Good article. He is replacing excellent logic with experience however.
Paper money took the place of trade goods and metal because metal failed the portability test he cites along with other trade goods.
It also fails a forgotten test- stealabilty. In the days of bandits, which means all human history, it was not practical to ship gold on horses around the country. It was often stolen.
The rich gave you paper instead.These debt instruments could be redeemed only by you with the nobles so were not useful to steal.you could get a new one from the King if that happened.
You can test his logic by trying to spend a gold coin or a silver bar at the store today or a thousand years ago, and report back on the usefulness of shiny metal as money.
This is esp. true in that famine he mentions. Try handing a starving person a cup of shiny rocks or crystals he can not test instead of a cup of grain.
He mentions that there is not enough grain in the world without noticing that there is a lot more grain supply than gold supply out there.
Neither is sufficient or safe enough in the huge modern world. Numbers on paper and computers are safer, and are the only money supply large enough to work these days.
Even now I do not carry much money when I travel. I get it from machines as I go.
Still too many bandits.

Last edited by Dane; 11/02/12 01:52 PM.