Ben Franklin had some very wise ideas about money:
- Remember that time is money.
- Early to bed and early to rise makes a man health, wealthy, and wise.
- There are three faithful friends–an old wife, an old dog, and ready money.
- No nation was ever ruined by trade.
- In this world nothing is certain but death and taxes.
In his 1729 pamphlet, “A Modest Inquiry into the Nature and Necessity of a Paper Currency,” Franklin suggests that the colony of Pennsylvania continue issuing paper money to expand construction, facilitate trade, buoy employment and increase the population. Agreeing, the Pennsylvania legislature then hired Franklin to print their currency. When he printed money for New Jersey, Franklin developed casts that transferred a tough to counterfeit leaf image onto a bill. Years later, he proposed a paper money plan to fund the Revolution but Congress rejected it.
Where does this leave us?
According to anthropologist Jack Weatherford, during 25 centuries, money has gone through 3 dominant phases. For commodity money we could look at how the Aztecs exchanged chocolate even for costly purchases that required as many as 24,000 cacao beans. Almonds functioned as money in parts of India, corn in Guatamala, and Nicobar Islands inhabitants used coconuts. After commodity money, paper was dominant and now, electronic currency.
How can commodities, paper rectangles and electronic entries all function as money? Because they are a medium of exchange, a measure of value and they can store value.
Sources and resources: Brief, fascinating and accessible, this essay on Ben Franklin and paper money from the Philadelphia Fed is a good starting point for understanding money as is Jack Weatherford’s The History of Money. Both provide insight that we can keep in mind when we see someone paying for a latte with a phone click.