Whatever its complexity, an economy stands or falls upon very basic foundation stones. Individuals must be free to think and act on their decisions.
They must be able to gain the rewards of being right and must bear the cost of being wrong.
They must be able to concentrate on what they do best, and what they most enjoy doing, instead of spending their time providing for their immediate wants.
They must be able to make provision for the future by preserving a portion of what they have produced.
In short, they must think, they must produce and they must save.
And to do that to the greatest and most efficient extent possible, they must trade with each other.
A person alone in nature can certainly think, act, and gain the rewards of being right or bear the cost of being wrong. He can also, by means of great effort, put aside savings, but only for a limited period of time. Indeed, anyone alone in nature has no choice but to do these things, if he is to survive at all!
In our advanced economy, physical survival is not often an issue. But all the imperatives which confronted Robinson Crusoe still apply.
The extent to which individuals can think, work, produce and trade freely determines the potential of the economy. The confidence with which individuals can save and invest long term determines the prosperity of the economy.
To save, invest, and plan for the long term is a luxury not granted to anyone alone in nature. It is the exclusive preserve of those living in an advanced economy.
Finally, an advanced economy must, by its nature, be one in which there is indirect exchange, using money.
In the place of the seed corn and the week's supply of food, there is money.
In the place of labouring all day to procure one's immediate needs for food and shelter, there is money.
In the place of never being able to rest on the fruits of past effort, there is money.
In the place of being at the mercy of nature or dependent on the nature of mercy, there is money.
That is what money does!
The evolution of any civilized society is dependent on the discovery of the idea of money, and on the discovery of something that can be used as money.
The future of any civilized society is dependent on the quality of what can or is used as money!
