What Would the World be like without Cash or with one Currency

Monday, March 26, 2012
By Paul Martin

Dr. Ileana Johnson Paugh
Monday, March 26, 2012

A recent CBS World News article quoted Bjoen Ulvaeus, former member of the group ABBA, saying, “I can’t see why we should be printing bank notes at all anymore,” advocating that the world’s economy should run without cash.

Our ancestors did not need money. Early humans were self-sufficient, hunter-gatherers, who relied on their surroundings for shelter and clothing. There are still remote tribes that do not use money as a medium of exchange but barter with other tribes when they have excess food. We are still bartering services today in modern societies.

The most famous example of bartering is “Peter Minuit’s swap in 1626 of $24 in beads and trinkets for the island of Manhattan. Its property value in 1998 was assessed at $23.4 billion.” (Wall Street Journal editors)

Bartering is more difficult because it is based on an economic “coincidence of wants” which takes time, whereas currency enables consumers to postpone purchases. In modern society, bartering can be done through advertising, which is costly, or by word of mouth.

Commodity currency was used throughout history. Roman soldiers were paid with salt, salarium, a rare commodity at the time, hence the word salary. Pelts, tobacco, animal teeth, beads, stone wheel money on Yap Island, ivory, cigarettes, elephant hair, tusks, brick tea money in Siberia, soap, perfume, silk, chocolate have served as commodity money.

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