Money in the Stone Age

It’s impossible to imagine modern history without money; but remember, it was not present with humankind all the time. Or was it? Actually, the first money appeared in the Stone Age, at the very dawn of the Homo Sapiens development. Of course, it was not the money as we know it, but just a measurement of exchange. Different tribes exchanged the fruits of their labour. Archaeological evidence shows that as soon as primal societies started diversifying their jobs according to their habitats, they started exchanging goods. Depending on their occupation, a tribe could exchange livestock, fish, wild game, and later, with agriculture developing, grain.

But gradually, out of all the exchanged goods, they started singling out universally required goods that later became an equivalent to money. All other goods were measured in comparison to this primal money. Depending on their habitat, different products could become such proto-money. For instance, the Yucatan peninsula Indians used precious cocoa beans, while New Zealand tribes exchanged special stones with holes; Canadian and Siberian tribes exchanged animals’ pelts, while Asian, African, and Oceanic peoples exchanged seashells.

Can an Economy Survive without Money? We actually dwelled on that topic in one of our articles.

As we can see, in the Stone Age and earlier, the most liquid goods in the region became money. Nomad tribes exchanged cattle for quite a long time. For instance, cattle was mentioned in Ancient Greek sources as a popular means of exchange, so the value of a product was measured by the number of sheep, cows, and other animals needed to buy it. However, obviously, cattle was not a very convenient means of measurement; there was required something as valuable that did not require much space or special storage conditions and could be divided easily. In some places, such a product was salt. But in the Stone Age, salt was not very common; many tribes did not even know this preservation tool. The same was about grain, it couldn’t become a popular means of exchange because it required special storage conditions. So, people needed something to exchange their goods for; something that was:

• small but still valuable;
• rare, so that it did not lose value at once;
• resistant to external factors like bad weather, poor harvest year, etc.

Precious metals like gold, silver, and copper had all these features. So, of course, for many centuries, they were a universal means of exchange; later, money was made out of precious metals too. It was until very recently that the value of the world’s currencies was measured in the precious metals that this government possessed.

You can read more about the history of the Gold Standard and why people decided to step away from it in our article called “Why Gold Standard is Not Standard Anymore”.

However, people started mining and minting precious metals only in the Iron Age which lasted from around 1200 BC to 340 AD. Before that, people had to have some equivalent to money too. One of the most interesting examples of the Stone-Age money equivalent was seashells. The cowrie shells lasted the longest: it was first registered as money in Ancient China where the cowrie hieroglyph is the same as the one for money. They became extremely popular as a means of the slave trade between the XVI and the late-XIX centuries. They were very common across continents as a means of payment; people in Africa, India, China, North America, Oceania, and many other places used these curious shells for quite a long time. Why were they so popular? Well, they fit the requirements perfectly: they were rare, impossible to fake, resistant, and easily transportable. As a result, by the XVI century, the cowrie shells were the money used to buy countless African slaves for the New World plantations. As a result, their popularity, uncontrolled import, and exchange for slaves led to hyperinflation, so the shells lost value.

We have one more article you might like, about money bubbles that make money or goods lose value; it is called “Tulip Mania and Green Men”.

Cattle, grain, salt, spices, fur, animal teeth and horns… There were so many goods that were used as money in the pre-historic times; none of them was perfect, and people have been looking for the perfect means of exchange for as long as humankind exists. Can we ever make an ideal currency or is it just a dream that will never come true?

According to the analysis group findings: reserveum.org