Who is “desperately looking for quality, non-sensational economic vidoes,” lol. Like you’re looking for a toilet. Read research papers or the economist or something if you really want to know what is going on.
@@TheOskroWatch " The History of Central Banks and the enslavement of humanity" listen to Barbara learner Spectre and watch " Europa the last battle" they are pure stantic psychopaths, just do some research please thanks.
Actually, my bachelor's degree thesis was based on medieval credit between Spain and Flanders, focusing on exchange lettets and its moral implications. Great video!
Greetings from Florence! I salute the use of Cosimo the elder of Medici portrait as “standard” banker. I just want to add that the competing families of bankers de facto fueled the renaissance and made this city rich, still more than 500 years thanks to Tourism! Great job and Ciao!
Hehe yeah... he was far from a standard banker. Actually the reason is that I like to create some continuity between the thumbnail and the content... and I just had to have him on the Thumbnail. Florence... what an amazing city... I would love to visit it again some day.
@@MoneyMacro I would be happy to guide you in the city, My wife was a tour guide before Covid and she did some tours focused on the old banks and the rise and fall of the different families. It is fascinating how the bankers shaped the city and, in time, the political history of Italy and Europe.
Great video. One point I would add is that metal coins almost always traded at a greater value than the metal they contained. For example, per the wiki on Roman Currency, the Denarius traded at between 1.6 to 2.85 times the value of the metals it contained. You touch on this briefly, but this is due to the fact that not only did the minted coins have use-value as a unit of exchange, but they were also demanded in tax payment by the sovereign. In this way, even metal coins were a form of credit in the sense that they were tax credits issued by the state. I.e, they were redeemable for settlement of tax liabilities, giving them a value greater than their underlying metal content.
@Charlie It's pretty much fiat currency, just not printed on paper or as zeros in a computer, but made from metal. It's also how you can understand the evolution of money from IOUs. Fiat money ultimately is valuable, because the market authority emitter can force you to return it as a tax, for his service of controlling the market, because he is the force monopoly (government). The only big problem with this (noble metal carrier) .. if your economic activity exceeds the amount of coins you can make you enter deflation. Deflationary death spiral. Which is why all major economies switched over to paper in the 60's. It's also why cryptocurrencies will ultimately fail as a medium of exchange, their amount is limited on principle.. PS: if you look at IOUs you will notice that they ultimately have a limited validity period - if the emitter (the debtor) ceases to exist, the IOU he signed will not be redeemable anymore. The same should be true for government issued fiat currency.. how long into the future do you EXPECT a government to exist? 500 years? 100 years? 50 years? If you invert this validity time span you get to a yearly value loss of that currency unit you hold in your hands (linear regression). 50 years -> 2% YoY 100 years -> 1% YoY aso.. This is the solution to the zero lower bound problem that fiat currencies have and which cause them to strike/fail once an economy saturates. When interest rates fall to zero and even below. When economic activity slows down (or god forbid even shrinks), see Japan, Denmark, Switzerland, EU central bank interest rates right now and for the last decade.. This is why our economies have a problem and why everybody wants economic growth. It's because of an accounting error upon creating it. Keynes said that the world will learn more from Silvio Gesell than from Karl Marx. That's what he was talking about.
@@joansparky4439 I agree that all money-things are essentially IOUs and that cryptocurrencies are something other than currency as it has existed historically in the context of civilization, and especially developed economies. I view crypto as mere digital assets rather than currency. Like digital stamp collecting.
Essentially nothing has changed since the ancient times: States create their own (central bank) debt money by spending money into circulation and taxing it out of circulation. Banks for their own part create private money by issuing credit which creates equal amount of bank money in deposits. Unfortunately almost nobody understands this nowadays. Instead the commodity money theory (from 1700's ?) remains the prevailing monetary theory among the general public, politicians, major part of the economists and the central bankers.
@@M0stlyHarmless9 Crypto currencies that are mined and have a finite amount are like metal commodity currencies.. with the same problems as those and not solving the problem of zero lower bound of contemporary fiat currencies. E-Gold. Without the intrinsic value of gold. LOL What an moronic idea. When we got rid of that (Bretton Woods) we left the deflationary death spiral behind.. good riddance. And these cryptos bring it back. SMH And that's why they work like digital assets and not as a medium of exchange, you're completely correct. Money comes out of an incomplete exchange of 'resources' (product). One party surrenders product and the other gives a promise in return. The promise is debt, ie. I owe you this and that. The one who does that is the debtor. The creditor is the one who believes the promise and accepts it instead of product. If he can hand that promise to a third party that also believes in the original debtor keeping his word you get modern fiat money. But the debtor never exists for infinite times.. this means the validity of the promise never is forever. This is where DEMURRAGE comes from. Even Gesell didn't see it that way. What Bretton Woods didn't solve was the zero lower bound problem which stems from the ignorance of the limited lifetime of the currency (debt) issuer.. in the case of government issued fiat currency this is government. But in the case of you and me it would be you and me. The USA had private issued currencies before the Federal Reserve Act. In the Constitution of the USA it even states that the Government may participate as a source of currency, but not be the only source for it.
Fascinating video! I've come across bits and pieces of this history so it was great to see it all synthesised in this presentation. The insight that anyone can create credit 'out of thin air' was a crucial one for me, and it was great to see it expanded here with a logical progression in the historical example. Thanks!
This and other videos of yours are invaluable to me! I've wanted to understand the fundamental nature of money for a long time and I've even finished a minor in economics as part of my studies, but that never really addressed my questions about money. With these videos I'm finally starting to get a picture. If I may suggest, the editing could be slightly more relaxed occasionally. For this kind of information heavy content having a bit more space between some cuts would allow the viewer to absorb and process the input better. But overall fantastic stuff and please keep making more!
Thanks! I figured the barter money system is covered well.. but the origins of credit money have hardly received the attention it deserves. Hmm yes I see. I noticed as well when editing ... but it was a bit tricky for me to get a feel for after hearing / seeing my own story over and over again (as happens when writing / editing) ... I will keep it in mind next time :)
@@MoneyMacro love the videos, but have to disagree on the pace. This video had my attention the full 11 minutes which I think is the most important in the current RUclips landscape. 15 minutes also wouldn't make it 'bite size' anymore I'm afraid.
