The Emergence of Money as a Metaphor: Journey from Seashells to Metal Coins!

The origin of money is commonly attributed to the invention of metal coins in Lydia, followed by an analysis of the economic advantages gained through the discovery of money. However, the story of money extends far beyond the invention of metal coins and is rooted in social, cultural, and political needs, in addition to its economic functions.

In classical economic theory, money is depicted as a commodity that emerged to address the shortcomings of the barter system and replaced barter in commercial activities. The primary challenge of barter is the necessity for mutual desires to intersect. If a farmer with wheat wants to obtain milk, it is not enough to find a farmer with only milk; the found farmer must also desire wheat.

As human societies engaged in commercial activities with increased frequency and diversity, lacking the technology to quickly access such information or store products for extended periods, they recognized the deficiencies of barter and invented money, a view that has been popular for a long time. However, this narrative, while overlooking the advantages of barter in certain situations, contradicts historical reality. Barter did not become obsolete after the invention of money, and there were times in history when barter regained popularity as a commercial tool when money could not fulfill its duties.

Between 1945 and 1954, 588 commercial agreements occurred without the use of money. In 1946, the UK sold Rolls Royce Nene jet engines to the USSR in exchange for grain, just one example. In 1990, the USSR purchased Pepsi with vodka and warships, valued at 3 billion dollars at the time, illustrating the significant scale of barter even in recent history. Although money has advantages compared to barter, the shortcomings of barter do not necessarily compel the use of money.

Therefore, examining the purposes served by primitive forms of money before metallic coins can provide a more accurate understanding of how and why money originated.

• What is the Purpose of Money?

First, we need to understand the difference between money and primitive forms of money. A commodity must possess three essential qualities to be called "money":

1. A measure and unit of account for value,
2. A medium of exchange,
3. A store of value.

Primitive forms of money partially or completely possess some of these qualities but are non-metallic, unlike metallic coins or their derivatives (such as banknotes).

• Tambua

Whale Teeth Used as Money Like many technological inventions, primitive forms of money initially served different purposes than those they later assumed. Objects used as ornaments in religious rituals or daily life eventually began to function as money. The value of such objects was determined not by commercial or financial criteria but by cultural and social values. Tambua, whale teeth used in Fiji, is an excellent example of primitive money. Still an essential part of official ceremonies today, tambua held significant importance in religious ceremonies and as an ornament. While overshadowed by its cultural value in commercial use, tambua occasionally served the functions of money. Even after Fiji became part of the British Empire in 1874, local governors preferred payments in tambua instead of pounds sterling to demonstrate their prestige.

• Seashells as Money!

Seashells, serving as ornaments and reliable currencies due to their ease of counting, durability, and inability to be easily replicated, also held a significant place among primitive forms of money. Shell currencies were used for trade in various parts of the world from West Africa to Oceania, North America to China, for an extended period. In Classical Chinese, the pictograph for "money" was represented by a seashell, and bronzes shaped like seashells were considered among the first prototypes of metal coins. Moreover, in times when metallic coins could not fulfill their roles throughout Chinese history, seashells, like barter, regained popularity as commodities. Seashells also existed as rivals to modern money in European colonies for an extended period. The complete disappearance of seashells from circulation in Africa lasted until the mid-20th century.

• The Age of Metal Coins

With the increasing significance of metals in the lives of Early Age humans, the foundation for the first metallic coins was laid. Abundantly found in nature, metals gained demand not only as ornaments but also as a common value as people developed metallurgical skills. Metals were durable, easily portable, and divisible, making them suitable for use as money. Particularly in Babylon, along with an early banking system, metals became widespread as a means of payment. Initially starting with the recording of temple offerings in the form of grain, this system gradually expanded to include other agricultural products and metals such as silver and gold. Temples served as secure places for storing these valuable metals, and customers could retrieve part or all of their deposits through receipts inscribed on clay tablets. Payments made through these deposits became more prevalent, and the use of metals in trade expanded considerably.

• The Coinage Revolution in China

Around 1000 BCE in China, during the Zhou Dynasty, bronze objects such as swords, hoes, and spades were used as money alongside the previously mentioned bronze seashells. Approximately 300 years later, independently of Lydia and almost simultaneously, China began using the first metallic coins. Unlike Lydia, these coins were made of bronze, a less valuable material than the silver and gold mixture used in Lydia. The characteristic holes in the center of Chinese coins emerged as a result of the need for a higher quantity of coins in transactions, allowing them to be easily carried by threading a string through the holes.

• Lydians and the Invention of Modern Money

By the 7th century BCE in Lydia, metallic coins, the ancestors of today's coins, came into use. Following this, money spread incredibly rapidly. Ionian city-states did not hesitate to adopt this technology from Lydia, their commercial partner. Through them, the use of coins spread to other Greek city-states in the Aegean, as Greeks colonized and conducted trade across the Mediterranean and the Black Sea. In the 5th century BCE, satraps in the Persian Empire began minting their own coins in the satrapies they governed, and Greek city-states viewed coin minting as a symbol of their independence. In 450 BCE, Athens increased its influence over other states by mandating the use of Athenian drachmas among its allies, establishing Athens as the central hub of trade in the Aegean. The use of the Athenian drachma extended beyond the Mediterranean and Black Sea basins. Drachmas from around 500-485 BCE were found near the city of Charsadda in Pakistan, approximately 4000 kilometers away from their place of origin. Money, becoming a symbol of political power and sovereignty, still retains this characteristic today.

• Conclusion

While interdisciplinary work is common in the field of economics, especially regarding monetary policy, the importance of an interdisciplinary approach is evident. As demonstrated by the processes it underwent during its emergence, money is more than just an economic commodity. The value of money, the extent to which it fulfills its commercial and financial functions, is influenced by the power of the political authority minting the money, how money shapes social classes, and how those using money perceive it. In a world economy where inflation is reviving and in countries like Turkey struggling to maintain the value of their currency, having a more comprehensive understanding of money, considering its economic activities and its impact on the social classes and perceptions of those who use it, is crucial for future policies. Controlling money, taking into account not only the economic activities it animates but also the social classes it influences and the perceptions of those using it, will help ensure that monetary policies achieve the desired effects.