 English : Presentation 2011 Lien William TD1

Subject: The history of money

Rice, shells, minerals

Coins

Bills

Cheques

credit cards, internet

As the subject was to talk about something which is related to money which is original. I did not found any subject that people do not think about when you talk to them and say the word “money”. So, this is why now I want to tell you about what is money where did it come, when did people invented, its history and how it has evolved through time. Well to want to start with a brief definition of what is money: “Money is any object or record, that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context”. So, to summarize it is something which you give to someone in order to get a product or a service. Before the onset of money people used to use things, which were not dedicaded to the used, of money like minerals, salt, shells, rice... It was not convenient to use for people and you cannot fix the real value for example you do not know how to value one pound of shells. Then came the time of coins, which was invented first in Asia during the seventh century before Jesus Christ. The coin was mostly made of gold or silver. Next, I think people did not found have a lot of coins in their pocket was easy to take away when you have a lot of money so came the time of bill which is made of a piece of paper which is more lighter and finnier than coins . The bill was first introduced in China during the 8th century. And which is of course more valuable than coins. Then, cheques(UK) or check(US) made their apparition which is an instrument that order a payment of money. Historians think it appears first in India (around 200 before JC) and it was invented in order to facilitate trades by eliminating the need for merchant to carry large quantities of currency to purchase goods and services. Next in the 18th century, the bank of England pioneered the first use of pre-print form in order to prevent fraud. But there is a drawback because when you pay with a cheque the seller don’t get the money immediately it usually take like 2 3 weeks for them to get the time from the bank so this is why a lot of market don’t accept cheque. Finally, it brings us to the “modern era” where the dematerialized money appears (credit cards, internet system credit…), indeed nowadays people usually put money into their bank account and when they have to pay for something they usually get their credit card, it is more simple than to carry the correct amount on themselves and they pay the correct

amount too. It is more practical because they do not have to carry change too. So it combine the advantage of the cheque and the coins. Next, during the last decade we can see that the e-business has grown significantly but many people do not think that internet is still enough safe for them. So there is new actors like “paypal” or “moneybookers” which “kepp” they money in the internet for you so when you are buying something you just give to the seller your code account and they will ask for “paypal” the money, of course “paypal” is checking for you if it is not a fake deal that you have made. And the seller don’t get the credit card number of the customer too so it is a way of improving security. At the end of the day, there is many form of money. It has changed so much that I think we cannot really give a definition of what money is. The most famous is of course the commodity money (something physical); the bank deposit but nowadays it tends to be replace by fiat money (something that is not physical). As you can see through time the money has change a lot in its form and its value. Before when people used shells or salt the value of the money depended of the value of the object like one pound of salt really costed one pound of salt but nowadays you can see that the cost of a coin of 2€ is significantly not the same as the value of a bill of 500€ and even more to illustrate a cheque. The production cost of a coin of 2€ should cost around 0.20€ whereas the bill of 500€ cost around 5 cents so the price of a coin of 2€ is 400% more than the production price of a 500€ bill. Maybe in the future we can even more increase this difference by replacing every currency by electronic currency (like the student card system for lunch which is call: “moneo”, credit cards…). Value

Production cost

Coin of 2€

~ 0,20€

Bill of 500€

~ 0,05€

Coins Bills Cheques

Credit cards

Internet account

Advantages Simple and you can check if they are real of fake Rigid Very light, slim Give the correct amount when you pay Amount immediately, solid, correct amount

Drawbacks Heavy to carry Fragile, You can’t get the amount immediately You can lose it, you have to memorize the code The seller must have a machine You can only buy on internet and not in the market