As a young uni student (sociology), just getting into economics, your videos have got to be some of my favorite on this platform! You are a good communicator, yet you don't shy away from diving deep and telling some of the more untold stories of economics. Economics is always portrayed like it's math, and while math is of course an important tool of economics, it is really a kind of sociological or anthropological field and I think you are very good at incorporating that human side, so it doesn't all become tables and models in the abstract. Keep making these and I'll keep enjoying them!
Recently found your channel and instantly subscribed. Amazing content! Please do more response videos / correcting the record. It’s super interesting to walk through common misconceptions with a concrete example. There are tons of videos you could review and they would probably perform well too! I don’t see it as drama or negative, I think the channels you talk about are well intentioned but everyone makes mistakes!
This feels like an explanation of the Spice and Wolf anime, which also covers the mechanics and factors of trade. Thanks for explaining the links between trade and credit! It builds on what I've read in textbooks about consumption smoothing. :)
Absolutely loving your realistic topic selection. Please don't give in and start making "viral economics" videos - ok maybe just a few for the algorithm.
Thank you! Very glad to see you back in the comment section. I've always been a huge econ history fan.... the Athens video didn't do very well... but, I figured, I'd give it another shot :)
The word "bank" originally meant "bench" and comes from benches in Venice where early money exchangers were sitting :) Another product of late medieval are shares and investments. Italian city-states became extremely wealthy thanks to trade, mostly in the Black Sea and East Mediterranean, where they could buy exotic goods and then resell them at higher prices elsewhere. But the problem with this was that it required a lot of money to purchase those goods and most ship owners didn't have that money. Therefore before going on a trip, they would sell "shares" of future profits on the docks, and people would buy shares based on their trust in ship-owners knowledge of prices and demands. Since there was always a possibility that a ship would sink in a storm, be looted by pirates or enemies, investing a lot of money in a single voyage was risky so people preferred buying smaller shares in many different ships as that minimized the risk. It's pretty much the same basic principle how modern stock market investment works.
Reminds me of my malfeasance and misbehavior financial history module. Another wonderful video! Moving to NL soon; hope to somehow bump into you to ask for an autograph
Honestly this just shows how reliant we were on derivatives contracts for much of European history. It also shows how we sort of had fractional reserve banking.
Represeting the city of Brugge (Bruges). Love your videos, great to learn some economics and most of what you say we learned in school. Nice bit of history and economics
The first words you spoke in the video were "What is money?". I watched Hidden Secrets of Money (sorry if this is like advertising) and the answer the presenter gave was: Money is: 1. Unit of account 2. Medium of exchange 3. Portable 4. Durable 5. Divisible 6. Fungible 7. Store of value (over a long period of time) Currency was 1-6 and not a store of value. The conclusion was that gold and silver, when minted and high in purity, was real money. Would this be agreeable in your understanding/beliefs of economics? Do you think we've figured out the best way to attach value to goods/services/labor/etc? Thanks a lot for the work you're doing! Will definitely become a patron to support you when I start my new job, I think this is very important and educational content.
Well done, need a video to send people to explain this, you do it well. I point out to people that most business is done the same way that banks work... you open an account with a supplier that might give you a £5000 credit line - which is just numbers entered on a computer... procurement "withdraws" goods and materials against this account, with accounts paying it at the end of the month. Banks do the same thing, but they supply money, which they buy from the treasury for the face value of that money. A small amount of this pays for the minting of the coins/notes, but the rest goes into the treasury.
Great video, though I’m not sure if gold has “intrinsic value” given the amount of value derived from it actually being used in producing goods is a tiny proportion of its over all price
There is no such thing as intrinsic value. Value is always derived from the usefulness of something, be it for trade (fiat money) or for producing goods. The latter also only relevant when the produced goods themselves provide a value to someone, i.e. are "useful" (in a very loose sense of the word). Hence, yes, gold has not much more intrinsic value than bitcoin or fiat as its primary usefulness is derived from being a store of value, which itself is a collective belief just like with fiat. If you want a currency that approximates intrinsic value as closely as possible, it would be a daily necessity as food. Then you're not just relying on belief but on the fact that people don't want to starve.
Credit is fine, it's the bundling of garbage debt and selling it as prime debt that is problematic, remember 2008-09? Also, in the system described in this video, every single unit of credit can be converted to gold, and the amount of gold you get does not decrease over time (like it does today) - the credit was denominated in gold (not fiat) and it did not inflate.
@@xhelloselm No it doesn't, at least not yet -- credit requires a reputation system, defi lending is over-collateralized, if it were under-collateralized the risk the lender is taking on is credit.
One could build a credit system on top of bitcoin, the same way the bretton-woods system was credit built on gold. Fiat currency is broken because lenders can create an infinite amount of credit, the clearing cycle is for those who take on bad debt but also those who issue it. Debasing the currency is a symptom of a declining state. Credit creators lose credibility.
You began with the question "what is money", but instead discussed only forms of money, rather than the content of money itself. Yes, gold, silver, bills of debt, bank notes etc. are forms of money, and forms always create illusion of being the actual content itself. But I liked your video for its historical view on credit-money.
Lots of things _have_ been money or are currently money, but, to me, the really interesting question is: "what is the best form of money?" I would answer that with "true ledger money", that is to say a digital currency that is _fully backed_ by itself aka full reserve banking. The best example today is central bank reserves.
@@MoneyMacro oh yeah since this isn’t organized by the central banks.. I was wondering if you could do a f/up video on the advantages and disadvantages of credit money in modern times or how to grow wealth with credit money. Thanks
I like the video, I think I need to watch it again to understand it though. I agree with another suggestion that giving a bit of a break or giving a bit more time to examples, that would be nice. Thanks!
Great video! Sure, credit = promises and confidence, which has always existed. It is worth mentioning economic bubbles, when it comes to credit and IOUs. Gold or silver are simply means to prevent bubbles and secure confidence if doubt in the financial system occurs. During good times people love credit, and during a financial crisis typically caused by a bursted bubble, they return to gold and silver and other commodities. The Silicon Valley bank is just the latest example.
Haven't read it yet. I think it is very much in line with this video though. In that it recognizes that credit money is ancient and has always been very important.
@@MoneyMacro I think it complements your point about how commodity money is much easier to rationalize, so it can be easy to put it on e pedestal and think of it as the only "real money". Meanwhile, it seems like the economic systems we work in are more dictated by natural laws than our own design or intentions. Because of this, something more complex like credit money can occur and be used successfully without the participants needing to understand or rationalize it. At least, that is my take as someone who studies economics very casually. Thank you for the videos, by the way.
