their loans.

Where credit is abundant and relatively cheap, borrowers spend beyond
their incomes, hoping to pay later when the loan falls due. Borrowing
and over-spending are among human frailties. They are also forms of
risk-taking or gambling. Who knows whether the banker who promises to
pay on demand will be alive and doing business next week when his
promise to pay is presented for settlement? When the promise to pay is
issued by a government which decides the value of currency, and accepted
by that government as payment for taxes and other obligations, it is
more readily acceptable than paper issued and guaranteed by an
individual money lender or banker.

Each civilization has had a background of simple use economy--food
gathering, animal husbandry, agriculture--in which most of the people
produced what they needed and consumed what they produced. Such an
economy employs money rarely.

In a money economy those who have cash use it to pay their bills or
settle their accounts.

Those who buy on credit pay interest to money lenders. The money
lenders, later the bankers, make their profits by helping others to
spend beyond their own means. The money-lender also accepted loans from
others, promising to pay them back at a later date, and giving the
lender a piece of paper, specifying the amount of the loan. The paper
promise to pay became a bank-note, passed from hand to hand. It had no
intrinsic value, but as the money lender promised to pay cash for the
note on demand, it was accepted in payment of debts or for the purchase
of commodities.

When a shirt-maker turns out a product and exchanges it for a pair of
shoes made by a shoemaker there are no overhead costs. Each producer
adds to his wardrobe an item that makes his life more satisfactory.

Examples of simple barter are seldom found in market economies.
Civilized society assembles quantities and varieties of goods and
services in the market place, invites consumers to choose among the
wares and provides money to make transactions quick and easy. Civilized
society supplements money with credit on the principle: buy and use
today; pay tomorrow. Civilization goes beyond these bare essentials of
merchandizing by furnishing transportation and communication, making
long term loans at interest, writing insurance, developing the
techniques of accounting and management. Customers who visit the market
have basic human needs--the necessities of life. Beyond these
ne