Money is a very critical invention of mankind
which was designed to provide a method by which
one could exchange it for desired products and
Prior to the invention of money, a
system was in practice known as bartering.
example of bartering is for instance if you have a
cow I want, I could sit down with you and offer
you something I own in exchange for the cow. It is
possible that if I owned other livestock I could
offer you several chickens or a hog in exchange
for your cow. If we reach an agreement under the
barter system to obtain your cow, I would
whatever items of mine you felt to be the true
worth of your cow and compensated you. In order
to make your decision about the true worth of your
cow you should take into consideration many
factors about the cow including those related to
how much work you have already invested in the
raising of the cow. Other factors might include:
How old is the cow? Do you really want to sell
the cow now? What are other cows just like your
cow and as healthy as your cow worth?
barter system works really well in a small village
but could become extremely complicated to operate
if there were language and fair exchange policies
to consider. Money was invented as an attempt to
remedy this situation by providing a somewhat
level playing field.
The worth of a peso in
reference to a dollar is easily calculated and is
referred to as an exchange rate. Banks and
government institutions establish, regulate and
monitor the exchange rate in every country in the
world. So, if a cow is worth 10,000 pesos in
Paraguay, the value in dollars in the United
States can be immediately calculated.
previously mentioned, the amount of work put into
a commodity is a large part of what must be
considered if the item is to be sold. A robust
cow raised by an industrious and dedicated farmer
will probably be healthier and bring a much higher
price than a thin cow raised by a lazy farmer.
Hard work is believed to be the key to having more
money to purchase goods. This is known as the
"work ethic". An individual who has a high
ethic is viewed by society as productive because
he works hard and is motivated by both the desire
to do a good job and receive money for his
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