Money & Economic Foundations
Every fix came with a new dependency.
Nobody invented one perfect money. Different forms appeared in different places, often side by side — each one solving what the last couldn't.
The problem
Now move that payment 500 km.
You owe a large sum to a merchant in another region. Pick what you'll carry.
🛣️ A long-distance settlement
TRIED 0/3Choose what you'd take on the road.
Value that is the goods has to physically travel with them. That's the wall every pre-paper money hit — and it's exactly why paper claims caught on: the paper itself was barely worth anything, but it was far lighter to move than the metal it stood for.
The definition
Three ways money can be backed.
Every form in the history belongs to one of these.
Hands on
Walk the chain.
Each step fixed the one before it. Watch what it cost.
Direct barter
EARLIESTWhat it solved
What it now depended on
The break
1971: the last anchor is cut.
After the Second World War many currencies were tied to the US dollar, and the dollar was convertible into gold for foreign governments.
The chain that held it together
Gold sits at the end of the chain, so every currency along it inherits a limit.
Check yourself
Five questions.
Answers come straight from this lesson. Submitting completes it.