Money – general purchasing power over goods – is surely among the most remarkable products of human civilization. Without it, the incredibly complex division of labor that provides us with the highest standard of living in human history would be unthinkable. I propose in this book to make the workings of the increasingly sophisticated and complex monetary system that is an integral part of our modern economy somewhat more comprehensible. That task can be made a bit less daunting if we follow J. R. Hicks's advice and begin by trying to understand the forces that determined the early evolution of money and banking. Once we understand those forces, we shall have gone a long way toward understanding more recent monetary developments.

From the earliest times, thinkers have been perplexed by this peculiar artifact of civilization. Although no one doubts the usefulness of money, why people began using money in the first instance is not at all obvious.