The History of Money Explained in One Infographic
Today’s infographic from Mint.com highlights the history of money, including the many monetary experiments that have taken place since ancient times.
Some innovations have stood the test of time – precious metals, for example, have been used for thousands of years. Paper money and banknotes are also in widespread use, after first being turned to in China in 806 after a copper shortage prevented the minting of new coins.
Other experiments didn’t have much staying power. The adoption of strange currencies such as squirrel pelts, cowry shells, or parmesan cheese are only remembered for their peculiarity.
Further, other attempts to stabilize the monetary system were abandoned early as well. The original US gold standard lasted just 54 years, after FDR ditched it during the Great Depression. The Bretton Woods version (gold-exchange standard) lasted even shorter, abandoned after being in place for 26 years when Nixon ended all convertibility between the US dollar and gold in 1971.
The Newest Chapter in Our Monetary History
Although the infographic ends with the introduction of cryptocurrency in 2009, it should be noted that the newest chapter in the history of money is taking place right before our eyes.
The “War on Cash” has been accelerating in recent years, as governments and central banks have called for the elimination of high denomination banknotes. While these anti-cash motions have also been made in many Western countries, the most vivid example of the demonetization is currently happening in India.
In November 2016, Indian Prime Minister Narendra Modi demonetized 500 and 1000 rupee notes, eliminating 86% of the country’s notes overnight. While Indians could theoretically exchange 500 and 1,000 rupee notes for higher denominations, it was only up to a limit of 4,000 rupees per person. Sums above that had to be routed through a bank account in a country where only 50% of Indians have such access.
There have been at least 112 reported deaths associated with this demonetization – including suicides and the passing of elderly people waiting in bank queues for days to exchange money. India’s largest organization of manufacturers, the All India Manufacturers Organization, also estimates in a report that micro-small scale industries suffered 35% jobs losses and a 50% dip in revenue in the first 34 days since demonetization.
While demonetization in India is off to a rough start, some believe it can still be ultimately successful in the long-term. Regardless, the “War on Cash” still has incredible global momentum – and the end result – however it turns out – will likely form another important chapter in the history of money.