CHAPTER 4: The Biblical Genesis of Money


We discovered in The Biblical Genesis of Trade that interpersonal exchanges developed as a result of the God-given differences between people and the scarcity of resources (including the scarcity and skill-limitations of labor). Moreover, as trade increased and developed, society as a whole prospered. Now let’s learn how both trade AND society benefited from the discovery of “money” as an intermediary medium of exchange.

Trade Made More Efficient

As we just learned in Civilization Emerges, details are meager within the Scriptures regarding how economic development progressed beyond what we covered within The Biblical Genesis of Trade until the Genesis account progresses to discuss the populations after the flood. Again, the Bible’s account also describes cities and major cooperative projects emerging, such as the Tower of Babel project in chapter eleven. Thus, we can easily conclude that trade had become more highly developed and efficient, for human history and experience reveals that such huge construction projects would be unfeasible without mutually beneficial exchanges taking place regularly within society.

By Genesis chapter twelve we discover (and confirm) that trade soon grew robust and efficient, as we are informed:

Abram was seventy-five years old when he set out from Haran. He took his wife Sarai, his nephew Lot, all the possessions they had accumulated and the people they had acquired in Haran, and they set out for the land of Canaan, and they arrived there.

(Genesis 2:4-5, NIV)

Note that Abram (later to be renamed, Abraham) and Lot had “acquired” and “accumulated” much possessions and servants while living in Haran. These men could not possibly accumulate such wealth without mutually beneficial trade occurring, wherein their own labors were exchanged with others for such goods and services.

The implied size of Abram and Lot’s combined wealth indicates a rather efficient economic system being in place by this time in man’s development (and that these two Hebrews knew how to operate very well within that system). This is why we took the time to discuss the development of that city within our previous article, Civilization Emerges.

For our present discussion about The Biblical Genesis of Money, however, let me simply point out for now that the Bible explains the three most marketable components of Abram’s and Lot’s wealth in the very next chapter of Genesis:

Abram had become very wealthy in livestock and in silver and gold.

(Genesis 13:2, NIV)

And one of these commodities is openly employed as “money” later by Abraham within Genesis when we read the very first clear real estate transaction recorded in Scripture:

Then Abraham rose and bowed down before the people of the land, the Hittites. He said to them, “If you are willing to let me bury my dead, then listen to me and intercede with Ephron son of Zohar on my behalf so he will sell me the cave of Machpelah, which belongs to him and is at the end of his field. Ask him to sell it to me for the full price as a burial site among you.”


Ephron the Hittite was sitting among his people…Abraham agreed to Ephron’s terms and weighed out for him the price he had named in the hearing of the Hittites: four hundred shekels of silver, according to the weight current among the merchants.


So Ephron’s field in Machpelah near Mamre—both the field and the cave in it, and all the trees within the borders of the field—was deeded to Abraham as his property in the presence of all the Hittites who had come to the gate of the city.

(Excerpt from Genesis 23:7-18, NIV)

We see within the Genesis 13:2 reference further above three out of the four main “monies” of the ancient world: gold, silver, and livestock (especially cattle). The one “money” missing in that list, but mentioned elsewhere in the Bible and historical accounts, is salt (which was valuable for food preservation). Nonetheless, we can readily see that ancient “mediums of exchange” were tangible goods. In short, “money” was inventedand true “money” has always properly consisted of commodities in high demand.

So we can see another “organic” economic truth emerging, which is really also quite self-evident:

The Nature of True Money: All TRUE monies have intrinsic (i.e. self-contained) value.

True Money Has Intrinsic Value

The Jewish-born economist, Carl Menger, explained quite accurately (and with a frequent use of the word “Genesis,” indicating perhaps at least one source of his inspiration) how money came into existence within his very insightful On the Origins of Money, published in 1892, Economic Journal, volume 2, pages 239-55, as translated by C.A. Foley (which can be downloaded here.) In brief, what Menger describes therein is the process in which a few commodities became distinguished within the market place by the fact that they were more “salable” (or marketable) than others, and that this propensity led market participants (over time, and through experience) to rely upon these as monetary mediums of exchange to make trading with each other easier and more efficient.

We can elaborate on this principle by using the same Genesis examples we examined in The Biblical Genesis of Trade: Let us consider our iron worker, Tubal-Cain, and his half-brother, Jabal, the cattle rancher. Tubal-Cain wants to obtain one of Jabal’s cows, but Jabal is not particularly interested in obtaining any iron hoes or bronze hammers at that time. He has plenty of them on hand, and would rather keep all the cows in his herd. Tubal’s “marketable good” is not very marketable in this situation, now is it?

