From Barter to Money

0:00How did people trade before there was money?

0:03Long ago, people often traded by swapping goods directly, which is called barter.

0:09A swap works only if each person wants what the other has.

0:14But this potter wants fish, not grain, so there is no deal.

0:19Money solves this problem, because people agree to accept it in exchange for goods.

0:25By about 2500 BCE, people in Mesopotamia often paid with silver.

0:32The silver was weighed on scales, in units called shekels.

0:36The potter takes the silver, because silver can buy fish later.

0:41But weighing silver for every trade was slow.

0:45In Lydia, about 600 BCE, people made some of the first coins.

0:51Each coin had a set weight, marked with a stamp such as a lion's head.

0:57So people could simply count coins instead of weighing silver.

1:01Money made trade easier than barter, because people accept it for almost anything.