  Wampum, which were chains of shells, was money to Native Americans.  Paperclips could be money as long as they were given a certain value.  The government from any country could decide that paperclips were worth one cent.  The point is, anything can be money as long as the government says it is.

 Citations:

Drobot, Eve.  Money Money Money.  Toronto:  Maple Tree Press, 2004.