The Evolution of Money

Before the evolution money, exchange was done on the basis of direct exchange of goods and services. This direct exchange is known as the barter system. Barter system involves the direct exchange of one good for some quantity of other goods, for instance, exchanging a horse for a cow.
Consequently, this exchange at a time become more difficult in that people finds it very difficult to get someone that can exchange what they have to what they want.
Apparently, this problem of search resulted to the problem of barter system. Consequently, in the quest to solving the problem of barter resulted to the means of exchange that requires no goods for goods rather money for goods, which is classified as monetary evolution of money .
To further understand the monetary evolution of money, we will have to discuss each of the Era in the evolution of money, down to the credit money era as follows;

1.The Era of Spherical Adventure (Anomalism)
This era was marked by the movement of man from one end of the earth to the other. At last, he discovered that most of the fruit seeds he had dropped in the past had geminated and grown into new fruit producing trees. Thus, this discovery marked the beginning of agriculture, which called for ownership, possession and control. The end of this era opened the door for a new era called the subsistence era.
2. The Era of Subsistence (Autarky or No Exchange)
Autarky is a Greek word from autarkeia meaning self-sufficient. Autos mean self and arkein means to be strong enough or sufficient. Consequently, it define autarky as a state of independence and been functional without partaking in any international trade.
The era of subsistence was marked by the simple ownership, possession and control of the natural resource. However, man discovered over time that whatever he personally owned possessed and controlled in expanding the family could not be enough for him. This development gave rise to the emergence of direct exchange.
3.The Era of Barter System (Direct Exchange)
This era of direct exchange was marked by the exchange of goods and services for goods and service within and among the expanding families. The system had no room for any medium of exchange as people exchanged the goods and services at their disposal with what the other party had for exchange.
This simply means exchanging directly with your immediate or extended family person without necessarily looking distinct person before exchanging. For instance, if a man who had a goat needed a bag of orange, he could directly exchange his goat for the bag of orange without recourse to any medium of exchange.
4. The Era of money exchange-community money (indirect  exchange)
This era actually came to resolve some of the problems posed by the barter system.
Thus, unlike the barter system, the money exchange commodity money era identified and designated few commodities to serve as medium of exchange, such commodities as oxen, clothes, slaves; salt, etc were all used as a medium of exchange. Consequently, some scholars argued that these commodities were acceptable as the medium of exchange at this era because they were the most priced and sought after by the buyers of goods and services .
5.The Era of Money Exchange (Full bodied money)
The era of money exchange or full bodied money, provided solution to some of the persistent barter system problems. Money exchange or full bodied money era was the period when metals and subsequent papers were used as money. Iron was the first metal used, but with effluxion of time, gold, silver, copper were introduced to replace iron because the latter was prone to rusting and very bulky to convey from place to place. The gold metals were replaced by cheaper metals such as silver and copper. At this era, the face and intrinsic values of money were equal

6.The Era of Paper Money
This is the era of goldsmith. The development of paper money started
with goldsmiths who kept strong safes to store their gold. As goldsmith was thought to be honest merchant, people started keeping their goldsmiths them for safe custody. Thus, in return, the goldsmiths gave the depositors a receipt promising to return the gold on demand.
However, these receipts of the goldsmiths were given to the sellers of commodities by the buyers. Thus, the receipts of the goldsmiths were use as substitute for money. Such paper money was backed by gold and was convertible on demand into gold. This ultimately led to the development of bank notes.
7. The Era of Credit Money
Another era in the evolution of money in the modern world is the use of
the cheque as money. The cheque is like a bank note in that it performs the same function. It is a means of transferring money or obligation from one person to another. A cheque is made for a specific sum and is not a bank note, as it empires with a single transaction. Thus, cheque is simply a written order to transfer money  
8.The Era of E-money (Electronic and Cashless)
This is the era were payment or withdrawal is done by the use of card. In Nigeria, the concept of e-money was introduced in 1996 when the C.B.N. granted approval to the then All State Trust Bank Plc to offer ESCA Smart Card product
Consequently, E-money simply means the application of electronic devices to effect payments arising from business transactions without the use of cash. It is important to note that e-money era has not foreclosed the use of note and coins, cheques and other credit instruments in transaction, rather it strictly de-emphasizes the use of cash in making payments in both local and international transactions.


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