The History of Money summary

To witness the dawn of money, we need to travel back in time to the Congo Basin of Africa in around 18,000 BCE. This is the date of the Ishango Bone, which contains carved notches that suggest a rudimentary form of bookkeeping. As wild as it may sound, the abstract concepts of value and trade may predate settled societies.

But money as we more or less know it today – in the form of currency – really took off in Mesopotamia, around 3500 BCE, in the urban settlements of Sumer. This is where the shekel, the earliest known form of currency, was born. And since the region was fertile farming land, the currency was tied to grain, with one shekel being equal to a bushel of barley.

Of course, with money came debt and interest. One of the first recorded names in history is a Mesopotamian man named Kushim. He’s recorded as having to pay back a barley loan at an astounding 33.33 percent annual interest. This pivotal innovation, of a rate of interest, turned money into a commodity with its own price. It linked a civilization’s present economic reality to an imagined future. This is important because it shows us that, even at this early stage, money was abstract. It was based on contracts, weights, and meticulous bookkeeping. In fact, it may be the very first thing humanity bothered to write about.

Then, somewhere around 1000 to 600 BCE, money got physical thanks to the Lydians. The Lydians were a civilization in what is now Türkiye, and with the invention of coins they revolutionized commerce. More than just physical money, these coins shifted the economy away from being a top-down central control affair and turned it into a flexible, bottom-up system that was driven by trade rather than a central authority.

This idea of a token representing universal value allowed for social mobility and a more complex world to take shape. The Greeks, always ready to embrace a logical system, went all in on coins with their silver tetradrachm – featuring the goddess Athena and her owl. The Greek currency went on to become the most widely minted coin of the ancient world for over 700 years, fueling the bustling democracy of Athens. 

The Romans built on these foundations, most notably with the introduction of credit. The power of credit allowed the empire to turn its conquests into vast financial streams, with people across society becoming shareholders in the empire’s expansion. But inevitably, this led to the world’s first credit crisis under Emperor Tiberius. As the empire expanded beyond its supply of precious metals, hyperinflation ensued, which in turn caused the collapse of Roman money and, one could argue, the Western empire itself.