I love your videos, thanks for your hard work. Just a tiny suggestion about the speed of the clips, they are changing to rapidly - personally I'd enjoy watching one longer. But that's just my annoying opinion 😃
Naturally, Princes' coins are debt/credit money also. A Prince mints coins to pay soldiers and clerks, etc. The value of the coins is not because of the weight in metal but because the Prince demands payment of Taxes in these same coins. Tally sticks are also used in England. Clipping, melting down and otherwise defacing Princes' coins was punishable. Minting your own imitation Princes coins was also punishable (called counterfeit), regardless of how much metal was involved. Basically a Princes coin represented a promissory token by the Prince that your tax debt to him could be settled with a sufficient quantity of these tokens.
If you look at everything from the perspective of risk the purpose of commodity money is a zero risk money. All types of credit carries some risk and are therefore not appropriate in every circumstance.
@@MoneyMacro yes indeed! But through the most of History gold and silver were pretty stable. So I suppose it is not actually zero but very low. Spain after plundering the new world would be the great exception
@@ErikHare one way of putting it might be that with commodity money you have very little risk that someone abroad will not accept your money. In the sense that, in Medieval times Medici money might have been widely accepted in major cities, but you could use gold coins in many smaller cities as well (perhaps you didn't get the best exchange rate, but still).
@@MoneyMacro yes indeed. It all depends on your appetite for risk and your immediate needs. If you are going to Market to sell your produce and you need 20 ducats to pay the rent next week you are not going to screw around with anything risky.
For a long time countries used silver coins as a currency, mainly due to the fact that the Venetian banking families would not allow it otherwise. Venetians were the main creditors in the middle ages, financing most of Europe sovereigns, and they dictate the terms of paying back the debt. For example large gold deposits were discovered in England in the late 11th century and they wanted to repay their debt to Venice in gold but they didn't allow this and demanded it be payed in wool. Gold became a thing in the 12th century with arrival of Mongols to Europe, who had pillaged and accumulated large amounts of gold. They traded this gold to Venice, that didn't have gold mines, for other products and this is how gold coins replaced the silver ones. This banking monopoly persisted for a long period until Venice was dismantled by Napoleon. But some say that the Venetian aristocracy persists to this day and they have been dubbed the black nobility, a name coined during the era of hostilities between the White and Black nobles (for and against the Pope).
Very interesting. Would you consider doing a video on the long term outlook of the economics of Brexit? As someone from the UK, it seems hard to find impartial views. I think it's better to find out the likely truth whether it's hard to hear or not.
I recommend Tldr news. A group of UK-based RUclipsrs who provide a really balanced (in my opinion) summary of major news stories. They came into prominence almost entirely due to Brexit.
I'd love to hear your thoughts on the ideas of the development of money/credit/debt of David Graeber in his book 'Debt: The first 5000 years'. It's pretty fascinating and provocative
@@theoutlook55 He was mostly an anthropologist, so he heavily critiques and provides counter-evidence against the standard economic stories of how money and credit developed and functioned in societies at different times
to me, money is supposed to be a solution to the problem created when we could no longer barter trade our goods and services because they advanced unevenly and were no longer considered of equal value-is there any philosopher in history who talked about this?
You're brilliant. This is entertainment that is actually worth the time. Plus the guilt from leaving Heidegger closed on a friday night and breaking open a can of special brew isn't as bad. Thanks for making them. They are always a treat. Would love to see something deeper on the euro as a possible super currency, and your view on the political issues that might gain traction from this, specifically with respect to the US. Don't know if it's true but once heard that Muammar Gaddafi was considering pulling libyan gold out of the dollar and investing it into the euro, and that this was part of the motivation for the invasion of Libya. Might just be bullshit from a night at the pub, but it sort of stuck with me. Have a nice one.
Honoured to hear that. Kinda jealous of the special brew now though. I want to make a video about the European Union at some point that is similar in style to my Japan video. Eurozone / Euro design will be a big part of that.
0:18 does gold have an intrinsic value? Appart from very limited economical use. I always thought golds value derives from its use as a currency unlike cigarettes for example.
This already is fractional reserve banking :) since these merchant bankers typically held some metal in reserve to be able to service some deposit holders that wanted to exchange deposits for metal.
There is a simple counter example which shows that credit didnt arise from or and isnt motivated by classic seasonality problem. Social contract type corporations. That is, the hunter and farmer both agree to work the land and share the produced goods over time without defining what belonged to whom. This does not require property, credit or mediums of exchange at all. This kind of cooperation is a far better description than calling it debt and credit. Debt and credit rather arose from taxes, ie as agreements forced upon another are sufficiently adhered to by the more powerful party for long enough to establish contract adherence as a societal norm.
We can also see the usage of credit money in ancient Mesopotamia one of the first civilizations. Traders would go on a caravan for a over a year, but won’t have enough money to buy the goods, so that they can later sell them nor would they have the goods. So they borrowed and took a credit or promised to share the profit. In the meantime those investors when they were in need of money, they sold their credit promise to another investor. The first derivatives emerged.
I've always been a believer that when it comes to economic, whether the core idea is good or not is no where near as important as how it's implemented. I've seen a lot of videos where people try to argue that we should go back to the gold standard, but we were on it for centuries, we still had problems, and we still arrived at the system we had today. They tend to respond with if we can fix the problems we had with the gold standard it would solve everything, and yeah that may be true, but how does that not apply to the system we have today?
@@geraldg350 In theory yes, but they'll just end up doing what they did in the past: mix it with other metals and dilute it, leading to inflation. In the end, you just end up back at the same problem: how to make sure the currency is managed responsibly, and all the solutions I hear proponents of the gold standard propose, end up applying to fiat currency, as much as they do to gold.
@@jacob_90s you're right metals just make devualation harder but it still happens in the end. So the problem is isn't the tools fiat or metals but rather human nature propensity to consume more than they produce and neither fiat nor metals solves this fundamental problem.
Hi Joeri. I've direct a question for you regarding your response to EE's video on hyperinflation, perhaps you missed it :D Anyway, I'm starting to learn more about macroeconomics as a beginner (I don't have a background on economics or finance whatsoever), could you recommend where to start? Perhaps what books to read, or what journal to follow? Another insightful content coming from you btw, rhanks for the education!. Love from Indonesia!
Also see the anthropologist David Graeber and Prof. Margrit Kennedy about it and Helmut Creutz and Prof. Wolfgang Berger from Germany about Silvio Gesell.
