It's very interesting to know the history of the money. Never did I realized that cigarette were used to trade with valuable things.
Link: https://sg.finance.yahoo.com/news/5-types-alternative-money-more-000026616.html
Few people in
Singapore are ready to accept, or understand the concept of, money that
differs from our trusted Singapore Dollar (SGD) notes. Recently various
forms of digital money have hit the international market, and some have
been finding its way into the country.
While not threatening to replace traditional paper money right now,
digital currencies such as Bitcoins continue to gain recognition and
favour. Mostly because of the complex structure of the way digital
currencies work, and our paranoia that it can be hacked into, most of us
still feel more secure hanging onto our paper notes.
However, the case of Bitcoin proves the world is readying for a move
away from mainstream currency. And if you think a little harder about
it, you are actually just holding on to a stack of paper that has no
intrinsic value in the first place. And the only reason you feel more
secure holding it is because society is willing to accept it as a form
of payment.
Throughout history, money has always existed in various forms. We are
not suggesting that Singapore should revert to these methods, but here
are some interesting commodity monies that have been used in the past.
Gold is the most common type of commodity money and the most easily
understood as well, even by people who have no understanding of
economics. Throughout history, gold has always held value.
Interestingly, the US dollar was held against “The Gold Standard” in the past where its value was literally measured against the gold reserves USA had.
There are some properties of gold that make it suitable as commodity
money. Firstly, you are able to store it for a really long time without
worrying if it will rust, expire or start breaking down. Secondly, it is
rather portable. For example, gold coins can easily be carried around
and used as payment for purchase of goods or services.
Gold does have some intrinsic value as a commodity as well since it
is used extensively for jewellery and electronics parts. In uncertain
times, when people do not trust the Government or the monetary system,
gold as a form of payment might be preferred to the local currency, as
evidenced by its meteric rise since the last financial crisis. More
importantly, the government cannot create gold whereas the local
currency can be printed at their whim.
This may sound strange but cigarettes, as a form of money, is rather popular during wartime especially in POW camps.
Cigarettes become popular in circumstances where the value of money
is absent. Soldiers in war have no use for money when it is unable to
buy them anything of comfort or purpose. However with cigarettes,
soldiers can actually establish an economic system where the non-smokers
exchange their cigarettes entitlements with smokers who want to smoke
more.
Due to this, cigarettes can be used as a form of currency. Extra
cigarettes you have can be used to buy items that you want. Items that
you do not want can be sold for more cigarettes. Exchange between
willing buyers and sellers of goods can easily be brokered by the use of
ciagrettes with little inconvenience.
In fact, cigarettes are so convenient that some POW camps in WW2 only accepted cigarettes as a form of payment.
The Asian love affair – it comes as no surprise then that in the early 17th century, rice was considered the main currency in Japan.
In those days, when life was all about being able to fill your
stomach and surviving through the winter, getting your salary paid in
the form of rice actually made the most sense. A hardworking individual
whose family has excess rice can also use it to buy other goods that he
requires.
If you still find this unbelievable, think about this hypothetical
scenario. If Singapore is at war and food quantity is limited. Would you
rather have a billion SGD in notes or a sack of rice to feed your
family?
During the Roman Empire, one ways soldiers were paid for their services was in the form of salt. Aside from being used as a type of seasoning or preservative, which does give it some intrinsic value, the Roman soldiers did have some intelligent economic concepts in mind when they asked to be paid in salt.
During time of war whereby there is always a shortage of supply and excess in demand, significant inflation will be present.
Rather than be paid in Denarius (a type of silver coin) only to see their purchasing power be eroded by inflation after the war, soldiers would rather be paid in commodity such as salt, which tracked inflation effectively. And because salt is able last for a really long time, the value of it did not detoriate.
Likewise, perhaps Singaporeans should request to be paid via HDB flats?
5. Shell Money
Some sort of shell money has been in use, at one point or another, in
every continent on Earth. In fact, some African nations were still
using it as legal tender until the early 20th century.
The commodity value of shells lies in its ability to be used as a
decorative ornament. It is also able to last for a long time, thus
retaining its value for a long time. The shells were also intricately
designed and very hard to forge, one of the reasons why the Cowrie Shell
was used by more people, over a greater geographic region and over a
longer period of time than precious metals have been used as money. It
is also interesting to note that at one point in history, only a fool
would have give up a Cowrie Shell for a gold piece.
The shells have also worked its way into our pop culture; the notes
and coins that appear on SpongeBob SquarePants depict shells.
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