The World's First Paper Currency: Ancient China

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This is part 1 of the series but each video can be viewed on its own.

Where did paper money come from? Despite it seeming like a modern invention, its origins go back to Ancient China. And, despite it now being hard to think of a world without paper money, in 1968, Americans could still redeem their U.S. bills for silver, and international residents could convert their U.S. dollar bills into gold up until 1971. What led to the invention of paper money and the fiat standard where money has value because government says so? These videos will examine how paper money developed in ancient times.

We have a 5 part series with a video to be released each week: this current video will go through the evolution of paper money in Ancient China. The Chinese were more advanced than Europe at the year 0 AD, and the Chinese invented paper by 100 BC, but they would still use a copper currency for a while. However, the powerful Chinese rulers had an issue: the country was very large and copper coins were numerous and heavy. Eventually, the inconvenience of transferring paper money led China to issue paper receipts, leading to paper money. Some speculate that the Chinese had a more advanced view of money and were able to abstract the concept of money. However, this is not proven.

Once the genie was out of the bottle, Chinese rulers struggled to not over-issue paper money. Unfortunately, each over issuance led to the collapse of currency after currency.

However, China did not have the same type of currency collapse after the Ming Dynasty banned the usage of paper money in 1450. However, the Chinese economy was “frozen in time” for many years. In addition, it was described that even beggars in 19th century China carried around scissors and a scale to measure silver—this is not an efficient way to do business. The Chinese traded the growth of the economy under paper money for the stability of silver.

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Hey Guys, we hope you enjoy our new series going through the origins of paper money. This series has 5 discrete parts so each part can be viewed on their own. The next part will be on Paper Money in Medieval Europe.

TheMarketisOpen

Very interesting and informative. I like a good history lesson with current relevance. Also, this page's graphics get better with every video!

naomiable

You forgot to include the great Chinese ship-building project inspired by Emperor Zhu-De (I forget the spelling) after the visit by Marco Polo that was financed with paper money. The Chinese were far more civilized than the Romans. They sought to 1. map the world 2. explore the world and assess its populations and civilizations. 3. Establish peaceful and productive trade relationhships with other civilizations before the "White Man's World" beat them to it. The shipbuilding project was something like our Apollo Project on steroids. It produced a fleet of something like 400 gigantic junks that were far larger and more sophisticated than anything known in the West. Chinese science was far ahead of the rest of the world, and they had advanced map-making and navigation technologies. The ships explored and mapped the world during a period of "global warming" during the early 1400's and even attempted to establish Chinese colonies in North and South America. The project initially brought prosperity to China, but when the ship-building project was complete, : they quit printing money. This caused a horrific deflationary depression that convinced the second-tier ruling elites of China to curb the power of the Emperor, forget about the rest of the world, and avoid paper money thereafter. As a result, China entered a prolonged period of economic and technological decline. Meanwhile Europeans learned of paper money courtesy of Marco Polo, and paper money fueled the recovery of European economic activity and technology. English banksters discovered "central banking" ---perhaps the greatest racket ever invented---and used it to create the British/Zionist Anglo-American Empire. There ensued a struggle between the Chinese, who eschewed paper money, and the English, who had mastered its manipulation. The Chinese came very close to establishing a libertarian, free-market economy using silver money, but the English used opium to rob them of their silver, and cripple them economically and militarily. Ultimately the West gained political control of China. That was the significance of Nixon's visit to Mao Tse-Tung in the 1970's. How about a revised program that incorporates the significance of this great Chinese project to explore the world?

thestresstheoryofhansselye

Great video! Love these series on currency and gold. Looking forward to the next one!

tomtrish

"Antoninianus, which worked as well as it sounds" bahaha

Andrewk

No, the Chinese did not say the Romans were backwards. They actually viewed the Romans as equals, if not better than the Chinese themselves (You will see why below). In the Book of Later Han (後漢書), a chronicle written by Chinese historians in the 5th century AD describing China during Han dynasty (around 200 BC~200 AD), in one of the chapters concerning foreign affairs they mentioned Rome as such:

"Their kings are not permanent, they always elect the most capable and moral ones [to be their kings]. When there are disasters in the country, they depose their kings and elect new ones, the deposed kings gracefully accept their removals and never complained. Their people are tall, big, just and fair, much like our China, therefore we call them Great China."

(original text of 'Great China' were written as 'Da Qin' (大秦), 'Da'(大) means 'great' in Chinese while 'Qin'(秦) was the first dynasty that unified China so it's sometimes used as an alternative name for China by the Chinese. Now, why would the Chinese call Rome, a distant civilization which they never met 'Great China'? Apparently because the Chinese thought very highly of the Romans. Well, why not just call them 'Another China' if the Chinese just thought the Romans were similar to them but it had to be 'Great China'? You tell me, could it be that the Chinese regarded the Romans so highly that 'Another China' couldn't cut it, but Rome was actually a 'Great China' which meant it's China but better?)

Original text from the Book of Later Han below (If you doubt the integrity of my comment, you can always ask whoever you get your source from to translate it to see if it's accurate, it's written in Classical Chinese, mind you, so you will need someone who is fairly well educated in both English and Classical Chinese to do it.)

So was it a fanciful and mostly utopian account of Rome? Maybe. Did the Chinese view Romans as backwards? Definitely not.

terranrepublic

So non inflationary currency stagnates economic growth as demonstrated by China ~1400 - 1900. And inflationary currency is short lived but stimulates short term growth.

jacocoetzee

Are you sure you’re not just describing our money troubles

carknower

"The chinese viewed the romans as primitive"
The chinese and the romans knew almost nothing about each other. They had some notion of how rome worked and only knew it by reputation, which was obviously great. Although rome was never successful in conquering parthia or persia, they were respected as the potency they were.
So I would very much like to see evidence of the Chinese regarding romans as primitives. Unless it is in the sense that they regarded any non chinese culture as primitive, much like the greeks at one time.

Alkis

So cool I learned so much tysm bro I love ur videos :D

BlizardOnYT

This was a really great, informative video. Good job!

fidmid

Jade is very common as a status symbol in china. Chinese women love those jade bands.

jileel

This was a very good video for my class! Thank you😌

That_Goiky_Gowrl

In Vietnam, we also have a period where paper money is available. About 1396, near the end of Trần's Dynasty, and last until the Ming Occupation some years later.

Kazevn

Metallic standards artifically limit economic activity to those who arbitrarily possess the chosen ores... hence the Spanish wastefully subjugated vast swathes of the Americas just to attain them... causing an overall decline in productive economic activity. Milton Friedman's focus on supply in circulation was not based on empirical research. Under his influence, the Federal Reserve was prompted to track quantities of M1, M2, etc. in general circulation... until it was found that these volumes had no predictive value on price levels or inflationary tendencies and they discontinued the publication of such statistics.

netizencapet