The History Of Taxation And Money An Interesting & Long Story

The history of taxation and money dates back thousands of years. The two histories are closely related. Money allowed the barter system to end and to be replaced by a wider system of exchange. It greatly improved exchange since it avoided the need for a double coincidence of wants on which the system barter system depended.

Currency is a unit that makes exchange or trade easier. Archaeological artefacts and other evidence indicate that the first examples of currency were plain of livestock like goats and sheep. Trade based on swapping livestock for other items started way back as early as 9,000 BC.

Following that early beginning, as permanent agriculture began to be practiced, people began to use grain and other crops as a monetary unit. For example, one trader might ask someone to trade a fur or animal skin for a sack of corn. China played an important role in the early development of monetary units.

There is evidence that by about 1200 BC, people in China were using cowry (or cowrie) shells as a unit of exchange to facilitate trade. The cowry is a form of marine gastropod or sea snail. This shell has served as money throughout history even to the middle of this century. This is important since cowry shells themselves, unlike agricultural produce, have no inherent value and very little functional value.

A couple of hundred years later, by about 1,000 BC, the Chinese began using artificial cowrie shell as a currency. This development coincided broadly with the ending of the Stone Age and the beginning of the Metal Age. In addition to the fake cowrie shell, metal tools also were used as currency.

Over the following centuries, metal coins were used made from base, not precious, metals. These coins usually had holes in them so that they could be tied together for easier transportation and security.

Around this same time, in about 600-500 BC, a very similar practice emerged in Lydia, known today as Turkey. Lydia is often pinpointed by archaeologists as the location where monetary coins were invented. Unlike the Chinese coins made from base metal, Lydian coins were made from precious metals such as gold or silver. They had both exchange value and inherent value.

Lydian coins were also stamped or marked with distinct engravings to indicate their ascribed value. In the long history of taxation and money, Lydian coins are considered by many to be the first direct antecedents of the monetary coins we use today.

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