I love this – the modern history of money in 315 words:
“…On a desert island gold is worthless. Food gets you through times of no gold much better than gold gets you through times of no food. If it comes to that, gold is worthless in a goldmine, too. The medium of exchange in a gold mine is the pickax.
Hmm. Moist stared at the bill. What does it need to make it worth ten thousand dollars? The seal and signature of Cosmo, that’s what. Everyone knows he’s good for it. Good for nothing but money, the bastard.
Banks use these all the time, he thought. Any bank in the Plains would give me the cash, withholding a commission, of course, because banks skim you top and bottom. Still, it’s much easier than lugging bags of coins around. Of course I’d have to sign it too, otherwise it wouldn’t be secure.
I mean, if it was blank after “pay,” anyone could use it.
Desert island, desert island…on a desert island a bag of vegetables is worth more than gold, in the city gold is more valuable than the bag of vegetables.
This is a sort of equation, yes? Where’s the value?
It’s in the city itself. The city says: In exchange for that gold, you will have all these things. The city is the magician, the alchemist in reverse. It turns worthless gold into…everything.
How much is Ankh-Morpork worth? Add it all up! The buildings, the streets, the people, the skills, the art in the galleries, the guilds, the laws, the libraries…billions? No. No money would be enough.
The city was one big gold bar. What did you need to back the currency? You just needed the city. The city says a dollar is worth a dollar.
It was a dream, but Moist was good at selling dreams. And if you could sell the dream to enough people, no one dared to wake up…”
From metallic currency to bills of exchange to fiat paper money in 45 seconds flat. Hidden in the satire is a pretty intelligent exposition of money and our illusions about it. The timing of the publication (late 2007) was exquisite, and it even has the Discworld’s version of the Keynes analogue computer.
Highly recommended for a fun and non-technical look at the nature of money.
Pratchett, Terry, “Making Money”, Corgi Books, June 2008