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Since we are in the payday loan business, it’s safe to say that we like money.. As much as we like money, we also know it. From how it functions in modern-day finance, to it’s earliest inception as commodities used for trade, it’s our business to know money and we thought you might make it your business to know, too!
This week, we’ll start with the earliest usage of what we know as “money.”.
Bartering
In 350 BC, Aristotle mused about the nature of money. He concluded that most objects have two uses; a) to serve a unique purpose for which the item was created and, b) to use as an item to barter with.
This idea wasn’t unique to the Greek philosopher, however, as there is record of ancient civilizations using bartering systems as early as 12,000 BC!
Before there was legal tender to exchange for goods and services, ancient people used goods or services for other goods and services that would be directly useful to them. We certainly continue to do this today, but the usage of even precious metal coins did not come into use until relatively recent history, considering how long this practice has existed in recorded human history.
The first recorded marketplace exchange included items like sacks of grain, produce or raw materials, which in turn could be traded for livestock or other kinds of raw materials and produce, etc. Handcrafted commodities, like beads or shells, were exchanged for more valuable items, or simply more of a lesser item. Interestingly, though we no longer use grain as a form of money, the term “grain of gold” comes from this ancient practice.
How did bartering work in terms of value, you might be asking? It’s not a straight-forward answer, but the bottom line is that there was no agreed standard measure. It depended largely on the supply and demand (something we are all still very familiar with!). Items that were considered to have great utility in terms of use, re-use and re-trade had much higher value than those that did not.
Bartering wasn’t only bi-lateral (between two individuals), though that was the most common. There were exchanges done multi-laterally through bartering organizations, but this was very limited.
With our current usage of bartering, we know that this practice didn’t die off with the introduction of coins and banknotes. Canada actually has a few barter exchanges, the largest being Tradebank, which was founded in 1987. On a more individual level however, all we need to do is turn to Kijiji or Craigslist to see this ancient practice at work today.
Have you ever tried bartering? Let us know in the comment section below & check back for Part II in the coming weeks!
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We’re open on Saturdays, so if you need some extra cash on the weekends, head on over to GoDay.ca! New customers can apply for up to $500 and our returning guests can apply for up to $1500!
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