The Economist has this blogged in July …
“There are two leading schools of thought about this. The first was set out 120 years ago in a paper* by Austrian economist Karl Menger. In Menger’s theory buyers and sellers agree on a common commodity to use as the medium of exchange. Something small, valuable and divisible is best. It helps if it doesn’t rot. Gold, spices and shells are all good examples. This money is highly “saleable” so everyone accepts it, and this means that traders don’t face the costs associated with barter (the time spent having to scout around looking for the rare person that both wants what you have, and has what you want).
There is no role for government here. The Mengerian theory describes a market-led response to the high transaction costs of barter, in which the private sector defines and uses money as a solution.
The second theory places great emphasis on the role of government, as Charles Goodhart explains in a 1998 paper. This group—the Cartalists, who Mr Goodhart refers to as the “C team”—argue that currencies become money due to the active involvement of the state. Examples include setting up a mint to produce coins, demanding taxes are paid in state money, and stamping notes with the head of state’s image. And while the M-theory is backed by history’s superstar economists (Locke, Jevons) the C-theory has much stronger evidence based in anthropology and history.” — Source: The Economist blog
I didn’t find this social studies money unit (for the very young) useful at all … but someone else might http://thematicunits.theteacherscorner.net/money.php. See also Money Worksheets – elementary lessons on counting pennies and such
**How Economics Works in One Lesson … somewhat boring…
The American Dream Understanding money and the banking system … this one’s fun … cynical lesson on Debt=Money http://www.youtube.com/watch?v=mQ-ayV0kHUA&feature=related
***How money is created in a Fractional Reserve Banking System (video lecture on Youtube) — and How money and banking really works for advanced students
***How to explain the financial crisis to your kids (and most grownups)
How an economy grows and why it doesn’t (by Irwin Schiff)
Mind over money PBS Nova video on the psychology behind money use
*** The Ascent of Money: A Financial History of The World by Niall Ferguson Epsd. 1-5 (Full Documentary)
Million dollar traders (3 parts)