Money Without Boundaries

Chapter 1Money Through Time – A Different Perspective

“The term money has two very different meanings in popular discourse. We often speak of someone ‘making money,’ when we really mean that he or she is receiving an income. We do not mean that he or she has a printing press in the basement churning out greenbacked pieces of paper. In this use, money is a synonym for income or receipts; it refers to a flow, to income or receipts per week or per year. We also speak of someone's having money in his or her pocket or in a safe-deposit box or on deposit at a bank. In that use, money refers to an asset, a component of one's total wealth. Put differently, the first use refers to an item on a profit-and-loss statement, the second to an item on a balance sheet.”

– Milton Friedman

Before humans had, or even considered having, a universal medium of exchange, they traded one commodity directly for another – two goats for an ox or wheat for labor – but they had no real means of measuring the relative value of what they were trading. So began the search for a universal medium of exchange – money –and throughout history, humans tried everything from cowrie shells to cigarettes. But cowrie shells, used in ancient times on the African coast,¹ broke and wore down, and more and more of them kept washing ashore. How valuable could they be if there was a seemingly limitless supply? Cigarettes, used as currency in Germany just after World War II ended,² were certainly scarce enough, but inevitably ...