The beginnings of credit economy may seem a little abstract in today’s world, where it seems that the concept of money has always been with us; we spend so much of our lives chasing money. We live in a technological society that has seemingly modified our habits; mobile phones are more powerful than computers, the internet, laptops, etc. These are concepts so internalised that they are part of our daily lives to a greater or lesser extent, yet it is still a problem for many to conceive that forms of payment and money change.
We could establish the beginnings of the credit economy in what many economic historians define as the evolution of economic relations, i.e. the passage from barter to an economy where money is used and then to a credit economy. Still, the reality is that this evolution turns out to be much less linear than it seems. For example, Postan has shown that credit was widely used in medieval times (although not in as developed a form today). By the 19th century, in France, the rural economy used to barter, the national economy used silver, while the international economy used bills of exchange.
Metal coins made their appearance as a medium of exchange, being the first face of money as we know it today. They had specific names depending on where they were minted, who or what was on them, and even why they were minted (as in the case of the cruzeiro, made for the Crusades).
The evolution of coins in the early days of the credit economy
Before the arrival of the curved edges in 1660, coins were rubbed, torn, worn by use and even adulterated to such an extent that they had to be weighed and checked before the recipient could accept them. In an attempt to give these coins a nominal value, banks and bureaux de change resorted to enclosing them in bags that were sewn together (once they had been tested and weighed), and the true amount was marked on the outside. The state representatives severely punished any alteration or misrepresentation of the money, which is the origin of the public good character of money. By 1975 in the Eastern Mediterranean, the term “purse” was used to refer to money, and this method of inserting coins after checking them continued to be used by the banks.
While it is true that silver was the standard for money throughout much of the medieval period, other metals such as copper and tin were also used. For example, in Spain, in the late 16th-century, copper was used to adulterating silver coins, a process known as “darkening” or “blackening”. Although gold coins were used in Roman times in Europe, they were not produced until 1252, specifically the coin of Genoa. But silver was undoubtedly the metal used in ordinary transactions until the end of the 18th century.
In the year 1550, most of the silver came from central Europe (Germany, Austria, Czechoslovakia). In Venice, it was shipped to the East to be exchanged for spices and other products and to Ghana moved in caravans to be exchanged for gold and then crossed the Sahara desert from north to south to exchange the gold for salt, which the Maghrebis supplied, as we can see this crossing was extremely complex and surrounded by endless dangers but extremely necessary as salt was vital in the preservation of meat.
Gold production in Europe was on a small scale in the early 13th century of one tonne and reached four tonnes between 1325 and 1385. This did not last long with the arrival of the Black Death, which hampered mining. By the 15th century, population growth was reactivated along with the economy, which created a new demand for means of payment. In honour of this expansion, barter was introduced even more as a means of exchange, using commodities, which clearly shows that when a market sees a lack of money for its needs, it must adopt the appropriate measures to correct these deficiencies.