![]() ![]() In this sense, any property can be used as a means of payment. However, the most common way of making non-cash payments was to set the price in currency and indicate the payment “in rem valentem” or in “res valentes”, which may or may not be stated (“bove uno valente”). They are a partial monetary equivalent, even with a certain gradation according to the value of the goods being purchased, from an ox or a horse for large payments to a measure of wheat, a sheep, or a pound of wax for medium-sized payments, or a loaf of bread for small payments. The next step up from barter is payment through certain goods that function as standard currency in a certain society, without any mention of price. 10 In fact, the words “sale” or “price” often appear in documents in which a benefit or good is exchanged for another benefit or good. 9 Often a good is exchanged for a jumble of miscellaneous commodities, which indicates an estimated value, next to a price valuation: “six measures of grain, bedding, a tunic or shirt, two rams, four cheeses”. 7īarter, which is considered the simplest form of exchange, appeared in the first centuries of the Middle Ages in marginal areas, 8 but was clearly influenced by the notion of currency, as David Graeber argues that all exchange is ultimately barter. Since the beginning of the 5th century, the economy of Western Europe had entered a state of economic and monetary prostration, with limited exchanges and poor circulation of currency 6 however, the concepts of currency and price were always present, although at some times and places reduced to a minimum. The diversity of local and foreign coins circulating in a given territory explains the need for money of account. ![]() Coins circulated with few restrictions outside the territory of the issuing authority. 4 Only when the legal value significantly exceeded the intrinsic value did a separate market value appear, which tended to reduce the difference between the other two. The legal value was almost always higher than the intrinsic value, due to the costs of coining (“brassage”) and also to the fee that the minting authority levied on coins for its own benefit (“seigniorage”). Each coin had three currency values – the intrinsic value of the metal coined the legal value that was attributed by the issuing authority and the market value – although as a general rule the three values differed little. The value of each coin depended on the sort of metal used and the known parameters of weight standard, number of coins struck, and fineness. There were large differences in the availability and the temporal, spatial, and social distribution of the currency. The noble metals (silver and gold), the basis of the medieval monetary systems, were almost always insufficient to meet the needs of the demand for currency. The main features to keep in mind to understand the functioning and the evolution of medieval currency are: 2 General Characteristics of Medieval Money In addition, the concept of money could take the form of money of account, with no physical existence in such cases it was only a unit of value, useful for counting or accounting but not used directly as a medium of exchange or saving. It could be issued either by the local authority or an external one it could be current or old it could consist of specimens in good or bad condition and might even extend to counterfeit or false money (as long as the deception was not discovered) or pieces which were worn or damaged. The objects used as currency have varied throughout space and time, but they can be reduced to two classes: goods that have intrinsic value (real currency) and symbols (shells, stones, printed paper, pieces of metal), whose intrinsic value is lower than their value as currency, so they receive the name of fiduciary money.Īlthough as we will see there are other types of effective currency, in the Middle Ages its most common form was coined currency. I think that to these should be added a fourth function: to be an instrument of business through credit. Under this double form, money meets the three functions that are considered basic for its characterization and definition: to be a unit of account, a means of exchange (currency), and a store of value. The concept of money from a logical point of view must precede any physical monetary reality, but to be fully effective, to be able to act, money as a concept must be brought to life through its materialization in an object that the community accepts as money. Money is in essence a concept, an abstract unit of value that is used as a universal equivalent to compare any good or service with all others.
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