Money And Interest Essay
Interest is generated as the outcome of transaction between borrowers and lenders, one of the earliest financial activities that have ever appeared in the human history. However, the functionality of interest is developed by the evolution of money, an idea that in fact appears later than interest. The modernization of money and interest has never taken a monotonous path: sometimes it breeds financial prosperity, but the next time it may bring catastrophe. As with fire, economists and policymakers throughout the history keep monitoring and intervening in money and interest, trying to grasp these tools but not get hurt. People interpret underlying signals sent by interest and use monetary policies to boost economics and avoid aberrations.
Past failures in the financial history have prove that the current understanding of money and interest needs further adjustments. Therefore, how do money, interest rates, and financial system really interact with each other? To answer that question, people had better delve back into the financial history and look for any remains from those ruins. This research is intended to make some contributions: the very financial and political environments demand the abstraction of money, and that development provokes revolutions of the nature of money and expression of interest, leading to stronger economic progress and more severe systematic threat at the same times.
The Birth: Calves as Interest
During the time of Mesopotamian…