When – and why – did people first start using money?

Cash currency goes back a long time – 40,000 years.

Sometimes you run across a grimy, tattered dollar bill that seems like it’s been around since the beginning of time. Assuredly it hasn’t, but the history of human beings using cash currency does go back a long time – 40,000 years.


Scientists have tracked exchange and trade through the archaeological record, starting in Upper Paleolithic when groups of hunters traded for the best flint weapons and other tools. First, people bartered, making direct deals between two parties of desirable objects.

Money came a bit later. Its form has evolved over the millennia – from natural objects to coins to paper to digital versions. But whatever the format, human beings have long used currency as a means of exchange, a method of payment, a standard of value, a store of wealth and a unit of account.

As an anthropologist who’s made discoveries of ancient currency in the field, I’m interested in how money evolved in human civilization – and what these archaeological finds can tell us about trade and interaction between far-flung groups.

Why do people need currency?

There are many theories about the origin of money, in part because money has many functions: It facilitates exchange as a measure of value; it brings diverse societies together by enabling gift-giving and reciprocity; it perpetuates social hierarchies; and finally, it is a medium of state power. It’s hard to accurately date interactions involving currency of various kinds, but evidence suggests they emerged from gift exchanges and debt repayments.

Objects that occurred rarely in nature and whose circulation could be efficiently controlled emerged as units of value for interactions and exchange. These included shells such as mother-of-pearl that were widely circulated in the Americas and cowry shells that were used in Africa, Europe, Asia and Australia. Native copper, meteorites or native iron, obsidian, amber, beads, copper, gold, silver and lead ingots have variously served as currency. People even used live animals such as cows until relatively recent times as a form of currency.

The Mesopotamian shekel – the first known form of currency – emerged nearly 5,000 years ago. The earliest known mints date to 650 and 600 B.C. in Asia Minor, where the elites of Lydia and Ionia used stamped silver and gold coins to pay armies.

The discovery of hordes of coins of lead, copper, silver and gold all over the globe suggests that coinage – especially in Europe, Asia and North Africa – was recognized as a medium of commodity money at the beginning of the first millennium A.D. The wide circulation of Roman, Islamic, Indian and Chinese coins points to premodern commerce (1250 B.C. - A.D. 1450).

Coinage as commodity money owes its success largely to its portability, durability, transportability and inherent value. Additionally, political leaders could control the production of coins – from mining, smelting, minting - as well as their circulation and use. Other forms of wealth and money, such as cows, successfully served pastoral societies, but weren’t easy to transport – and of course were susceptible to ecological disasters.

Money soon became an instrument of political control. Taxes could be extracted to support the elite and armies could be raised. However, money could also act as a stabilizing force that fostered nonviolent exchanges of goods, information and services within and between groups.

Throughout history money has acted as a record, a memory of transactions and interactions. For instance, medieval Europeans widely used tally sticks as evidence for remembering debt.

Follow the money to see the trade routes

In the past, as today, no society was completely self-sustaining, and money allowed people to interact with other groups. People used different forms of currency to mobilize resources, reduce risks and create alliances and friendships in response to specific social and political conditions. The abundance and nearly universal evidence of movement of exotic goods over diverse regions inhabited by people who were independent of each other – from hunter-gatherers to pastoralists, to farmers and city dwellers – points to the significance of currency as a uniting principle. It’s like a common language everyone could speak.

For example, Americans who lived in the Early Formative Period dating from 1450 to 500 B.C. used obsidian, mother-of-pearl shell, iron ore and two kinds of pottery as currency to trade across the Americas in one of the earliest examples of a successful global trade. The Maritime Silk Road trade, which occurred between A.D. 700 to 1450, connected Europeans, Asians and Africans in a global trade that was both transformational and foundational.

In my own excavation work in 2012, I recovered a 600-year-old Chinese Yongle Tongbao coin at the ancient Kenyan trade port Manda, in the Indian Ocean. Chinese coins were small disks of copper and silver with a hole in the center so they could be worn on a belt. This coin was issued by Emperor Yongle of the Ming Dynasty. He was interested in political and trade missions to the lands beyond the South China Sea and sent Admiral Zheng He to explore those shores, nearly 80 years before Vasco da Gama reached India from Portugal.

