Money can be any object that people believe is valuable. That's the important bit. What made all these wildly different things acceptable as money was that they were all an agreed and recognised means of payment.      This also applies to the invisible money that is stored in bank computer records which, even though you can't see it or touch it, can be used to buy things in the same way as any other form of money.      In other words, very simply, money is an idea.

BORN TO SHOP      But how did the idea of money come about? No one really knows, but there is little doubt that people learned to count before they could read and write, and the use of money was widespread long before written history.      It is also clear that the idea of money was invented out of necessity. As the early settlements developed and people had more and more valuable goods and skills to exchange, basic swapping could be quite complicated.      Just imagine, if you had a spare sheep and really wanted, say, the very latest in loincloths, it could take you a very long time to find someone with the trendiest loincloths who actually wanted one of your sheep.

The original idea of money was marvellously simple. It worked! It was the best thing before sliced bread. It was a genuine means to an end, and that end was to simplify the day-to-day distribution and exchange of all the things that people really needed or otherwise considered worth having.      VALUE FOR MONEY      A commodity is something of use or advantage to mankind and, therefore, something of value. Since money was invented to make the exchange of commodities easier, it naturally follows that money would soon become valuable in itself – and no longer the simple go-between it once was.      Thanks to money, every commodity now has a price – the cost in money of something of value – and prices have always depended on supply and demand, and so has the value of money.

THE AGE-OLD DOUBLE-ACT – SUPPLY AND DEMAND      Supply is what we make or do, and demand is what we need or want. For example, if something is scarce – like food after a bad harvest – then prices will be high, because everybody needs food.

If, however, someone is daft enough to make a vast quantity of unbreakable pots, pretty soon the price of those pots will go down – because no one needs to replace them.

It is the same with basic money. Too much gold or silver – and too few commodities in the market place – can also mean the prices of goods and services going up, or, being able to buy less for your money – high prices.      On the other hand, plenty of goods for sale and too little money – and the precious metal would be more valuable – you could buy more for your money – low prices. So the value of money also depends on its own supply and demand.

The demand for money is obvious – everybody needs it to buy the things they want. But who supplies it? Where does it come from? Wealthy people? People who control the money supply? Where do they get it from?      If we go back to the first principles, someone must have owned something of value that someone else wanted and got given some money for it in exchange.      The money could then be used to produce even more goods – and provided there was still a demand, they could make even more money. Then, perhaps, someone with an army came along and stole all the money from them – who knows? Great wealth has been sloshing around the place for thousands of years – passing from one empire to another as each in turn saw its own rise and fall.

HOLDING THE PURSE STRINGS      Money came to be used as a measure of the value of other things, but it is quite important to remember that, at first, money could be anything so long as people believed it was worth having.

Well, having said that money could be anything, obviously it could not grow on trees for any casual passer-by to pick at random, so the first governments, or Tribal Chiefs, Kings, Pharaohs, Nabobs, whoever, had to decide what was valuable and then control the money supply – usually by collaring most of it for themselves!      As long ago as 4000 BC, more or less everybody using money agreed that the metals, silver, gold, and copper – in that order – were the most valuable.      Soon after, small amounts of the precious metals were accurately weighed and used as money. Coins with the official stamp or, more often, the portrait, of Rulers, came much later.

As time went by, more and more people began to want money for its own sake – for the power, status, influence, and of course, security that having lots of it gave them over people without it.      Controlling the money supply was, and still is, the most important job in any society or civilization. But surely, it's not just the money that people are after, it's what the money can buy that we really want. Either way, the idea or money seems to be here to stay. Can you imagine a world without it?