Evolution of Money
Mohammed Julfekar Haider
Types of Money; Evolution of Money; What is evolution of money
Due to inconveniences of barter system, the need for introducing something as a medium of exchange arise. The development of money has passed through various stages in accordance with time, place and circumstances with the progress of civilization of mankind.
The different types of money are explained in brief as follows:-
In the hunting stage, animals were used as money. Various cattle like cows, goats etc. were used as money. This money has certain drawbacks like indivisibility, lack of storability, lack of portability and lack of standardization.
Various commodities like shells, skins, rice, tea etc were used as money in some places. People living near sea shore used shells, fish etc as a medium of exchange. This money has certain limitations like lack of uniformity, portability, indivisibility etc.
Metals like gold, silver, copper, bronze were used as money. It lacks uniformity, portability and difficult to count small pieces of coins for big transactions.
In order to overcome the difficulties of metallic money, coins were introduced in 700 B.C in Greece. Coins bearing the king's stamp were used. It also had certain disadvantages like lack of transferability, unsafe to carry, difficulty of counting and lack of availability of coins etc.
After Industrial Revolution, paper money was invented. Paper money emerged as token money. Paper notes were issued by the Government. It was economical and portable compared to metallic money. It has certain limitations like lack of durability, difficulty in handling big amounts, could not be used for international trade etc.
To supplement paper money a new type of money known as bank money or credit money was created by banks. It is in the form of checks, drafts, bills of exchange. It is accepted as legal tender money. It is safe and convenient and is used in the present economy for all transactions.
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Evolution of Money
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