The Evolution of Currency

Money accomplishes today the same thing it has always achieved throughout history -- it enables people to communicate value.

We use money to perform economic calculation. In other words, money enables each of us to determine our own subjective view of value, which we then communicate through 'prices' in our commercial interactions with each other as we pursue in the marketplace our needs and wants. This process describes the essence of a free-market economy.

To complete our market transactions we use currency, which can take many different forms. Paper money, coins, checks and credit cards are several common types of currency, which has evolved over time because of technological advancements. I explain this process of evolution in a November 2004 paper, "The Evolution of Currency", that I wrote for the Journal of Financial Transformation of the Capco Institute.