Text 19 on money

The word money comes from the name of the Roman goddess Moneta in whose temple silver coins were made.

Money did not always look like our money. Sometimes it was a ring or an ornament, or just a slab of gold or silver, from which coins were made. Still later cheaper metals replaced gold and silver.

British coins are made in the Royal Mint. The metals come in the form of slabs. The right proportion of each metal for the sort of coin being made, are put into large graphite pots and melted in very hot furnaces for two hours.

Then the metal is poured into moulds which have the shape of bars and left to cool. The bars of metal go through heavy rollers and become thin metal strips. The strips go into another machine which stamps out circles in them. The circles drop into a box. The waste metal is collected and remelted.

Next the circles are annealed: they are heated to red-hot and then dropped into cold water. During the process of annealing the copper takes some of the oxygen from the air. As a result a thin layer of copper oxide appears on the surface of the circle, which is removed with a weak solution of sulphuric acid.

While, hot the circles are stamped, and also pass through a special pressing machine which raises a rim on the coin. (The rim will help the coin to live longer.) In stamping the softish circle of the future coin is pressed above and below by two pieces of metal called dies. The upper die stamps the heads of the coin and the lower die stamps the tails. While being stamped the coin becomes hard again. When the coins are ready they are counted on an automatic machine, and inspected by hand. Then they are recounted and bagged up by machine, tied up and weighed and sent to the bank. The British monetary system was very complicated. The biggest unit is the pound (£). One pound has 20 shillings (s): £ 1 = 20 s. One shilling has 12 pennies (d): Is = 12 d. (Compare this to the Russian rouble (100 copecks), American dollar (100 cents), etc.) Changes have taken place in the British monetary system. One pound has 100 pennies. The new penny is 2.4 of the past penny. The new system is a decimal system.

Text 20 how money arose

Money arises when exchange develops beyond the stage of direct barter. In man's earliest days exchange did not exist. The level of production was so low that there was no surplus of anything which could be exchanged. Everything that was produced was consumed. Exchange, however, presupposes the existence of a surplus of things in order to obtain other things.

If the technique of production had not improved, the basis would not have been laid for the production of some surplus over and above immediate needs. Originally this surplus was exchanged by means of direct barter between tribes. Surplus was exchanged for surplus and the fact that such barter was possible and helped to satisfy needs is due to the fact that the division of labour within and between tribes had developed. Some tribes specialized in hunting, others in agriculture, still others in some other fields.

Exchange by direct barter served the satisfaction of needs which were beyond the capacity of individual tribes to satisfy.

As society developed there began to take place, the production of goods primarily for exchange and not for direct, immediate consumption of the producers. This signified the rise of commodity production, for a commodity is an article produced for exchange on the market. Commodity production has existed for a very long time. However, it has reached its highest form in capitalism, which is a system for the production of commodities.

It is commodity production that gives rise to money. But not immediately in the forms we know today - coins, banknotes, etc. Some standard has to be worked out as a basis for exchange.