Where does money come from? Those of you who study economics may reply with a fun story about the adventures of a man with apples bartering his way to bread; suddenly, the genius idea of money is magically implemented, and everyone lives happily ever after. The only issue with this story is that it is entirely made up. According to historians, barter-based economies never existed. The "father of modern economic thought," Adam Smith, originally popularized the myth of barter, taking the idea from Aristotle, who admitted he just guessed.

So, instead, let me tell you the true history of money.

Firstly, money is not a "thing." Any item can be worth a dollar, be it a can of coke, paper money, or numbers on a screen, but none of them is a dollar. Money is a tool for managing debt, an IOU (I owe you), and it is in this very form that we first find money. Written on ancient clay tablets, we see systems tracking who owed what to whom. But there is an issue: what would stop people from refusing to recognize the debt? Imagine the following scenario: You are in a room, and I offer you two leaves in exchange for your shoes - you would all refuse. But suppose there are now two armed guards at the door who will only let you leave if you give them a leaf; suddenly, my offer seems quite enticing.

Now, let me ask you this: where in your life do you need to pay money to stop armed guards from locking you in a room? Taxes. It is these very taxes that provide money its "value." This is true for every monetary system ever observed. The evolution from clay tablets to coins and bills was mostly a measure to fight forgery.