Archaeological discoveries like this one illustrate Africa’s integration into trade interactions in the Indian Ocean. They also show evidence that market economies based on cash money were developing at this time. On the East African coast, there were local merchants and kings of the local Swahili who followed Islam and cultivated these external contacts with other Indian Ocean traders. They wanted to facilitate business dealings, while merchants from the Near East and South Asia had their own Rolodexes of business contacts. Coinage was not just a local affair but also a way of leaving a calling card, a signature and a symbolic token of connections.

As the history of money has shown, currency’s impact is double-edged: It enabled the movement of goods and services, migration and settlement amongst strangers. It brought wealth to some, while hastening the development of socioeconomic and other distinctions. The same patterns unfold today with the modern relationship between China and Africa, now more intertwined and unequal than when Admiral Zheng He first brought coins from China in a diplomatic gesture, as a symbolic extension of friendship across the distance separating the two.

In our time, possession of cash currency differentiates the rich from the poor, the developed from the developing, the global north from the emerging global south. Money is both personal and impersonal and global inequality today is linked to the formalization of money as a measure of societal well-being and sustainability. Even as currency continues to evolve in our digital age, its uses today would still be familiar to our ancient predecessors.

Chapurukha Kusimba, Professor of Anthropology, American University

This article was originally published on The Conversation. Read the original article.

LinkedIn meets Tinder in this mindful networking app

Swipe right to make the connections that could change your career.

Getty Images
Sponsored
Swipe right. Match. Meet over coffee or set up a call.

No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.

Keep reading Show less

10 books to check out from Jordan Peterson's 'Great Books' list

The Canadian professor has an extensive collection posted on his site.

Jordan Peterson with Carl Jung and the cover art of Jaak Panksepp's 'Affective Neuroscience' (Image: Chris Williamson/Getty Images/Big Think)
Personal Growth
  • Peterson's Great Books list features classics by Orwell, Jung, Huxley, and Dostoevsky.
  • Categories include literature, neuroscience, religion, and systems analysis.
  • Having recently left Patreon for "freedom of speech" reasons, Peterson is taking direct donations through Paypal (and Bitcoin).
Keep reading Show less

Scientists claim the Bible is written in code that predicts future events

The controversy around the Torah codes gets a new life.

Michael Drosnin
Surprising Science
  • Mathematicians claim to see a predictive pattern in the ancient Torah texts.
  • The code is revealed by a method found with special computer software.
  • Some events described by reading the code took place after the code was written.
Keep reading Show less

Kosovo land swap could end conflict - or restart war

Best case: redrawing borders leads to peace, prosperity and EU membership. But there's also a worst case

Image: SRF
Strange Maps
  • The Yugoslav Wars started in 1991, but never really ended
  • Kosovo and Serbia are still enemies, and they're getting worse
  • A proposed land swap could create peace - or reignite the conflict

The death of Old Yugoslavia

Image: public domain

United Yugoslavia on a CIA map from 1990.

Wars are harder to finish than to start. Take for instance the Yugoslav Wars, which raged through most of the 1990s.

The first shot was fired at 2.30 pm on June 27th, 1991, when an officer in the Yugoslav People's Army took aim at Slovenian separatists. When the YPA retreated on July 7th, Slovenia was the first of Yugoslavia's republics to have won its independence.

After the wars

Image: Ijanderson977, CC BY-SA 3.0 / Wikimedia Commons

Map of former Yugoslavia in 2008, when Kosovo declared its independence. The geopolitical situation remains the same today.

The Ten-Day War cost less than 100 casualties. The other wars – in Croatia, Bosnia and Kosovo (1) – lasted much longer and were a lot bloodier. By early 1999, when NATO had forced Serbia to concede defeat in Kosovo, close to 140,000 people had been killed and four million civilians displaced.

So when was the last shot fired? Perhaps it never was: it's debatable whether the Yugoslav Wars are actually over. That's because Kosovo is a special case. Although inhabited by an overwhelming ethnic-Albanian majority, Kosovo is of extreme historical and symbolic significance for Serbians. More importantly, from a legalistic point of view: Kosovo was never a separate republic within Yugoslavia but rather a (nominally) autonomous province within Serbia.

