What is Money?

Like really what is this money we’ve been yapping fit weeks about and why is it so important? I mean, why can’t we take money out of the equation and base wealth on something else right? Well, today we’ll talk briefly about money and why it’s so important. Let’s take a trip down history lane.

Mr A has some flour but has no oil while Mr B has oil and no flour. They both need something from each other and proceed to make an exchange and by doing this, a transaction has been carried out. Basic needs of humans were met through this simple barter system which gave room to attend to greater socio-economic needs and then came the emergence of demand and labour. The demand for various needs had to be met by the labour of people and these people working deserve to be paid right? Right.

As time went on people discovered precious metals and minerals which was worth a lot more than a sack of flour or a crate of eggs and best of all, you could pay workers with these metals with which they could use to purchase whatever they need. Another good thing was that these metals were durable and could be inherited by generations after the death of the owner. Those with direct access to these precious minerals have a greater purchasing power than those who don’t which led to the creation of social demarcation amongst people.

After a while, these precious minerals diminished in quantity and there came the need to establish a new and better medium of exchange. One generally accepted by all, durable and easily accessible. Then came the emergence of paper money created by the Chinese which evolved over the years. It was adopted by various countries who made their own currencies and used them to trade. That’s basically what you need to know in this crash course about money.

Do have a lovely day.

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