Fascinating video ! I know you are an economist not a historian, but it would've been nice if you had included specific dates or time periods of when each step of the banking evolution took place. Great video nonetheless !
I'm reading a book right now called The Verge by Patrick Wyman about the time period 1490-1530. He argues that this period is the start of large scale proto -state debts in Europe.
Money is command over labor. That labor can be dead labor materialized in the form of created commodities, or it can be the ability of the issuer to command future labor with... whatever it is, as long as enough people use it that way.
Our finance professor recommended this video for us to understand the bills of exchange concept. Yet I have learned different thing than bills of exchange, the credit theory of money. Is there any book you can recommend about this discussion. Thank you so much for the video.
Very happy to hear that. My main source for this video was actually the book: A Financial History of Western Europe by Kindleberger. Some other sources are linked here in the script: www.moneymacro.rocks/2021-08-27-medieval-europe/ Hope that is helpful :)
Appreciate the content you're putting! One video suggestion that I have is to talk about the behavioral aspect of Bitcoin's deflationary nature in the event that, as its proponents say, it does realizes its potential as both a currency and store of value.
I has heard that local markets in ancient China were making use of credit longer ago than even the Greeks or Romans. I'm not sure if it reached the level of credit money, and at least some of the systems weren't fungible, as they were tied to the issuer's identity. Nevertheless, the existence of credit tokens as a carrier of exchange that far back speaks to the core feature of money being widespread acceptance as money, not some abstract notion of intrinsic value. What makes commodity money money is just that a sufficient portion of the population agrees it is in fact a commodity! In a sense, credit money *is* commodity money, it's just that the commodity is trust/social acceptance itself!
In the first example, does the traveling merchant use the bill of exchange to buy goods from the Flemish merchant? If so is the Flemish merchant contracted with the money changing families to accept bills of exchange? Or is it that the travelling merchant sells a bill of exchange for local Flemish currency and buys the local goods using this currency?
In the first example the smaller Italian merchant trades with a 'big' merchant that has offices both in Italy and in Flanders. So the bill of exchange denominated in Deniers is used to pay for goods in Flanders from the big international merchant.
I am watching the video and got a bit confused when at 4:23 the Italian merchant was represented but Van Eyck painting (big hat man) so I assumed he was from Bruges and had to watch again. Okay, checked for the portrait - the name of the man is Arnolfini, and he was of Italian origin, but he spent most of his life in Bruges,, so wasn't really crossing the Alps so much, maybe just slightly misleading.
Yeah they played a big role before this in facilitating money transfers from Europe to the middle East and then a basically became a massive banking organisation. Left it out here for simplicity. Would warrant its own video
Since a hunter and farmer are typically part of the same community, their arrangement can also be classified as reciprocity. I hate that economics glasses over the most fundamental form of social exchange, they very foundation of friendship, family and community. It’s like anthropology 101 too.
Very interesting video, but do economist really think that deferred payment is conceptually equivalent to a purchase on borrowed money just because both can be called credit? Or that's just your opinion?
As someone who desperately was looking for quality, non-sensational economic videos on RUclips I am so glad I found your channel.
Who is “desperately looking for quality, non-sensational economic vidoes,” lol. Like you’re looking for a toilet. Read research papers or the economist or something if you really want to know what is going on.
@@TheOskro I do. The next part of my comment was "on RUclips", I'm sick of the Jake Trans and Economics Explained
don't feel too safe this guy also overstates things for views
@@TheOskroWatch " The History of Central Banks and the enslavement of humanity" listen to Barbara learner Spectre and watch " Europa the last battle" they are pure stantic psychopaths, just do some research please thanks.
Actually, my bachelor's degree thesis was based on medieval credit between Spain and Flanders, focusing on exchange lettets and its moral implications. Great video!
we need more people that inform how the economy actually works today. Thank you for your bachelor's degree.
@FriedIcecreamIsAReality actually your investment on Crypto is pointless
Future is Medival
Is your thesis available anywhere to read? I'd be quite interested to give this a read sometime.
can we read it somewhere
Greetings from Florence! I salute the use of Cosimo the elder of Medici portrait as “standard” banker. I just want to add that the competing families of bankers de facto fueled the renaissance and made this city rich, still more than 500 years thanks to Tourism! Great job and Ciao!
Hehe yeah... he was far from a standard banker. Actually the reason is that I like to create some continuity between the thumbnail and the content... and I just had to have him on the Thumbnail. Florence... what an amazing city... I would love to visit it again some day.
@@MoneyMacro I would be happy to guide you in the city, My wife was a tour guide before Covid and she did some tours focused on the old banks and the rise and fall of the different families. It is fascinating how the bankers shaped the city and, in time, the political history of Italy and Europe.
Great video. One point I would add is that metal coins almost always traded at a greater value than the metal they contained. For example, per the wiki on Roman Currency, the Denarius traded at between 1.6 to 2.85 times the value of the metals it contained. You touch on this briefly, but this is due to the fact that not only did the minted coins have use-value as a unit of exchange, but they were also demanded in tax payment by the sovereign. In this way, even metal coins were a form of credit in the sense that they were tax credits issued by the state. I.e, they were redeemable for settlement of tax liabilities, giving them a value greater than their underlying metal content.
Hear... hear...
@Charlie
It's pretty much fiat currency, just not printed on paper or as zeros in a computer, but made from metal.
It's also how you can understand the evolution of money from IOUs.
Fiat money ultimately is valuable, because the market authority emitter can force you to return it as a tax, for his service of controlling the market, because he is the force monopoly (government).
The only big problem with this (noble metal carrier) .. if your economic activity exceeds the amount of coins you can make you enter deflation. Deflationary death spiral. Which is why all major economies switched over to paper in the 60's.
It's also why cryptocurrencies will ultimately fail as a medium of exchange, their amount is limited on principle..
PS: if you look at IOUs you will notice that they ultimately have a limited validity period - if the emitter (the debtor) ceases to exist, the IOU he signed will not be redeemable anymore.
The same should be true for government issued fiat currency.. how long into the future do you EXPECT a government to exist?
500 years?
100 years?
50 years?
If you invert this validity time span you get to a yearly value loss of that currency unit you hold in your hands (linear regression).
50 years -> 2% YoY
100 years -> 1% YoY
aso..
This is the solution to the zero lower bound problem that fiat currencies have and which cause them to strike/fail once an economy saturates.
When interest rates fall to zero and even below. When economic activity slows down (or god forbid even shrinks), see Japan, Denmark, Switzerland, EU central bank interest rates right now and for the last decade..
