By Mira Korber, guest blogger.
Two days ago I visited the Times Square Discovery TSX exhibition of the Terracotta Warriors. It is a fascinating display of history, art, and architecture, and I was particularly struck by some economic artifacts from 221 B.C – specifically, each of the currencies unique to the “Seven Warring States” of China: Qin, Qi, Chu, Yan, Han, Zhao, and Wei. Interestingly, each currency reflected the values of its province. For example, in provinces that valued agriculture, the coins were shaped similarly to spades for moving earth. Other currencies featured knife-like forms.
These disparate currencies were used by each of the seven provinces until the First Emperor of China (Qin Shihuangdi from the Qin province) united them all in 221 BC. His new currency was called the “half-liang” coin, and it was round with a square hole in the center because the shapes harmoniously interacted in a symmetry appealing to the Emperor. Additionally, the Emperor standardized weights and measures, and axles on carts so they would run smoothly down new roads and infrastructure. While he feared death and sought immortality, it seems that he was not entirely impractical after all.
It’s fair to say that this type of monetary union has been around for a while. And it has always had the same purpose. A unified currency simplifies the movement of people, goods, services, and capital because its universal acceptance eliminates calculations and conversions. A unified system of weights and measures similarly standardizes methods of calculation. Imagine a country where each state or province had its own unique system, yet tried to make transactions across borders. Chaos! The First Emperor of China seemed to think so too.
The Bottom Line? Monetary union and consistency of measurements lower transaction costs. The First Emperor of China was certainly onto something when he decided to standardize money and measurement during his rule. And while he’s buried surrounded by Terracotta Warriors, a unified currency lives on.