44. A Better Money Legend

Plum Local IV ::: Part III 

National Investment and Money

=== chapters 44 - 50 ===

=== look to right column for direct links to chapters ===

A Better Money Legend
Bob Komives
::

Who Created Money?

Money is one of humankind's great inventions.
I was not around when it was invented,
but I do think I know how it happened.

In the third or fourth grade I was taught:
primitive people traded things for things;
we needed a better means of exchange;
we invented money.
What an image!
These hapless primitive people
dragging around elephants and chickens
to exchange for coconuts,
while their suave modern cousins
sit under a tree sipping coconut milk
passing a few coins back and forth.
I have since heard many adults and children
tell this same simple history.
My hair was turning white
when I found something missing--
Who?
Granted,
trading chickens for coconuts could be cumbersome
for the poor folks who walk to the marketplace,
but poor folks do not create money.
Kings, queens, emperors,
bankers, and empresses create money.
They always have plenty of burly helpers
to carry their chickens and coconuts.
Which one said:

"My poor subjects are so overburdened.
Trade is so bulky.
I, nice person that I am,
will give them a means of exchange."

Even if one leader were that smart and that good,
why did cruel and dim despots continue the practice?

Listen to this story.

Let us imagine that first money was made of gold,
and it was issued by an empress.
Before making her coins the empress needed gold. 
Whether she stole it,
got it through in-kind taxes,
inherited it,
or had it mined in her own mines,
she had a storehouse of gold.
Gold held great value in her empire.
She could buy armies, loyalty, roads, music, or whatever.

Now, suppose her artisan made her a radical proposal:

"Your highness,
you are so beautiful;
I am so skilled.
Let me melt your gold
and cast it into little disks
carrying my beautiful rendering
of your beautiful face."

She feels flattered and tempted.
But she says,"no,"
and puts the artisan in the dungeon for treason.
After all,
some gold would spill on the foundry floor.
The artisan could hide away bits of the gold--
making him a rich and disloyal man.
Many laborers would be needed.
The melting would use up many trees.
The dungeon was almost too little punishment.

Then there arises a great crisis in the empire.
In the east a horde of barbarians prepares to invade.
In the west, three princes want a good road to market.
Without it they may sever their lands from the empire.
The empress summons her advisers.
They report:

An army to defeat barbarians
costs 10,000 pounds of gold.
A good road over the mountains to the west
costs 10,000 pounds of gold.
In the empress's storehouse
are 10,000 pounds of gold.
The barbarian invasion by itself,
or the secession of the princes by itself
will bring destruction of the empire
and death to the empress.

Despair sets upon the empress and her advisers--
until she remembers the artisan.

"Free the artisan
Instruct him to melt all my gold
and mint me 20,000 gold coins carrying my image.
I proclaim,
each coin has a value of one pound of gold.
Spend these coins to raise an army.
Defeat the barbarians.
Build a road over the mountains to the west."

In her selfish interest the empress spends coins.
Her subjects must accept them at twice their value in gold.
Through this great and official hoax
she proposes to save her empire and her life.
To her own amazement,
the hoax works.

She builds the road.
The western provinces boom in productivity
as ever more commerce uses the new road.

She defeats the barbarians.
In the eastern provinces,
under peace and stability,
farmers and artisans produce as never before.

Once coerced to accept the coins,
citizens now covet them.
With more goods and services to buy
people welcome the new means to buy them.

The secret cannot be confined to one empire.
Kings, queens and emperors imitate the great hoax.
Some invest their coins wisely and prosper.
Their subjects revere and follow them.

Other rulers are less wise.
They spend their diluted gold coins
on pleasures that drain wealth rather than nourish it.
Drowning in a sea of over-valued coins,
their subjects resort to trading of a-good-for-a-good,
and they rise up to throw out their worthless rulers.

Who created money?
Someone powerful and selfish and a little wise.
Someone like the empress.

Who Created Money

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV :: 44. A Better Money Legend ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::