So what Tubal-Cain needs to do is to find an “intermediary good” to exchange for one of his half-brother’s cows. He needs to find something that Jabal actually wants, in order to coax him into trading his bovine. So again, Tubal-Cain needs an “intermediary good” to help him obtain his goals. For our example, we will assume that Jabal is wanting a wagon with which to hitch to some of his oxen. Tubal is now having to run around and find a wagon—with an owner willing to part with it in return for some of Tubal’s metal goods.

Economists call this type of exchange process “indirect exchange” because an intermediary media is to be used as a transitional step between the person selling his own goods/services and buying those goods/services that he desires. However, in the way that I framed things within the example above, it would obviously be a very slow and cumbersome process for everybody to run around trading their own goods and services for other goods, in an effort to come up with a product that the owner of the FINAL goods would accept in exchange for the goods/services that they want to obtain. In fact, that would be a lot of work itself!

Also, what if Tubal-Cain shows up at Jabal’s house a week later with a wagon that he bought from a nearby carpenter in trade for some of the tools he made, and discovers to his dismay that Jabal had already traded a cow for a wagon two days previously with another neighbor? Now Jabal doesn’t want another wagon, and he still wants to keep all his cows.

More than likely, Tubal-Cain would probably be a bit angry at his half-brother; but such a possibility highlights even further how inefficient this process would be as merely an extension of direct exchange (i.e. direct barter). What would be needed is an intermediary good that nearly everybody would accept in exchange for their own goods/services (after proper negotiations, of course). Thus, “money” was discovered in-part as a market process in which everybody came to know which goods were the most “salable” or “marketable” and thus, the most “useful” as an intermediary medium of exchange within the marketplace. Again, the primary three “monies” that we will note here are the same ones from our Genesis 13:2 passage about Abraham:

  • Gold: God programmed into man at creation a certain amount of realization of the divine purpose in this metal, as the Lord had openly declared at the very beginning that it was attractive in appearance, precious in value, and morally “right” for possession (as we discovered in The Biblical Genesis of Trade). However, this innate understanding was augmented considerably by the experience of people within the marketplace.
  • Silver: Though not mentioned in Genesis chapter two, there is little doubt from other Scriptures that the Lord intended this to be esteemed in a similar, but inferior, way to its yellow cousin, gold. Again, market experience confirmed this fact and encouraged its use as a monetary medium.
  • Cattle: Due to their size, mobility (i.e. they can walk), usefulness for food (e.g. milk, beef) and productivity in labor (especially in the case of oxen), there is little question why cattle became a regular medium of exchange within ancient cultures—and remains so in many non-industrialized cultures today. However, due to the need to care for the animals, risks of disease, and lifespan limitations, the practicality of cattle as a consistently desired and accepted medium of exchange was far outweighed by gold and silver throughout history.

Though other commodities have been used throughout time in varying places (including such things as jewels, beads, tobacco, and even large stones conveyed by crude “deeds” within exchange transactions) without question, these three commoditiesgold and silver in particularhave stood the test of time as the primary monetary commodities of history.

So one could rightfullyand biblicallystate that these three constitute “God’s money” by His design, especially when you consider such passages as these:

‘The silver is mine and the gold is mine,’ declares the LORD Almighty.

(Haggai 2:8, NIV, emphasis added)

I have no need of a bull from your stall or of goats from your pens, for every animal of the forest is mine, and the cattle on a thousand hills.

(Psalm 50: 9-10, NIV, emphasis added)

The fact that market processes confirmed these as the monetary mediums is also indicated by such passages as:

Sheba, and Dedan, and the merchants of Tarshish, with all the young lions thereof, shall say unto thee, Art thou come to take a spoil? hast thou gathered thy company to take a prey? to carry away silver and gold, to take away cattle and goods, to take a great spoil?

(Ezekiel 38:13, NIV, emphasis added)

The widespread acceptance by merchants and the general public alike of these monetary mediums of exchange made them highly desirableeven to invading armies, such as the one described in the passage above.

The key to remember with each of these historical and biblical “monies” is that they all had their own intrinsic (self-contained) value and usefulness, plus the added value attached to them because of their wide acceptance within the marketplace.

