Way back around the 700s in Japan’s Nara Period [710 - 794],
the Japanese started making coins.
For more than 2 centuries they tried to kickstart this coin economy,
but eventually gave up and didn’t try it again for 500 years.
Now if you have parents, you would know that money doesn’t grow on trees.
It grows on rice plants.
Around this time, the most common currency was rice, silk, and cloth.
These were called commodity currencies, when you use some product as money.
It’s a common myth that before people used coins and paper money,
they just bartered for everything.
If you needed an ax and you had some peaches, you traded with
someone who needed peaches and had an ax.
A super simple concept to understand, so it’s super wrong.
A barter economy probably never existed in any society.
Because it’s a pain in the ass.
You gotta find a person who had what you needed, and needed what you had.
And what if the thing you had was much more valuable than the thing you needed?
Like if you had a horse and you needed a basket.
“Yeah I’ll take that basket.
Here, let me chop off one of Silvester Stallion’s legs for you.”
Of course people bartered from time to time, but it was never the main way to trade.
Instead, what usually happened in a society as big as Japan was that a few commodities
naturally arose to become a currency.
This happens in games, and in real life.
And in relationships.
In Japan’s case, rice, silk, and cloth were the main commodity currencies.
Instead of trading peaches for an ax, you would trade peaches for some rice, then later
use the rice to buy an ax or anything else you wanted.
There’s another type of money called fiat currency, what we’re used to today.
It’s not a commodity, but something made up by the people in charge, like the government.
For a commodity currency like rice, its value is the value of rice,
but the value of a fiat currency is whatever the government says.
The US dollar bill is a fiat currency.
It’s worth one US dollar because the US government says so goddammit,
even though the paper it’s printed on is worthless.
Using fiat money is a sign that a society has a more developed economy and state,
because you need a strong central government to back that money.
Unfortunately for Japan’s government in the Nara and Heian Periods, its back broke.
[it's all downhill from here]
At the beginning of a relationship, there’s that honeymoon phase where everything
seems perfect before you both hate each other.
Japan’s relationship with coins started off that way.
The earliest copper coins we’ve dug up are from the year 687,
but people might have used them for religious rituals instead of money.
The first official copper coins were minted in 708.
Japanese nobles visited China often, whenever they needed to bring back a new word.
Someone must have seen the Chinese use coin money then came home and said,
“Bruh we gotta get into the coin market.”
Ah famous last words of the crypto bro before he loses his college fund.
Sorry, I shouldn’t dismiss crypto coins like they’re all scams.
Like with anything, do your research first on the coins you’re interested in,
and then dismiss them.
Money doesn’t grow on trees, unless you’re a government.
The Japanese Imperial court made someone the chief coin maker and told him to make a coin.
They came up with the design for the new coin by using an old but proven technique called
copying China’s homework, a popular technique among the early Japanese.
Here’s a Chinese coin.
And here’s the first official Japanese coin, birthed in 708.
Like having a son but your son looks like your neighbor.
They experimented with gold and silver too, but mostly settled on copper because it was cheaper.
The government was so excited they went around saying,
“Hey look at this thing we made” like little kids.
They passed laws to make sure the money spread fast, like little kids with guns.
They banned people from using any other metals as currency.
If you were caught counterfeiting the coins, you suffered 200 hits with a rod, and your
possessions could be stripped and given to the person who reported you.
The court allowed nobles to trade in the copper coins for a higher court rank,
making it legal to buy court positions.
Government officials and workers were paid in copper coins.
Commoners could pay their labor tax in coin.
Hoarders became a problem, the government hated hoarders.
You try to make a new financial system but here were these hoarders just cockblocking
your economy, saving coins instead of spending them.
The court even put out an edict condemning hoarders, saying,
“Alright you sons and daughters of bishes.
Look, if you’re not gonna spend the coins, then you gotta give them back to us.”
To which people responded with Yeah good okay.
Now if you have a money printer in your backyard, how long would it take for you to cave and
start printing a ton of money like you had a foot fetish and it was printing feet?
Probably not long.
And I’m guessing the Japanese government felt the same way.
Well butter my boobs and call me popcorn, I was right.
The Imperial court churned out a bunch of coins.
They were worth much more than they took to make.
It was free money that went into government projects,
including a huge project to move the capital.
Workers building the new capital got paid in copper coins.
The court was rolling in cash.
Alas, the honeymoon soon ended and the plane landed back in reality.
[Too Many Coppers ‘Round Here]
The Imperial court discovered the principal law of investing:
once you invest in something, its value will immediately go down.
Problems hit the coin economy from all sides.
With the government adding more and more coins into circulation, it led to inflation.
Remember, the coins still had to compete with rice, silk, and cloth.
A huge smallpox epidemic hit in 735, wrecking supply chains and driving up prices and inflation.
With great money comes great counterfeiters.
If you were a skilled enough blacksmith you could make your own coins and it would’ve
been real hard to tell they were fake.
A document from the court in 760 claimed that half of all coins were fake.
We don’t know if they were right, but it shows that counterfeiting was a big problem.
All these problems caused inflation to skyrocket and the value of the copper coin to drop.
The nobles in court were like, “Okay don’t panic.
I got an idea.
We’ll make a new coin, and we’ll declare that this one is 10 times more valuable than the old one.”
Genius.
It worked for a bit, but gradually the value of the new coin dropped too.
They kept making more new coins, declaring each one to be more valuable than the last.
The government tried real hard to prop up the value of their coins.
They even ordered temples to pray for people to use the coins, but even the gods were against
them because in the 800s, Japan suffered a copper shortage.
It forced the Imperial court to make smaller and smaller coins,
and they had to mix in other metals with the copper.
In later coins, 90% of the coins was not copper but lead.
Over 250 years, the government minted 12 types of copper coins in total,
plus a gold and 2 silver coins.
At the end of all that, the value of all 12 copper coin types dropped until they all had
the same c-ck bottom value.
We don’t really know how widespread these coins were.
They might have only been used in regions around the capital.
It seemed like people distrusted these coins.
Hard to trust coins that keep dropping in value.
By the middle of the Heian Period, people basically stopped using them,
and the government said, “We give up.”
They stopped making coin money for 500 years, until the 1500s when local governments started
experimenting with coins again.
Printing money for profit wasn’t the worst thing the elites did.
If the coin economy worked, it probably would have been better for the common people.
If you really wanna see what kind of *ssholes the elites and samurai could be to the common
people, click on this video.
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