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Celebrate the Concept of Money

AncientGreekCoins

The year 2020 has certainly been tumultuous. As we come toward the end of the year that many have found difficult and challenging, there are still some things for which to continue to be grateful.

One thing for which people should express gratitude, but may never have considered doing so, is the concept of money.

There are some people who would object to doing so by misquoting a biblical phrase that “money is the root of all evil.” In the King James Version of the Bible, the entire quote from 1 Timothy 6:10 is “For the love of money is the root of all evil; which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.” Therefore, money is not named as the root of all evil; rather it is the love of money that is the culprit.

Before the establishment of the first circulating medium of exchange, direct barter was the means of voluntary exchange. This was tremendously inefficient, as many times what one party had to barter was not of equal value to another party (trading oranges for an ox or hiring a mercenary soldier for anything that would have value to them when they returned home)

No one really knows where and why the concept of circulating money first arose. The use of gold for commerce goes back 4,000 years, although initially this was used after determining the approximate weight and purity of whatever form of gold someone possessed.

The creation of coinage of consistent size and metal content arose first in the Greek lands in and around Lydia in Asia Minor during the 7th century B.C. Early coinage consisted of electrum gold or silver, both of which carried an intrinsic value equal to their commercial value.

In essence, the origins of coinage evolved as a free market means to facilitate trade, not as something that held value because any government said so. Governments merely adopted the standards of weights and purities, initially only of gold and silver coins, that people would accept.

There are many theories of why coins were created. The one that makes more sense to me than others is that coins were created to pay mercenary soldiers from other lands, making wealth easy to transport. Coins fulfilled the necessary requirements to be durable, able to be struck of consistent metal value, divisible, portable, exchangeable and recognizable by many people as to their value.

The creation of money facilitated an increase in the standard of living around the world as it facilitated trade beyond direct barter. A tailor could use a coin to pay for wheat, which the farmer could then use to purchase a new plow, which the plow fabricator could use to purchase new clothes from the tailor. Thus, the same coins could be used to enable widespread commerce. Money has continued to promote voluntary trade and increased prosperity ever since.

So, while not forgetting about today’s concerns, please take a moment to appreciate that unknown people thousands of years ago came up with the concept of money.

By the way, keep in mind that most people don’t value money as a stand-alone asset. Instead, they value money for what goods and services they may receive when they spend/trade/get rid of their money.

Patrick A. Heller was honored as a 2019 FUN Numismatic Ambassador. He is also the recipient of the American Numismatic Association 2018 Glenn Smedley Memorial Service Award, 2017 Exemplary Service Award, 2012 Harry Forman National Dealer of the Year Award and 2008 Presidential Award. Over the years, he has also been honored by the Numismatic Literary Guild (including twice in 2020), Professional Numismatists Guild, Industry Council for Tangible Assets and the Michigan State Numismatic Society. He is the communications officer of Liberty Coin Service in Lansing, Mich., and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at www.libertycoinservice.com. Some of his radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio archives posted at www.1320wils.com).