How do societies initially trust using money when it has no inherent value?
In: Economics
There are a lot of good answers here talking about the trust aspect of believing that the money will work after the initial transaction, but the biggest thing is that it’s just easier to use money than anything else.
Barter is annoying. At any moment, you’d need to justify the exchange of apples for chickens. But what if the guy yesterday traded shoes for chicken? Are shoes more valuable than apples? What about when the guy with the apples sold apples to another person for two bags of rice? Is my chicken worth two bags of rice? It’s too many exchange rates changing every day. Money is uniform.
But even more simply than that, money is easy to carry around. Only the real hardos would initially prefer lugging around sacks of grain to trade instead of lightweight sheets of paper or easy to carry coins. Since money was invented in small groups and not in big societies, it was relatively easy to make the change and have everyone agree on it.
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