This is why our economies have a problem and why everybody wants economic growth.
It's because of an accounting error upon creating it.
Keynes said that the world will learn more from Silvio Gesell than from Karl Marx. That's what he was talking about.
@@joansparky4439 I agree that all money-things are essentially IOUs and that cryptocurrencies are something other than currency as it has existed historically in the context of civilization, and especially developed economies. I view crypto as mere digital assets rather than currency. Like digital stamp collecting.
Essentially nothing has changed since the ancient times: States create their own (central bank) debt money by spending money into circulation and taxing it out of circulation. Banks for their own part create private money by issuing credit which creates equal amount of bank money in deposits. Unfortunately almost nobody understands this nowadays. Instead the commodity money theory (from 1700's ?) remains the prevailing monetary theory among the general public, politicians, major part of the economists and the central bankers.
@@M0stlyHarmless9
Crypto currencies that are mined and have a finite amount are like metal commodity currencies.. with the same problems as those and not solving the problem of zero lower bound of contemporary fiat currencies.
E-Gold. Without the intrinsic value of gold. LOL
What an moronic idea.
When we got rid of that (Bretton Woods) we left the deflationary death spiral behind.. good riddance.
And these cryptos bring it back. SMH
And that's why they work like digital assets and not as a medium of exchange, you're completely correct.
Money comes out of an incomplete exchange of 'resources' (product).
One party surrenders product and the other gives a promise in return.
The promise is debt, ie. I owe you this and that. The one who does that is the debtor.
The creditor is the one who believes the promise and accepts it instead of product.
If he can hand that promise to a third party that also believes in the original debtor keeping his word you get modern fiat money.
But the debtor never exists for infinite times.. this means the validity of the promise never is forever.
This is where DEMURRAGE comes from.
Even Gesell didn't see it that way.
What Bretton Woods didn't solve was the zero lower bound problem which stems from the ignorance of the limited lifetime of the currency (debt) issuer.. in the case of government issued fiat currency this is government.
But in the case of you and me it would be you and me.
The USA had private issued currencies before the Federal Reserve Act.
In the Constitution of the USA it even states that the Government may participate as a source of currency, but not be the only source for it.
Fascinating video! I've come across bits and pieces of this history so it was great to see it all synthesised in this presentation. The insight that anyone can create credit 'out of thin air' was a crucial one for me, and it was great to see it expanded here with a logical progression in the historical example. Thanks!
This was a really great overview of Medieval European banking. I have been really enjoying your content, can't wait to see more.
This and other videos of yours are invaluable to me! I've wanted to understand the fundamental nature of money for a long time and I've even finished a minor in economics as part of my studies, but that never really addressed my questions about money. With these videos I'm finally starting to get a picture.
If I may suggest, the editing could be slightly more relaxed occasionally. For this kind of information heavy content having a bit more space between some cuts would allow the viewer to absorb and process the input better.
But overall fantastic stuff and please keep making more!
Thanks! I figured the barter money system is covered well.. but the origins of credit money have hardly received the attention it deserves.
Hmm yes I see. I noticed as well when editing ... but it was a bit tricky for me to get a feel for after hearing / seeing my own story over and over again (as happens when writing / editing) ... I will keep it in mind next time :)
@@MoneyMacro love the videos, but have to disagree on the pace. This video had my attention the full 11 minutes which I think is the most important in the current RUclips landscape. 15 minutes also wouldn't make it 'bite size' anymore I'm afraid.
As a young uni student (sociology), just getting into economics, your videos have got to be some of my favorite on this platform! You are a good communicator, yet you don't shy away from diving deep and telling some of the more untold stories of economics. Economics is always portrayed like it's math, and while math is of course an important tool of economics, it is really a kind of sociological or anthropological field and I think you are very good at incorporating that human side, so it doesn't all become tables and models in the abstract. Keep making these and I'll keep enjoying them!
Will do ☺️
Recently found your channel and instantly subscribed. Amazing content! Please do more response videos / correcting the record. It’s super interesting to walk through common misconceptions with a concrete example. There are tons of videos you could review and they would probably perform well too! I don’t see it as drama or negative, I think the channels you talk about are well intentioned but everyone makes mistakes!
Yes. I will make it a 'series' along with my original content.
@@MoneyMacro can’t wait!
This feels like an explanation of the Spice and Wolf anime, which also covers the mechanics and factors of trade. Thanks for explaining the links between trade and credit! It builds on what I've read in textbooks about consumption smoothing. :)
Absolutely loving your realistic topic selection. Please don't give in and start making "viral economics" videos - ok maybe just a few for the algorithm.
Great vid, professional quality, happy to see your channel grow!
Thank you!! Me too
You're videos are helping a simple village boy like me gain some clarity on how money evolved and how we can use it to our advantage. Thank you.
Another amazing video. I really appreciate the fact you have taken the time to tell the history as well.
Thank you! Very glad to see you back in the comment section. I've always been a huge econ history fan.... the Athens video didn't do very well... but, I figured, I'd give it another shot :)
@@MoneyMacro I got into economics because I wanted to be able to understand history better so I'm a bit biased.
Fantastic explanation and history lesson. Thank you for creating quality videos like this!
The word "bank" originally meant "bench" and comes from benches in Venice where early money exchangers were sitting :)
Another product of late medieval are shares and investments. Italian city-states became extremely wealthy thanks to trade, mostly in the Black Sea and East Mediterranean, where they could buy exotic goods and then resell them at higher prices elsewhere. But the problem with this was that it required a lot of money to purchase those goods and most ship owners didn't have that money. Therefore before going on a trip, they would sell "shares" of future profits on the docks, and people would buy shares based on their trust in ship-owners knowledge of prices and demands. Since there was always a possibility that a ship would sink in a storm, be looted by pirates or enemies, investing a lot of money in a single voyage was risky so people preferred buying smaller shares in many different ships as that minimized the risk. It's pretty much the same basic principle how modern stock market investment works.
I've now watched every video on this channel. The content can't come fast enough. It's been 3 weeks and I'm starting to come unhinged.
Hehe me too. I've been on a holiday for two weeks... But, I am actively working on the next two videos :)
Amazing content, as always. So happy that your channel is taking off!
these are the kinds of videos im looking for on youtube these days, excellent work and thank you for your effort!
You are very welcome
Thanks!
This channel is amazing. Keep up the good work.
Thanks, will do!
Reminds me of my malfeasance and misbehavior financial history module.
