Category Ask the Psychologist

The Pirates of the Caribbean movies portray buccaneer crews as likable bands of high-seas misfits, but real-life “freebooters” were ruthless thieves who relied on their cutthroat reputation to frighten ships into surrendering without a fight (after all, a ship plundered in one piece was worth more than a cannon-blasted wreck). No one knows who flew the first pirate flag, also known as the “Jolly Roger.” It was most likely a simple red or black strip of cloth hoisted above the ship’s tallest mast to send a message to merchant ships: “Surrender or we’ll sink you.” Pirates during the golden age of piracy (from the late 1600s to the early 1700s) decorated their flags with images of skeletons, swords, skulls and crossbones, drops of blood, and other scary symbols to instill as much fear as possible, turning their flags into weapons that messed with the merchant sailors’ minds.

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Paper currency – also known as notes or bills – didn’t appear until the ninth century in China, but it eventually became so common that it lost its value. Consequently, paper currency fell out of use for hundreds of years until it reappeared in 17th century Europe.

It can affect inflation, or the rate at which prices rise for goods and services. The more prices are inflated, the less purchasing power each paper note or coin holds. Inflation can cause all kinds of problems for an economy that doesn’t yet understand the concept; in general, monetary authorities endeavor to keep inflation to a minimum and avoid deflation entirely. Deflation is the opposite of inflation – the lowering of prices – and has a potential to lead to economic depressions if severe.

Checks, debit cards, credit cards, online banking, and smartphone payment technology have decreased the need for people to carry cash in any form.Paper currency – also known as notes or bills – didn’t appear until the ninth century in China, but it eventually became so common that it lost its value. Consequently, paper currency fell out of use for hundreds of years until it reappeared in 17th century Europe.

It can affect inflation, or the rate at which prices rise for goods and services. The more prices are inflated, the less purchasing power each paper note or coin holds. Inflation can cause all kinds of problems for an economy that doesn’t yet understand the concept; in general, monetary authorities endeavor to keep inflation to a minimum and avoid deflation entirely. Deflation is the opposite of inflation – the lowering of prices – and has a potential to lead to economic depressions if severe.

Checks, debit cards, credit cards, online banking, and smartphone payment technology have decreased the need for people to carry cash in any form.

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The first chunks of change you’d recognize as coins – round lumps of precious metals impressed with mages of gods and rulers – appeared around 700 B.C. in Lydia, in modern-day Turkey.

The first coins were made of electrum, an alloy of silver and gold. It appears that many early Lydian coins were minted by merchants as tokens to be used in trade transactions. The Lydian state also minted coins, most of the coins mentioning king Alyattes of Lydia. 

In China, gold coins were first standardized during the Qin dynasty. After the fall of the Qin dynasty, the Han emperors added two other legal tenders: silver coins and “deerskin notes”, a predecessor of paper currency which was a Chinese invention.

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Around the year 1200 B.C., people in China started using mollusk shells called cowries to trade for goods. Cowries became the world’s first form of currency, and they were adopted by civilizations across the world and used until the middle of the 20th century.

Some form of shell money appears to have been found on almost every continent populated by humans: America, Asia, Africa and Australia. The shell most widely used worldwide as currency was the shell of Cypraea Moneta, the money cowry. This species is most abundant in the Indian Ocean, and was collected in the Maldive Islands, in Sri Lanka, along the Malabar coast, in Borneo and on other East Indian islands, and in various parts of the African coast from Ras Hafun to Mozambique. Cowry shell money was an important part of the trade networks of Africa, South Asia, and East Asia.

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They didn’t buy – they bartered! Tens of thousands of years ago, when humans began establishing villages and farms rather than following herds of animals, they traded for what they needed: animal furs for vegetables, plant seeds for fish, arrowheads for farming tools, grain and candle wax for goats and cows.

Phoenicians bartered goods to those located in various other cities across oceans. Babylonian’s also developed an improved bartering system. Goods were exchanged for food, tea, weapons, and spices. At times, human skulls were used as well. Salt was another popular item exchanged. Salt was so valuable that Roman soldiers’ salaries were paid with it. In the Middle Ages, Europeans traveled around the globe to barter crafts and furs in exchange for silks and perfumes. Colonial Americans exchanged musket balls, deer skins, and wheat. When money was invented, bartering did not end, it become more organized.

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Because it buys about everything we need to survive: food, homes, gas for our cars, electricity, heat, water, and cookies-and-cream milk shakes. People invest money in stocks, bank savings plans, property, and their education to eventually make more money.

The importance of money becomes very clear when a person has no money, Money for a poor person is everything, it becomes very important for him to earn so that he can fulfill his basic needs. However, recently everyone has become consumption oriented. We want to buy anything that is new on the market and catches our interest and we are falling prey to the attractive packaging and advertisements of a product. Thus we buy things that we have little need for which in turn makes us want more money. Money enables us to afford a better quality of life; more money means bigger and better houses and cars, better quality products, better entertainment etc. Another advantage is less stress in paying bills and other household expenses. Money may also allow a person to pursue his dreams, for example a person who wants to attain higher education may not be able to without money. 

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