Kosovo divides the world

Image: public domain

In red: states that have recognised the independence of Kosovo (most EU member states – with the notable exceptions of Spain, Greece, Romania and Slovakia; and the U.S., Japan, Turkey and Egypt, among many others). In blue: states that continue to recognise Serbia's sovereignty over Kosovo (most notably Russia and China, but also other major countries such as India, Brazil, Mexico, South Africa and Iran).

The government of Serbia has made its peace and established diplomatic relations with all other former Yugoslav countries, but not with Kosovo. In Serbian eyes, Kosovo's declaration of independence in 2008 was a unilateral and therefore legally invalid change of state borders. Belgrade officially still considers Kosovo a 'renegade province', and it has a lot of international support for that position (2). Not just from its historical protector Russia, but also from other states that face separatist movements (e.g. Spain and India).

Despite their current conflict, Kosovo and Serbia have the same long-term objective: membership of the European Union. Ironically, that wish could lead to Yugoslav reunification some years down the road – within the EU. Slovenia and Croatia have already joined, and all other ex-Yugoslav states would like to follow their example. Macedonia, Montenegro and Serbia have already submitted an official application. The EU considers Bosnia and Kosovo 'potential candidates'.

Kosovo is the main stumbling block on Serbia's road to EU membership. Even after the end of hostilities, skirmishes continued between the ethnically Albanian majority and the ethnically Serbian minority within Kosovo, and vice versa in Serbian territories directly adjacent. Tensions are dormant at best. A renewed outbreak of armed conflict is not unthinkable.

Land for peace?

Image: BBC

Mitrovica isn't the only area majority-Serb area in Kosovo, but the others are enclaved and fear being abandoned in a land swap.

In fact, relations between Kosovo and Serbia have deteriorated spectacularly in the past few months. At the end of November, Kosovo was refused membership of Interpol, mainly on the insistence of Serbia. In retaliation, Kosovo imposed a 100% tariff on all imports from Serbia. After which Serbia's prime minister Ana Brnabic refused to exclude her country's "option" to intervene militarily in Kosovo. Upon which Kosovo's government decided to start setting up its own army – despite its prohibition to do so as one of the conditions of its continued NATO-protected independence.

The protracted death of Yugoslavia will be over only when this simmering conflict is finally resolved. The best way to do that, politicians on both sides have suggested, is for the borders reflect the ethnic makeup of the frontier between Kosovo and Serbia.

The biggest and most obvious pieces of the puzzle are the Serbian-majority district of Mitrovica in northern Kosovo, and the Albanian-majority Presevo Valley, in southwestern Serbia. That land swap was suggested previous summer by no less than Hashim Thaci and Aleksandar Vucic, presidents of Kosovo and Serbia respectively. Best-case scenario: that would eliminate the main obstacle to mutual recognition, joint EU membership and future prosperity.

If others can do it...

Image: Ruland Kolen

Belgium and the Netherlands recently adjusted out their common border to conform to the straightened Meuse River.

Sceptics - and more than a few locals - warn that there also is a worst-case scenario: the swap could rekindle animosities and restart the war. A deal along those lines would almost certainly exclude six Serbian-majority municipalities enclaved deep within Kosovo. While Serbian Mitrovica, which borders Serbia proper, is home to some 40,000 inhabitants, those enclaves represent a further 80,000 ethnic Serbs – who fear being totally abandoned in a land swap, and eventually forced out of their homes.

Western powers, which sponsored Kosovo's independence, are divided over the plan. U.S. officials back the idea, as do some within the EU. But the Germans are against – they are concerned about the plan's potential to fire up regional tensions rather than eliminate them.

Borders are the Holy Grail of modern nationhood. Countries consider their borders inviolate and unchanging. Nevertheless, land swaps are not unheard of. Quite recently, Belgium and the Netherlands exchanged territories so their joint border would again match up with the straightened course of the River Meuse (3). But those bits of land were tiny and uninhabited. And as the past has amply shown, borders pack a lot more baggage in the Balkans.

Keep reading Show less