Why does the world have money?

Question: Why does the world have money?

Asked by hannahjanehunt to Antonia, Douglas, Hugh, Matt, Tom on 15 Jun 2010 in Categories: General.
- Antonia Hamilton answered on 14 Jun 2010:
  
  Money is a social invention which allows people to trade more easily. If you imagine living in a primitive village, you might say to your neighbour – I’ll swap you five potatoes for one chicken – and that lets you trade without money. But as soon as things get more complex, for example, your neighbour doesn’t want a chicken but does want some deer hides from the person on the other side of the village, then having a standard way to trade things makes life easier. So tribes started to trade shells or precious stones, rather than just potatoes. And that was the first kind of money.
- Matthew Hurley answered on 14 Jun 2010:
  
  Back in time people lived in small communities that functioned by different people with different skills doing the jobs that the whole community needed. Eventually these communities started trading with each other – I’ll give you my pig if you build me a house (bartering). Then trading became more important and a standard form of giving stuff value was needed – hence money.
- Douglas Blane answered on 14 Jun 2010:
  
  Before money was invented people had to barter. So I’d go “I’ll write you a sign for your shop if you give me a loaf of bread.” Or my son would go “I’ll take your photograph if you give me a barrel of beer.”
  
  Course photos hadn’t been invented but you get the idea. Money just makes it a lot easier to swap what you can do or make for what other people make – and you want.
  
  If you’re a guy you can also jingle it in your pocket when you’re not sure what to say next.
- Tom Hardy answered on 14 Jun 2010:
  
  Money is simply a way of trading. Think about it… pick up a £5 note and look at it, it is only a piece of paper, nothing special really. But it is what it represents that is important. For the world to be civilised we have to have a society where we can trade for the things we need. In ancient times people would swap goods. A shepherd would trade his sheep for something he didn’t have lots of like fruit or vegetables. Later came early forms of money, people would use buttons or stones that they would agree represented a certain value. So a sheep may cost two stones and an apple one small stone. It is this principle that over many thousands of years evolved into the money we use now. We need it to get the things we need, if everything was free people wouldn’t bother making products. Image if you made computers, why would you bother if you couldn’t sell them for something valuable so our notes and coins represent something of value that we can save or spend for something else.
- Hugh Roderick answered on 15 Jun 2010:
  
  Because humans invented it to help them trade several thousand years ago.

Question: Why does the world have money?

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