ABSTRACT
This chapter explores modern money and the consequences of system for the present and future of our economies and societies. It argues that there is no historical evidence for money emerging out of barter. For metallists the origin of money and the coining of gold would be intertwined and the history of money dated no earlier than about 700 bc, when the first coins were minted with electrum in Lydia. The first and most common theory of money's origin is the theoretical claim that money emerged from barter economies. Payment of money was meant to stop blood feuds from getting out of control. The most common explanation was the fractional reserve theory, which argued that while banks could not individually increase the money supply, the banking system as whole could increase the overall supply of money. The credit creation theory was marginalized by the rise of mainstream neoclassical economics.
