Points to Ponder 6/8/09
["Points to Ponder" is heard every Monday at 6:45pm EST at www.therealpublicradio.net.]
Hi everyone and welcome to Points to Ponder on TheRealPublicRadio.net. We hope we are sparking thoughts that ignite you into actions. I’m Dianne Ell, your hostess tonight.
The next 15 minutes is sponsored by the Citizens Reform Center also known as CRC.
If you would like more information about our mission of helping people please visit our website www.citizensreformcenter.com.
The last time we talked we went over the concept of what money is by using Glyn Davies’ A History of Money. We talked about how all sorts of things have been used as money at different times in different places. they included tangible items such as gold, silver, beads, eggs, ivory, jade, rice, salt, wampum, and astonishingly in complete contrast to these tangible forms there is a form of money with virtually no tangible properties whatsoever - electronic money.. which has gained rapidly in popularity and is the main form used today.
We found it is almost impossible to define money in terms of its physical form or properties, therefore any definition we gave to money had to rest on its function. Just what did money do? We found we had to look at the abstract and the concrete functions which are: Unit of account, Common measure of value, Standard for deferred payments, Medium of exchange, Means of payment and it’s ability to be stored and still hold value.
The abstract part of our definition is tied to the “perception” of whoever is using and placing value on the items and their agreement in it’s use. The concrete part is more readily recognized. It is a form of money widely accepted, it is an object that can always be used to pay for any purchase or settle any debt and has durability when used in trade, and a minimum of opportunity to cheat others.
Not everything used as money has ALL the functions we listed and although an item may start out as being used for money it, can change or be eliminated as time moves on.
As Davies stated, “Money is anything that is widely used for making payments and accounting for debts and credits.”
Let us now take a look at the development of money. The use of money was not only a necessity to ease the restrictions of barter but also from other non-economic causes.
These uses include the need for a standard form of tribute, bride-money, for ceremonial and religious rites, and even blood-money. Money originated very largely from these non-economic causes.
Natural selection and ease of use narrowed down the items used in barter to one or two things that filled our list of function in local communities. However, as the world around these smaller local areas began to be available the need for some standard form accepted from town to town, kingdom to kingdom became a necessity. This is backed up by archaeological, literary and linguistic evidence of the ancient world, and the tangible evidence of actual types of primitive money.
Davies’ makes note that the word “pay” is derived from the Latin “pacare” meaning originally to pacify, appease, or make peace with - through the appropriate unit of value customarily acceptable to both sides. The key thing we need to remember is that IT MUST BE ACCEPTABLE TO BOTH SIDES. This will be important when we look at the contracts banks say they are extending.
Many societies had laws requiring compensation in some form for crimes of violence - blood-money.
There was also the custom of payment for brides in order to compensate the head of the family for the loss of a daughter’s services.
Rulers have since very ancient times imposed taxes on or exacted tribute from their subjects. It is unfortunate that human nature once again has picked up on this and governments are taxing the people right into poverty on the whim of a few who may be throw backs to this kind of thinking.
A widespread custom was Religious obligations which entailed payment of tribute or sacrifices of some kind.
Societies therefore found themselves in need of some means of payment for blood-money, bride-money, tax or tribute. These circumstances created the right climate for the use of a standard form of money to spread. Because there was an increasing use of standards for these situations the articles in use found their way as money in local areas replacing barter systems.
It is easier to follow the development of money by looking at primitive forms of money in the Third World and North America because there is better documentation through various means then what we find in Europe. By looking at a few specific items in some specific locations we can get a general feel for the overall global development of money.
These are the use of wampum and the custom of the potlatch or competitive gift exchange in North America, disc-shaped stones in Yap, cowrie shells over much of Africa and Asia, cattle, manillas and whales’ teeth.
As recently as 1949 an ornamental metallic object called “Manillas” was worn as jewelery and was used as money in West Africa. The manillas were an ostentatious form of ornamentation. Because of this it created their value thus the prime reason for their acceptability as money.
Because precious metals have had an ornamental use in societies throughout history may be the reason we see them used consistently as money. In North America, Wampum’s use as money undoubtedly came about as an extension of its desirability for ornamentation.