Thus, we can identify another “organic” economic principle from the Scriptures:

The Nature of Exchange: All exchange transactions are in their essence simple “barter” transactions that exchange goods/services for other goods/services. Indirect exchange transactions are simply more efficient “barter” exchanges in that they exchange a good/service for an intermediary monetary commodity, which is then exchanged in turn (and time) for other goods/services as the buyer desires.

Economists complicate these issues oftentimes, but in truth, all exchanges are barter transactions; they are either direct barter exchanges, or indirect barter exchanges that use a monetary medium.

At their root, every transaction you and I make buying goods and services today are barter exchanges, with an agreed upon medium (i.e. “money”) through which we transact our trades. Most of us “sell” our labors in the marketplace for money, then take that money and “sell” it to the stores and shops when we buy the goods (e.g. food, clothing, personal electronics, etc.) and labors of others (e.g. car repair, dry cleaning, maid services, etc.) that we need or desire.

We are always selling something, and always buying something, whenever we make an exchange transaction. Thus, even with the medium of money, every transaction is actually a barter transaction in its essence. This simple truth will help us to understand some other “organic” principles later, so I am emphasizing this fact now  to imprint it within your thinking.

Prices Emerge

The development of money had another huge benefit that enabled the further growth and development of trade in human historythe ability to “price” goods and services.


REALITY CHECK: All world currencies (or their immediate predecessors) were originally "tales" (i.e. defined weights) of gold or silver bullion. Even the "paper" versions of these currencies were redeemable for real money. However, since abandoning their true monetary backing, world currencies have since lost about 99% of their purchasing power. That means prices are about 100 times higher today than when gold and silver backed the world's currencies... though median incomes have not risen as high in comparison. So the REAL purchasing power of most consumers has diminished since gold and silver were fraudulently demonetized by governments.

Previously, the direct barter system required haggling (negotiation) between parties over the goods and/or services to be traded (e.g. four cows for three horses). However, without some sort of “standard” medium of exchange, it was impossible to say that the “going price for horses” was 3/4 of a cow per horse. Of course, cows were not very divisible (if you wanted to keep them alive, anyway) and the cattleman also traded cows for sheep, tools, clothing, and vegetables. So how could anyone “measure” the price of a cow under such circumstances?

Obviously, in such direct barter exchanges, a “price” can ONLY be determined on a casebycase basis through negotiation by the parties involved in the transaction. Within a barter-based economy, therefore, a “going market price” (i.e. a sense of what “price” certain goods and services are currently trading at within the market) would be almost impossible to determine because the individual exchanges are all so unique.

On the other hand, gold, silverand even copper alloys, for smaller valuescould be easily divided and measured by weight. Even in ancient civilizations, their purity was also easily determined by the combination of its color (alloys have a different color than pure copper, silver, and gold) and softness (especially in the case of gold). Even the use of acids to test for the presence of an alloy mix was feasible in ancient times.

Thus, the monetary measuring unit—again, initially a certain weight and purity of a monetary metal—was born. These new standards enabled a tremendous advancement in the efficiency within the marketplace.

Calculating Prices

With the advent of “money” (i.e. a standard medium of exchange within the marketplace) pricing, budgeting, accounting, and economic calculation, all became possible. (We will discuss such types of accounting by businesses in more detail within another article.) Now there was a common “yardstick” (or “meter stick” for those of you outside the United States) by which prices could be measured and compared with one another.

This brings us quickly to another Organic Economic™ truth:

Money Prices: The use of money as a common medium of exchange caused “prices” to form in reference to units of that money, as goods and services then became increasingly measured and defined in terms of their value, by the accepted mediums of exchange.

Negotiations would still be required within individual transactions, of course. However, the ability to “price” products/services within a commonly accepted money simplified the negotiation process considerably. Furthermore, this development also had another immediateand probably simultaneous—secondary effect upon the market. Now “prices” could be compared among other prices within the market. However, we will explore that development further within a later chapter of the Organic™ Economics series.


In closing, it is plain to see why silver and gold were confirmed by the ongoing trade of the free markets as “money”:

  • They were very portable, intrinsically valuable, and easily divisible (and their purity identifiable by reasonably savvy market participants).
  • This is in contrast to other ancient “monies,” such as cows, which were very portable but could not be practically divided for smaller transactions (though cattle remained a monetary unit for millennia regarding large transactions, e.g. land; and are so used in some parts of the world today).

Again, the use of silver and gold in the marketplace is a God-ordained phenomena (according to the Bible) that was confirmed by human experience in the daily business of trade. This is a very important point for Christians to ponder as we continue our study with Organic™ Property Rights on the next page.



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