Money Matters

British Museum

Supported by Citi

Money Matters
For thousands of years money has been a constant in society. This exhibition explores economic concepts, money as an object and how the financial world affects our everyday lives. The central sculpture, 'Fiat Coin' was comissioned for the exhibition by student artist Olga Bagaeva. The work explores the nature of money from our personal interactions with commercial banks and their products, to the abstract, distant mechanism of investment banks, hedge funds, data centres and regulating authorities. More information can be found at fiatcoin.uk

The way in which money flows around the economy is complex. The MONIAC machine (Monetary National Income Analogue Computer) uses a water pump and a series of plastic tanks, transparent tubes and wheels to show money – represented as water – flowing through the financial system.

The MONIAC, an early hydraulic analogue computer, was invented in 1949 by economist Bill Phillips (1914–1975). Philips was excited by the MONIAC’s ability to demonstrate economic theories in a straightforward way.

Students have worked with the Museum and used photographs to explore how money is being spent, or not spent, within their local area.

In economics, ‘utility’ refers to the satisfaction or personal gain that is achieved when a product or service is consumed. At a regional level, local authorities have to make difficult decisions prioritising spending to ensure the utility is maximized for society.

Our use of the word ‘money’ is changing. It is increasingly being used to indicate a particular quality or attribute. For example a ‘money player’ is a sports person who increases their performance at the crucial time. A ‘money quote’ is the part of a speech that will be most heavily reported.
Not only is the use of the word changing, but the words that are used interchangeably with ‘money’ are also evolving. Young people from New Horizon Youth Centre have worked with the Museum to explore some of the words that are used today as terms for money.

Currency Creation
Money, as a physical medium of exchange, has taken many different forms. Production has not always been the sole preserve of a central, governing authority. There have been numerous examples of both official and unofficial money creation.

Although stylistically distinct from one another, this Chinese spade money and the Lydian electrum coin that follows are early examples of coinage and were made during a similar period. Their creation suggests the need in society for a standardised, tradable means of exchange.

This paper money, issued by social reformer Robert Owen, is an example of one of the many ways value has been quantified throughout history. The note, issued in the 1830s from the Equitable Labor Exchange, is measured in the time it took to manufacture goods.

Cryptocurrencies like ‘Bitcoin’ are ‘mined’ using computers to complete complex mathematical problems. When successfully completed, the system rewards the user with Bitcoin currency. The complexity of this mining process ensures Bitcoins are produced in limited numbers and at a predictable rate.

The creation of a currency can be part of a larger social or political movement. The Brixton pound, launched in 2009, can only be traded with affiliated independent retailers in an attempt to support smaller businesses against larger national and international companies.

Currency Union   
Different currencies have been traded across borders and continents formally and informally for thousands of years. The creation of a formal currency union is a powerful economic and political tool. Currency exchange is a significant element of the modern financial system, with the strength of national currency being a key indicator of a nation’s prosperity.

This merchant’s handbook from the 1500s, complete with detailed illustrations and inscriptions, aided merchants in identifying currencies from many states across Europe. This helped traders better understand the different values of each currency and how these related to one another.

This 20 franc coin was issued in France in 1866, a year after the creation of the Latin Monetary Union. Its central aim was to encourage trade by unifying the currencies of France, Switzerland, Italy and Belgium. Whilst national currency names were kept, coins were issued with the same weight and fineness. Greece joined the Latin Monetary Union (LMU) in 1867. Other countries including Romania and Spain followed the LMU standard without officially being part of the union. By the First World War the union had ceased to function and was officially dissolved in 1927.

Currency Confidence 
The general public’s trust in currency is vital to any functioning monetary system, however this can sometimes be undermined. Attempts at destabilising an economy through currency manipulation can be a very potent political weapon. 

The actions of an issuing authority can undermine public confidence in their own currency. During a period known as the ‘Great Debasement’ King Henry VIII significantly reduced the amount of silver in the coinage to pay for costly wars with France and his lavish personal spending. The effect of this debasement is clearly evident when you compare this fine silver groat with the coin that follows, minted some twenty years later.

