Glamor Economics

Chapter 110

Chapter 15 Understand the "money" rules around you - the financial system

Section 1. Double your worth because of transactions——Currency

According to economic theory, any commodity that can perform functions such as a medium of exchange, a measure of value, a deferred payment standard, or a fully liquid storehold of wealth can be regarded as money.

In some islands in the Pacific, taxes are paid in a currency known as "gamali", a shell.Residents of the Melanesian Islands generally keep dogs, so they use dog teeth as currency. One dog tooth can buy about 100 coconuts, and to marry a bride, you must give her hundreds of dog teeth as gift money.Later, some greedy white swindlers brought a large amount of dog teeth to Melanesia to defraud the aborigines of various useful materials, which once caused "inflation".

Perhaps most curiously and interestingly, is the stone currency used by the inhabitants of the Pacific island of Yap.Every currency there is called "one cent", but such "one cent" cannot be carried on the body.Because it is a "monster", it is a round stone with a round hole in the center.According to the regulations of the locals, the larger the volume and diameter of the "fen", the higher the value.Therefore, some high-value "points" have a diameter of up to 5 meters.This kind of currency is carved out of aragonite, a limestone mineral, but there is no aragonite on Yap Island. The locals have to sail hundreds of miles away to Palau Island to drive down the big stone and transport it back on a raft.The thrilling voyage at sea alone will take several weeks.

Huge stone currency has both advantages and disadvantages. The advantage is that it is not afraid of theft, fire and water, durable and wear-resistant. The disadvantage is that it is not easy to carry and cannot be carried.Therefore, when using this currency to go shopping, the owner must be brought to the side of the stone currency to check the quality, and then negotiate the price.Due to the difficulty of transportation, people had to stamp the stone currency they got from selling the goods and let it stay in place as their own "real estate".

The predecessor of currency is an ordinary commodity, which gradually evolves into a general equivalent in the process of exchange.Money is a commodity, but it is not an ordinary commodity, but a special commodity.After the emergence of money, the entire commodity world split into two poles, one pole is a special commodity - money, and the other pole is all ordinary commodities.Ordinary commodities appear in the form of various use values, while currency appears in the embodiment or measure of value. Only through comparison with currency can the value of ordinary commodities be reflected.

The history of human use of money can be traced back to the era of barter.In primitive society, people used barter to exchange the materials they needed, such as a sheep for a stone axe.Sometimes limited by the types of materials used for exchange, it is necessary to find an item that can be accepted by both parties.For example, one sheep is exchanged for two stone axes, and one stone ax is exchanged for three taels of salt. Here, the stone ax has the function of currency.In the early history of mankind, Bei served as a general equivalent because it was not easy to obtain, so "Bei" became one of the most primitive currencies.Today's Chinese characters such as "earning", "losing" and "wealth" are all next to the word "bei", which is the imprint of the circulation of shells as currency in the past.

With the development of society, items used as currency were gradually replaced by metals.

With the further development of the economy, metal currency also showed inconvenience in use.The large number of metal coins required for large transactions can be annoying due to their weight and size.Thus paper money, a symbol of metal currency, appeared.The earliest paper currency in the world is Jiaozi, which appeared in the Sichuan area of ​​China during the Song Dynasty.

The use of electronic money is an important change in the history of modern money.In recent years, with the development of Internet commercialization, online financial services have begun to be carried out worldwide.

[links to related words]

The gold standard is a monetary system with gold as the standard currency.Under the gold standard, or the value of each unit of currency is equivalent to a certain weight of gold (ie, the gold content of currency).When different countries use the gold standard, the exchange rate between countries is determined by the ratio of the gold content of their respective currencies, known as coin parity.

(End of this chapter)