Another wonderful video! Moving to NL soon; hope to somehow bump into you to ask for an autograph
Thanks Joeri, it's Always wonderful listening to cleber people just as you, I appreciate your activity.
Honestly this just shows how reliant we were on derivatives contracts for much of European history. It also shows how we sort of had fractional reserve banking.
It wasn't even fractional. The merchant and banker only exchanged contracts, not coins
Credit being the original medium of exchange in customary and informal economies never occurred to me, at least not in those terms. But it is so true.
This Video has a very favorable Exchange Rate between invested Time and valuable Content.
Debt: The first 5,000 years by David Graeber is a must read on this topic
Thank you. Your video has always been very informative.
Great channel and greetings from Singapore!
Historical and comparative economics on the same channel? How could you not love this guy
Honestly this was one of the most interesting economic history videos I've seen in a while.
Very happy to hear that!
This is an amazing explanation. More people should see this
love this channel so much now that I've graduated from university. Nice econ 101 on interesting topics.
Shorter videos and consistent uploads, and great content!
Incredible channel, I hope you blow up, your stuff is gold and is better than all the lecture of my bachelor in economics put together
Thank you so much for making this video.
Glad it was helpful!
Represeting the city of Brugge (Bruges).
Love your videos, great to learn some economics and most of what you say we learned in school. Nice bit of history and economics
Damn, you have some pretty advanced schools in Brugge.
The first words you spoke in the video were "What is money?". I watched Hidden Secrets of Money (sorry if this is like advertising) and the answer the presenter gave was:
Money is:
1. Unit of account
2. Medium of exchange
3. Portable
4. Durable
5. Divisible
6. Fungible
7. Store of value (over a long period of time)
Currency was 1-6 and not a store of value. The conclusion was that gold and silver, when minted and high in purity, was real money. Would this be agreeable in your understanding/beliefs of economics? Do you think we've figured out the best way to attach value to goods/services/labor/etc?
Thanks a lot for the work you're doing! Will definitely become a patron to support you when I start my new job, I think this is very important and educational content.
Once again, great content
Nice informative video. It persuaded me to subscribe.
This was way more confusing than it had any right to be. Excellent video!
Thanks for the content
My pleasure!
Quite simply the best economics channel on RUclips.
Thank you!!!
Well done, need a video to send people to explain this, you do it well. I point out to people that most business is done the same way that banks work... you open an account with a supplier that might give you a £5000 credit line - which is just numbers entered on a computer... procurement "withdraws" goods and materials against this account, with accounts paying it at the end of the month. Banks do the same thing, but they supply money, which they buy from the treasury for the face value of that money. A small amount of this pays for the minting of the coins/notes, but the rest goes into the treasury.
Great video, though I’m not sure if gold has “intrinsic value” given the amount of value derived from it actually being used in producing goods is a tiny proportion of its over all price
Hehe, I do indeed think that if you start diving into 'intrinsic' value ... It might get 'uncomfortable' rather rapidly
Gold is basically finite, unforgeable fiat.
@@derherrdirektor9686 never heard of coin clipping?
There is no such thing as intrinsic value. Value is always derived from the usefulness of something, be it for trade (fiat money) or for producing goods. The latter also only relevant when the produced goods themselves provide a value to someone, i.e. are "useful" (in a very loose sense of the word). Hence, yes, gold has not much more intrinsic value than bitcoin or fiat as its primary usefulness is derived from being a store of value, which itself is a collective belief just like with fiat. If you want a currency that approximates intrinsic value as closely as possible, it would be a daily necessity as food. Then you're not just relying on belief but on the fact that people don't want to starve.
I always liked the English wool trade as an example of economics of those times.
This is a lesson the bitcoiners should take to heart. They seem totally oblivious to the role of credit in fiat currency.
Made me invest more in the tecnhology
No, they aren't. Credit plays a huge role in DeFi.
Credit is fine, it's the bundling of garbage debt and selling it as prime debt that is problematic, remember 2008-09?
Also, in the system described in this video, every single unit of credit can be converted to gold, and the amount of gold you get does not decrease over time (like it does today) - the credit was denominated in gold (not fiat) and it did not inflate.
@@xhelloselm No it doesn't, at least not yet -- credit requires a reputation system, defi lending is over-collateralized, if it were under-collateralized the risk the lender is taking on is credit.
One could build a credit system on top of bitcoin, the same way the bretton-woods system was credit built on gold. Fiat currency is broken because lenders can create an infinite amount of credit, the clearing cycle is for those who take on bad debt but also those who issue it. Debasing the currency is a symptom of a declining state. Credit creators lose credibility.
Great stuff! Thanks again.
You began with the question "what is money", but instead discussed only forms of money, rather than the content of money itself. Yes, gold, silver, bills of debt, bank notes etc. are forms of money, and forms always create illusion of being the actual content itself.
But I liked your video for its historical view on credit-money.
good stuff my man
Appreciate it. I figured, there is so much out there on barter money. But, very little on credit money.
@@MoneyMacro could you do a little more about the bill of finances and the bill of exchange? That's something I would love to learn about
Lots of things _have_ been money or are currently money, but, to me, the really interesting question is: "what is the best form of money?" I would answer that with "true ledger money", that is to say a digital currency that is _fully backed_ by itself aka full reserve banking. The best example today is central bank reserves.
In other words the evolution of money printing! Nice video btw!
Hehe you could say that. Private sector 'money printing' though
@@MoneyMacro oh yeah since this isn’t organized by the central banks.. I was wondering if you could do a f/up video on the advantages and disadvantages of credit money in modern times or how to grow wealth with credit money. Thanks
Why weren't you my economics lecturer when I was at UCT?
Really enjoy your videos, bud.
Aiii hehe to bad we missed each other. Miss Cape town for sure. All the best!
Great video!
Im absolutely loving your channel! Thank you for the diligent research; Would love to hear you talk about CBDCs! Take care yo
Thanks!! And yes me too. Many other videos planned first. But, they are definitely on the list.
It's essential for everyone to know about the history of money
I like the video, I think I need to watch it again to understand it though. I agree with another suggestion that giving a bit of a break or giving a bit more time to examples, that would be nice. Thanks!
Great video, as always!
I'd love if you could do a video on DeFi, and how/if that is going to change the banking system as so many claim.
Yes! I want to do a crypto from monetary perspective video. I think defi should be in it!!
@@MoneyMacro Looking forward to it! Thanks again for the awesome content!
