“Money, it is conventional to argue, is a medium of exchange,
which has the advantage of eliminating inefficiencies of barter;
a unit of account which facilitates valuation and calculation;
and a store of value which allows economic transactions to be
conducted over long periods as well as geographical distances,”
writes Harvard historian Niall Ferguson in The Ascent of Money:
a Financial History of the World. For a long time, money was
embodied in precious metals like gold and silver. The earliest
known gold coins were produced in Lydia, in what is now Western
Turkey about 2500 years ago. But, with the introduction of
banknotes in seventh-century China, money started to decouple
from physical objects with intrinsic value. “Today . . . we
remain more or less content with paper money - not to mention
coins that are literally made from junk,” writes Professor
Ferguson. “ . . . we are happy with money we cannot even see.
Today’s electronic money can be moved from our employer, to our
bank account, to our favorit