SARA PATHSHALA

The evolution of money reflects humanity’s need for efficient exchange, trust, and economic scalability. It’s a story of adaptation, driven by social, technological, and political changes. 1. Barter Systems (Pre-3000 BCE) Before money, people traded goods and services directly—think swapping grain for livestock. Barter worked in small, trust-based communities but faltered with scale. Its flaws? The "double coincidence of wants" (both parties needing what the other offers), indivisibility of goods, and no standard value measure. 2. Commodity Money (3000 BCE–700 BCE) To solve barter’s issues, societies used widely valued goods as mediums of exchange—shells, beads, salt, or livestock. These had intrinsic value and were portable. Examples: Cowrie shells in Africa and Asia, or grain in Mesopotamia. But commodities were inconsistent in quality, hard to transport in bulk, and perishable. 3. Metal Money and Coinage (700 BCE–1500 CE) Metals like gold, silver, and copper became po...

Milton Friedman : "Money is anything that is generally accepted as payment for goods and services or in the repayment of debts." John Maynard Keynes : "Money is that which serves as a unit of account, a store of value, and a medium of exchange." M oney is defined as anything that serves as a medium of exchange , a unit of account , and a store of value . These three functions are fundamental to understanding money's role in an economy. Medium of Exchange: Money is universally accepted in transactions for goods and services. It eliminates the inefficiencies of bartering by providing a common item that everyone agrees to use, making trade smoother and more efficient. Unit of Account: Money acts as a standard measure of value. It allows us to assign prices to goods and services (e.g., a car might cost $20,000, or a loaf of bread $3), making it easier to compare their worth. Store of Value: Money retains its value over time, enabling people to save it and u...