What Is Money? A Fundamental Building Block of Society

Money is just a way to keep score on property. Before societies, clans, or countries started to print money or use some other item as currency, commerce was accomplished through bartering. For example, I will trade one of my cows for two of your pigs. As you can imagine this is very cumbersome. What if I want two of your pigs but do not have a cow? Now we must agree on something else that I have that you want and that you think is a fair trade for two pigs.

Enter currency.

If the going market value for a healthy cow is $100, and the going market value for a healthy pig is $50, then the buyer can exchange currency rather than handing over a cow.

Ancient societies often used objects before the printing press was invented and paper money appeared. China, for example, used tea bricks as money. The bricks looked like giant divided chocolate bars, and the buyer would break off sections to pay for the goods or services they were acquiring. Other examples include cowrie shells, feathers, and tulip bulbs as money.

Paper money or  electronic money allows for a much faster flow of goods and services.

What the price of something tells us is the value of an item or service relative to other goods or services.