Great video! Sure, credit = promises and confidence, which has always existed. It is worth mentioning economic bubbles, when it comes to credit and IOUs. Gold or silver are simply means to prevent bubbles and secure confidence if doubt in the financial system occurs. During good times people love credit, and during a financial crisis typically caused by a bursted bubble, they return to gold and silver and other commodities. The Silicon Valley bank is just the latest example.
Hi Joeri. Any thoughts on "Debt: The First 5000 Years"? I'd be very interested in a video discussing this.
Haven't read it yet. I think it is very much in line with this video though. In that it recognizes that credit money is ancient and has always been very important.
@@MoneyMacro I think it complements your point about how commodity money is much easier to rationalize, so it can be easy to put it on e pedestal and think of it as the only "real money". Meanwhile, it seems like the economic systems we work in are more dictated by natural laws than our own design or intentions. Because of this, something more complex like credit money can occur and be used successfully without the participants needing to understand or rationalize it.
At least, that is my take as someone who studies economics very casually. Thank you for the videos, by the way.
I love your videos, thanks for your hard work.
Just a tiny suggestion about the speed of the clips, they are changing to rapidly - personally I'd enjoy watching one longer. But that's just my annoying opinion 😃
Thanks yeah I think I was a bit too enthusiastic in the middle of the vid . I'll keep it in mind
Naturally, Princes' coins are debt/credit money also. A Prince mints coins to pay soldiers and clerks, etc. The value of the coins is not because of the weight in metal but because the Prince demands payment of Taxes in these same coins. Tally sticks are also used in England. Clipping, melting down and otherwise defacing Princes' coins was punishable. Minting your own imitation Princes coins was also punishable (called counterfeit), regardless of how much metal was involved. Basically a Princes coin represented a promissory token by the Prince that your tax debt to him could be settled with a sufficient quantity of these tokens.
May I suggest a few square meters of sound panelling on the wall behind you... The cheap stuff will do just fine.
If you look at everything from the perspective of risk the purpose of commodity money is a zero risk money. All types of credit carries some risk and are therefore not appropriate in every circumstance.
Although you do have the risk of fluctuations in the underlying commodity right?
@@MoneyMacro yes indeed! But through the most of History gold and silver were pretty stable. So I suppose it is not actually zero but very low.
Spain after plundering the new world would be the great exception
@@ErikHare one way of putting it might be that with commodity money you have very little risk that someone abroad will not accept your money. In the sense that, in Medieval times Medici money might have been widely accepted in major cities, but you could use gold coins in many smaller cities as well (perhaps you didn't get the best exchange rate, but still).
@@MoneyMacro yes indeed. It all depends on your appetite for risk and your immediate needs. If you are going to Market to sell your produce and you need 20 ducats to pay the rent next week you are not going to screw around with anything risky.
@@MoneyMacro to get all Adam Smith for a while, what do you have faith in,? People just barely getting by don't have a faith in a lot of things.
I never thought Elon Musk would moonlight as a youtuber, but i am happy to have found out he does!
For a long time countries used silver coins as a currency, mainly due to the fact that the Venetian banking families would not allow it otherwise. Venetians were the main creditors in the middle ages, financing most of Europe sovereigns, and they dictate the terms of paying back the debt. For example large gold deposits were discovered in England in the late 11th century and they wanted to repay their debt to Venice in gold but they didn't allow this and demanded it be payed in wool. Gold became a thing in the 12th century with arrival of Mongols to Europe, who had pillaged and accumulated large amounts of gold. They traded this gold to Venice, that didn't have gold mines, for other products and this is how gold coins replaced the silver ones. This banking monopoly persisted for a long period until Venice was dismantled by Napoleon. But some say that the Venetian aristocracy persists to this day and they have been dubbed the black nobility, a name coined during the era of hostilities between the White and Black nobles (for and against the Pope).
Credit where credit is due: This is a good video.
Very interesting. Would you consider doing a video on the long term outlook of the economics of Brexit? As someone from the UK, it seems hard to find impartial views. I think it's better to find out the likely truth whether it's hard to hear or not.
I recommend Tldr news. A group of UK-based RUclipsrs who provide a really balanced (in my opinion) summary of major news stories. They came into prominence almost entirely due to Brexit.
I'm afraid Youri being Dutch will not be seen as impartial
@@FrancisBehnen I get the sense he's reasonably objective, but even if he isn't then it never hurts to hear the views of an expert.
I'd love to hear your thoughts on the ideas of the development of money/credit/debt of David Graeber in his book 'Debt: The first 5000 years'. It's pretty fascinating and provocative
Provocative in what way?
@@theoutlook55 He was mostly an anthropologist, so he heavily critiques and provides counter-evidence against the standard economic stories of how money and credit developed and functioned in societies at different times
Economists tend to really not like his work.
@@cameronmclennan942 thanks
@@hemiedwards217 Orthodox economists never like economists that provide counter evidence that could potentially break the orthodox economic hegemony
to me, money is supposed to be a solution to the problem created when we could no longer barter trade our goods and services because they advanced unevenly and were no longer considered of equal value-is there any philosopher in history who talked about this?
You're brilliant. This is entertainment that is actually worth the time. Plus the guilt from leaving Heidegger closed on a friday night and breaking open a can of special brew isn't as bad. Thanks for making them. They are always a treat. Would love to see something deeper on the euro as a possible super currency, and your view on the political issues that might gain traction from this, specifically with respect to the US. Don't know if it's true but once heard that Muammar Gaddafi was considering pulling libyan gold out of the dollar and investing it into the euro, and that this was part of the motivation for the invasion of Libya. Might just be bullshit from a night at the pub, but it sort of stuck with me. Have a nice one.
Honoured to hear that. Kinda jealous of the special brew now though.
I want to make a video about the European Union at some point that is similar in style to my Japan video. Eurozone / Euro design will be a big part of that.
Did France invade Libya first though?
0:18 does gold have an intrinsic value? Appart from very limited economical use. I always thought golds value derives from its use as a currency unlike cigarettes for example.
A lot of jewelry is gold.
Cigarettes are sometimes also used as currency. For example, in Russian prisons.
Thank you Sir for this🎉
I would want to see a video on Fractional Reserve Lending that emerged after this credit and banking system.
This already is fractional reserve banking :) since these merchant bankers typically held some metal in reserve to be able to service some deposit holders that wanted to exchange deposits for metal.
Great video
There is a simple counter example which shows that credit didnt arise from or and isnt motivated by classic seasonality problem.
