Planet Money
Summer School 1: An Economic History of the World
Jul 10, 2024
Rebecca Spang, an economic history professor at Indiana University, and Jacob Goldstein, a former host and author, dive into the origins of money. They explore the unique stone currency of Yap and how collective belief shapes value. Their discussion then shifts to John Law, a Scottish gambler who revolutionized France's monetary system with paper money, only to face a dramatic collapse. Listeners are invited to reflect on how these historical events inform modern economic practices.
34:05
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Quick takeaways
- The podcast explores the historical evolution of money and its essential functions as a store of value, unit of account, and medium of exchange.
- John Law's innovative banking concept in France in the 1700s led to economic growth but collapsed due to unsustainable stock prices, emphasizing the significance of trust in financial systems.
Deep dives
John Law's Introduction of Modern Financial System
John Law, a gambler from London, escaped to continental Europe and presented a revolutionary idea to France in the early 1700s. Law proposed the creation of a bank that issued paper money backed by gold and silver, a novel concept in France at the time. This bank was the first of its kind in the country and changed the way people interacted with money, leading to economic growth and prosperity.
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