There is nothing more integral to the human experience than trade. For most of homo sapiens' past--in foraging/hunting bands and then in small agricultural settlements--trade largely consisted of direct barter. You have something I want and I have something you want. Let's make a deal (incidentally, the title of next week's discussion on trade).
But as societies grew larger and more complex--and with that, many more kinds of goods and services--direct barter became increasingly cumbersome, for two reasons. There was the obvious "matching" problem. Barter required you find the exact right person who wanted what you had and had what you wanted. Then, there was the "value" problem. Say you grew apples and wanted to buy a pair of shoes or get a haircut. How many apples was each worth, how many haircuts, how many shoes? To cut through this confusion, a common medium of exchange was required, something everybody would accept. The earliest forms of money, from Sumer (see above) about 3,000 BCE, consisted of barley, measured out in standard-sized cups, known as silas (see inset above). But barley was awkward to transport and perishable. It was soon replaced by bars of metal, known as shekels, which had intrinsic value. The next development in the history of money came with coins (see inset left below), first minted in the Greek kingdom of Lydia in the middle of the first millennium BCE. The worth of these coins was not in the metal they contained but in the fact that they were deemed of certain value by a government. Roughly 1,500 years later came paper money (see inset right below), first introduced by the Song Dynasty of China in the late first millennium CE. Known as jiaozi, paper money was an even more abstractly-valued medium of exchange than coins. The medieval Venetian traveler Marco Polo marveled that everyone in China accepted something so fragile and of seemingly little worth.