The appearance and feel of money can be central to an individual’s willingness to accept it. This hand drawn counterfeit banknote attempted to replicate a printed Swedish 10 riksdaler note. It must have taken a significant amount of time and effort to produce.

Banking
The role of banks has been fundamental to many economies for thousands of years. The services offered have ranged from making loans at interest and exchanging currencies, to investing the money deposited by customers. Today commercial banks create 97% of the money in the financial system. 

Roman bankers (Argentarii) offered a range of financial services. Merchant bankers provided finance to buy stock, while Nummularii worked at market tables changing money, taking deposits and making loans. The less wealthy would go to moneylenders to access loans, at a much higher cost.

Today online personal banking is the most popular way to bank in Britain. ‘Homelink’, released in 1983, was the UK’s first ‘online’ banking service and allowed customers to check their account balance, have loans approved and shop using a dial up service.

Assets
An asset is an item of value. The assets that people choose to invest in can give an indication as to what a society thinks is important. Assets owned by either a company or individual give an indication of their financial security and may be liable for the payment of debts. 

Many individuals choose to invest in a company’s shares in the hope that they will benefit from any profits that company might make. These investments are always made at personal risk. In 1866 the bank Overend, Gurney & Company failed, with shareholders making substantial losses.

One of the most apparent and sought after assets is a home. This print’s title, 'Villa Hypothekenlust' translates as ‘Mortgage Joy’ and was designed as a greetings card to be given to new homeowners.

Globalisation
At its heart globalisation is about the reach and influence of businesses and organisations that operate on an international scale, with money being central to this process. Some view globalisation as having a negative effect on society, including the erosion of cultural diversity. The question of when globalisation first began is much debated by economic historians.      

This medal commemorates the centenary of the formation of the Dutch East India Company (VOC) in 1602. Arguably the world’s first multinational company and the first to issue stock, the VOC was created to challenge Portuguese dominance in the global spice trade.

The growth of the Spanish empire from the 1500s saw the creation of the world’s first global currency and truly international trading networks. This Spanish 8 reales coin, minted in Mexico, has stamps – known as countermarks – approving it for use on the Isle of Bute in Scotland and then latterly in China.

Inflation
Inflation is the process whereby prices rise for a sustained period of time as the purchasing power of a currency reduces. It can have both positive and negative effects on an economy. Hyperinflation is caused when the rate of inflation increases rapidly and can result in massive financial instability.        

Inflation has to be carefully monitored and controlled. This leaflet, parodying a banknote, was issued by the Party for Freedom and Progress in 1963. It criticised the Belgian prime minister, Theo Lefevre (1914–1973). The note drew attention to the fact that since 1961 the 1000 franc note had lost 15% of its value.

Debt
Debt is the money or property owed by a person or organisation to another. Debt is invariably spoken of in negative terms but it is fundamental to the history of money. Debt is a powerful monetary and political concept and is at the heart of the economy on global, national and individual levels.

Financial systems rely on legal proof of debt and its repayment. This papyrus gives notice to the courts of a loan to a woman named Teteoris. The loan was financed by M. Longinus Castresius, whose names denote his elite status of Roman citizenship. It is crossed out to show repayment.

Tax
Tax is the principle means by which a government finances expenditure. There are many different types of taxation, often levied against income or added to the price of good and services. Whilst taxation funds the provision of vital services in society it can be a highly contentious issue.

On this paper money a tax official is shown asking Deutscher Michel (the personification of Germany) for money. The message reads, ‘The money must be taken from the people, you can't shake it from the trees.’ The role of the state in the levying and collection of taxes is central to the public’s relationship with government.

Some taxes can be very specific and are introduced with a particular goal in mind. In the late 1600s, in an attempt to modernise Russian society and discourage the growing of facial hair, Peter the Great introduced a beard tax. Those who wished to grow a beard were taxed and given this token as proof of payment.

Credits: Story

This exhibition is based on Money Matters which was at the British Museum 3 June–9 October 2016

Supported by Citi

More information about the exhibition can be found on the British Museum website.

Created by Ben Alsop and Mieka Harris

Credits: All media
The story featured may in some cases have been created by an independent third party and may not always represent the views of the institutions, listed below, who have supplied the content.
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