The Rise and Fall of Good Money: A Tale of the Market and the State

Source: Ludwig von Mises Institute
by Rudolph Kohn

“The history of money is straightforward. Markets developed and expanded as long as the private sector controlled the money supply. A decline followed once the state took hold of the monetary system. This arc can be illustrated by looking at a few broad examples of historical money. Barter produces serious bottlenecks. The double coincidence of wants is a high barrier to trade. Primitive societies gravitated toward the use of various commodities as media of exchange. Iron hoes, salt, sugar, animal hides, and even animals themselves were given monetary applications in places around the world; bits of shell were even strung together for this purpose. However, while each of these goods satisfied some of the requirements for good money, they also had significant shortcomings …” (01/18/23)