Whales teeth in Fijia were and in certain cases still are a significant feature of certain ceremonies. Considered as bride-money, whale’s teeth have a symbolic meaning similar to that of the engagement ring in Western society.
An interesting side note is that Whale’s teeth were “tambua” meaning that they had religious significance and this is where we get the base of our word “taboo”. It may surprise you to know that as recently as the mid 1960’s the use of stones, the fei stones of Yap, were still being used for money.
The potlatch ceremonies of Native Americans were a form of barter that had social and ceremonial functions that were at least as important as its economic functions. The potlatch is a festival or ceremony practiced among Indigenous peoples of the Pacific Northwest Coast. At these gatherings a family or hereditary leader hosts guests in their family’s house and hold a feast for their guests. The main purpose of the potlatch is the re-distribution and reciprocity of wealth. The status of any given family is raised not by who has the most resources, but by who distributes the most resources. The hosts demonstrate their wealth and prominence through giving away goods.
A side note here that should have been a warning to us was that consequently when the potlatch was outlawed in Canada (by an act that was later repealed) some of the most powerful work incentives were removed - to the detriment of the younger sections of the Indian communities. Their desire to prove their own worthiness through the voluntary dispensing-giving to charity as you would- was thwarted.
Glyn Davies points out that this form of barter was not unique to North America. The most celebrated example of a competitive gift exchange was around 950 BC, between Solomon and the Queen of Sheba. On page 13 Davies notes “Extravagant ostentation, the attempt to outdo each other in the splendor of the exchanges, and above all, the obligations of reciprocity, were just as typical in this celebrated encounter, though at a fittingly princely level, as with the more mundane types of barter in other parts of the world.”
When looking at things used for money we must definitely take a look at “cattle”. The English words “capital”, “chattels” and “cattle” all have a common root. Davies’ cautions us that “one should not confuse the abstract concept of an ox as a unit of account or standard of value, which is its essential but not only monetary function, with its admittedly cumbersome physical form. Once that is realized (a position quickly reached by primitive man if not yet by all economists or anthropologists), the inclusion of cattle as money is easily accepted, in practice and logic.” Also on page 41, cattle are described by the author as mankind’s “first working capital asset”.
The religious use of cattle for sacrifices probably preceded their adoption for more general monetary purposes. And although for sacrifice quality - “without spot or blemish” - was important when cattle were used for money….yep you got it…..QUANTITY was of more significance since cattle, like coins, can be counted.
To this day cattle are used as money in parts of Africa. Davies’ also points out that until well into the present century the Kirghiz of the Russian steppes used horses as their main monetary unit with sheep as a subsidiary unit. Small change was given in lambskins!
The next question that begs to be asked is “where can all these different types of “money” be safely stored?” Hmmm …Did I hear someone say banks? Yes your right! The origin of the concept for our modern day banks goes back as far as Mesopotamia. Before the thought of the first coin even entered into someone’s head. Banks weren’t always the black holes that prey on people.
The temples in Mesopotamia proved a safe place to store grain. The use of receipts to track what the original owner had deposited also became useful to transfer ownership to a third party. Eventually even private houses became involved. Laws regulating their operations was included in the code of Hammurabi.
Egypt also had a centralized method of storage with written receipts given. Owners would withdraw the grain as their household needed it. This blossomed into receipts being transferred to others to cover debts, taxes, tribute and religious obligations. Even after coins were introduced to Egypt the granaries were still used the most inside of the country reserving the coins for foreign trade.
The development of coins that could be securely used with accepted universal value is interesting and worms its way through the centuries. What is important to us is that because each country had its own coins with many variations the need for a coin exchanger developed. This could be carried out by an individual or one of the banking houses. Because of this centralization of wealth the next logical step became the loaning or financing of trading ventures by ship or caravan.
Next week we will be looking quickly at coins to paper. How it set the stage for the ability to defraud people today.
Ponder this week on where your wealth is placed. Should you be thinking about gold or silver as a purchase you should be doing soon?
To learn how CRC can help with your financial and court issues visit our website at www.citizensreformcenter.com.
Thank you for listening and till next time be in Peace.
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