Social contract type corporations. That is, the hunter and farmer both agree to work the land and share the produced goods over time without defining what belonged to whom.
This does not require property, credit or mediums of exchange at all. This kind of cooperation is a far better description than calling it debt and credit.
Debt and credit rather arose from taxes, ie as agreements forced upon another are sufficiently adhered to by the more powerful party for long enough to establish contract adherence as a societal norm.
We can also see the usage of credit money in ancient Mesopotamia one of the first civilizations. Traders would go on a caravan for a over a year, but won’t have enough money to buy the goods, so that they can later sell them nor would they have the goods. So they borrowed and took a credit or promised to share the profit. In the meantime those investors when they were in need of money, they sold their credit promise to another investor. The first derivatives emerged.
I've always been a believer that when it comes to economic, whether the core idea is good or not is no where near as important as how it's implemented. I've seen a lot of videos where people try to argue that we should go back to the gold standard, but we were on it for centuries, we still had problems, and we still arrived at the system we had today. They tend to respond with if we can fix the problems we had with the gold standard it would solve everything, and yeah that may be true, but how does that not apply to the system we have today?
The gold standard limited credit creation and therefore spending it cannot exist today as it would limit the power of governments.
@@geraldg350 In theory yes, but they'll just end up doing what they did in the past: mix it with other metals and dilute it, leading to inflation. In the end, you just end up back at the same problem: how to make sure the currency is managed responsibly, and all the solutions I hear proponents of the gold standard propose, end up applying to fiat currency, as much as they do to gold.
@@jacob_90s you're right metals just make devualation harder but it still happens in the end. So the problem is isn't the tools fiat or metals but rather human nature propensity to consume more than they produce and neither fiat nor metals solves this fundamental problem.
Hi Joeri. I've direct a question for you regarding your response to EE's video on hyperinflation, perhaps you missed it :D
Anyway, I'm starting to learn more about macroeconomics as a beginner (I don't have a background on economics or finance whatsoever), could you recommend where to start? Perhaps what books to read, or what journal to follow?
Another insightful content coming from you btw, rhanks for the education!. Love from Indonesia!
Hey, yeah I missed that. Check out the links in the description to some of my favourite books :)
Well explained.
Also see the anthropologist David Graeber and Prof. Margrit Kennedy about it and Helmut Creutz and Prof. Wolfgang Berger from Germany about Silvio Gesell.
Hello Joeri! Can you make a video on the different housing markets throughout the world?
Yes. I want to do a bit of a deepdive on that... the consequence will be that it will take a while to produce. So, hang in there :)
Fascinating video ! I know you are an economist not a historian, but it would've been nice if you had included specific dates or time periods of when each step of the banking evolution took place. Great video nonetheless !
The source didn't have dates. I think we don't know exactly
I'm reading a book right now called The Verge by Patrick Wyman about the time period 1490-1530.
He argues that this period is the start of large scale proto
-state debts in Europe.
Money is command over labor. That labor can be dead labor materialized in the form of created commodities, or it can be the ability of the issuer to command future labor with... whatever it is, as long as enough people use it that way.
Our finance professor recommended this video for us to understand the bills of exchange concept. Yet I have learned different thing than bills of exchange, the credit theory of money. Is there any book you can recommend about this discussion. Thank you so much for the video.
Very happy to hear that.
My main source for this video was actually the book: A Financial History of Western Europe by Kindleberger.
Some other sources are linked here in the script: www.moneymacro.rocks/2021-08-27-medieval-europe/
Hope that is helpful :)
Great video!Is this lore explanation for Wolf and Spice?
(,Joke aside,the first book is a really good starting point for young students
Very interesting video
Appreciate the content you're putting! One video suggestion that I have is to talk about the behavioral aspect of Bitcoin's deflationary nature in the event that, as its proponents say, it does realizes its potential as both a currency and store of value.
I has heard that local markets in ancient China were making use of credit longer ago than even the Greeks or Romans. I'm not sure if it reached the level of credit money, and at least some of the systems weren't fungible, as they were tied to the issuer's identity. Nevertheless, the existence of credit tokens as a carrier of exchange that far back speaks to the core feature of money being widespread acceptance as money, not some abstract notion of intrinsic value. What makes commodity money money is just that a sufficient portion of the population agrees it is in fact a commodity! In a sense, credit money *is* commodity money, it's just that the commodity is trust/social acceptance itself!
Great video. One suggestion for improvement: medieval Flanders territory is different of currentday
Yeah hehe it was a technical issue. This way I could let an algorithm determine the borders.... Otherwise I had to do it by hand ;)
There are different types of money but ultimately money is a unit of work that can be exchanged between participants of an economy.
To add to it, you need to trust that people actually do the work to receive money and that no one can simply create money without any effort.
Super video on Money and Credit system. Can you please make video on China Economy ?
Yes, I am planning one.... But... Will take a few months at least (very tricky subject for a Western economist to cover and I want to do it justice)
In the first example, does the traveling merchant use the bill of exchange to buy goods from the Flemish merchant?
If so is the Flemish merchant contracted with the money changing families to accept bills of exchange?
Or is it that the travelling merchant sells a bill of exchange for local Flemish currency and buys the local goods using this currency?
In the first example the smaller Italian merchant trades with a 'big' merchant that has offices both in Italy and in Flanders. So the bill of exchange denominated in Deniers is used to pay for goods in Flanders from the big international merchant.
@@MoneyMacro ah, that makes sense thanks
I am watching the video and got a bit confused when at 4:23 the Italian merchant was represented but Van Eyck painting (big hat man) so I assumed he was from Bruges and had to watch again. Okay, checked for the portrait - the name of the man is Arnolfini, and he was of Italian origin, but he spent most of his life in Bruges,, so wasn't really crossing the Alps so much, maybe just slightly misleading.
Great video - just wondered the role of the Knights Templar ?
Yeah they played a big role before this in facilitating money transfers from Europe to the middle East and then a basically became a massive banking organisation. Left it out here for simplicity. Would warrant its own video
Since a hunter and farmer are typically part of the same community, their arrangement can also be classified as reciprocity. I hate that economics glasses over the most fundamental form of social exchange, they very foundation of friendship, family and community. It’s like anthropology 101 too.
the castle on a hill at 5:43 is Nürburg
Very interesting video, but do economist really think that deferred payment is conceptually equivalent to a purchase on borrowed money just because both can be called credit? Or that's just your opinion?
Thank you👍🏽
very good; thank you