For a lot of history, there was no worldwide money related or monetary framework.

Exchange was primarily neighborhood and restricted to bargain – the immediate trade of
products without cash
By the end of the thirteenth century, Florence had become Europe’s banking center with 80
banks, and, as money replaced barter, trade within Europe and between Europe and other
lands expanded rapidly. Florentine bankers such as the Bardi and Peruzzi families established
branches around Europe and became immensely rich, involved in trading grain, wool, and
silk, as well as making loans and exchanging currency. The most important Florentine
banking family was the Medici family, later to become the city’s rulers. It was to Lorenzo the
Magnificent (1449–92) that Machiavelli dedicated The Prince. At its height, the Medici’s
banking empire had nine branches outside Florence at which it made loans, kept deposits, and
invested incommerce and industry. Its most important client was the pope for whom it
collected tithes (10 percent of earnings) from across Europe and, under Cosimo de Medici
(1389–1464), it actually managed papal finances. The Medicis also loaned money at high
interest rates to Europe’s rulers, As commerce spread northward from Italy, merchant groups
from commercial cities along the Baltic Sea such as Hamburg and Lübeck formed the
Hanseatic League, in the twelfth century. The league provided security for merchants,
standardized weights and measures, and fostered trade among Russians, Scandinavians,
Germans, Poles, and English. By the fourteenth century, some 60 cities were members of the
league. Thereafter, the European voyages of discovery created new economic linkages with
distant peoples and places, climaxing in the establishment of Europe’s empires and the
planting of European colonies on distant shores.
As the global economy grew, several theoretical approaches evolved concerning the
relationship between economics and politics, the most important of which were mercantilism,
liberalism, and Marxism.