Kerby Anderson

Each day we use some form of money, but we rarely think about the key attributes of money that make it work in our daily financial transactions. In my booklet on a Biblical View of Money, I explain that scarcity is one of the most important aspects of money as a medium of exchange. We can see this by looking at other forms of money used in the past. Money originally took the form of stones, beads, and shells. Cattle and agricultural produce might have been seen as forms of money, but they would only work in a barter system and could not be divided or stored the way money can be used. The Rai stones on Yap Island were large circular stones carved from limestone. They were brought from the neighboring island and difficult to procure (mine and transport). That changed when David O’Keefe was shipwrecked on the island. He realized that he could go to another island and using modern tools and transportation could increase his supply of the stones. This ultimately led to the demise of these stones as money. In western Africa, special beads were used as money for centuries. They were precious because glassmaking technology was expensive and not very common. Their limited supply made the beads sound money until European explorers visited the region. Once they began to import vast quantities of glass beads from Europe, the value of this form of money collapsed. Seashells were another form of money around the world. They also suffered the same fate when advanced technology and boats flooded the market. There is a lesson for us today. The money supply in America has been increased by more than a third in just the last year or two. The dollars in your wallet or purse are worth less than a year ago and will be worth even less in the future. This is the unfortunate lesson of the history of money.