Title: The Origins of Money

Author: Carl Menger

Hi all,

On my journey of exploring and discovering the history of money, I have come across this few-page read, and have caught one singular message that I will add to the archives.

The best definition I have come across of what money is is the following:

• a medium of exchange
• a unit of account
• store of value
• portable
• durable
• divisible
• fungible

This definition can be obtained from the Youtube series ‘Hidden Secrets of Money’ from the Mike Maloney series.

The question the book tries to answer is why gold and silver were chosen as the ultimate form of money. Throughout history money has taken many shapes and forms and natural resources, but in the end gold and silver have come to dominate the most widely-accepted form of money, and this has been the case for approximately 2.500 years.

So why gold and silver?

The book doesn’t give a direct answer, but it does give the argument that when barter was the main form of trade, every trader had a saleable good, and wanted to exchange this for another good that he currently desired. However, the seller of that good didn’t necessarily want your good, so no direct exchange might be possible. Therefore, you would need to find someone who would exchange their good for yours, until you finally got that one good the initial trader wanted to receive in exchange. This is a very inefficient process as it may be time consuming. Therefore, one means to quicken trade was to exchange your goods for other goods that are deemed more saleable (accepted/desirable) than most other goods and therefore you could use that ultimate good and exchange it for most others.

That ultimate good became gold and silver, and gradually become shaped into blocks and coins that were much more tradeable.

Summary:

Another book I read this year (What has Government done to our Money) is a better read than this because it goes into much greater depth on the history of money, and how gold and silver became the ultimate form of money from all the predecessors. Therefore, this book only attains a rating of 2/5.

Happy reading!