 Well, good morning everybody we said we would start at 955 so we shall Like to thank you all for being here. I recall last year was a beautiful sunny spring day and today's a little more gloomy So feels like a little bit better day for an indoor event. We got a good crowd here this morning and we Are anticipating excuse me anticipating a couple of hundred online viewers both high school students and home schoolers, so we are glad to have our online audience this morning and We'd very much like to thank the Tatum family for their financial support of this event this morning So as many of you might know One of the founders of this building and this institution's names Murray Rothbard passed away in the 90s But he's a famous economist and he had a quote That is also famous. He said it's no crime to be ignorant of economics Which after all is a specialized discipline that one that most people consider to be a dismal science But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in the state of ignorance So to paraphrase Murray, you know, this seems to be a condition that we have throughout America today Everyone thinks they're an expert on everything We're flooded with information and data through the internet through social media, etc So we have information, but we don't always have understanding and I'm sure some of you raise your hands if you're not but some of you are truly familiar with TED talks This is a series of talks given by I'm going to say sort of trendy thinkers Put on by a nonprofit organization. Ted talks have actually existed since the 1980s Ted stands for technology entertainment and design I've heard or I've read Ted talks referred to and this is a little this is a bit much So you're gonna have to understand where I'm coming from I've heard Ted talks referred to as soul nutrition So that seems a little a little over the top for me anyway, because of I I view Ted talks with a little more jaundice I perhaps But Ted talks to me are proof that you can have a speaker Who's brilliant? Highly intelligent who's exceedingly knowledgeable about their subject who's very well-intentioned He was very well spoken gives a really dynamic presentation on a particular topic a speaker who can be all of these things and still be spectacularly wrong That to me is what Ted talks often stand for In other words, there's a certain vanity to Ted talks that the speakers in the topics They tend to appeal to current popular thinking the thinking of the day the zeitgeist you might say of the age and In doing so they really try to appeal to a mindset that says we're sort of an insider or hip audience And I think in doing so Ted talks are actually almost incredibly conformist I Think that Ted talks oftentimes make the fatal error of trying to capture that just the thinking of the day and to shape the thinking of the day rather than addressing the fundamental or timeless knowledge and wisdom I Think I think one of the Roles and one of the goals of the Mises Institute is really to stick to fundamental knowledge and wisdom that stands a test of time so all of you as you make your journey through High school and college Time and youth are on your side So whether you're studying economics our topic today or any other topic I would really encourage you to ignore trends ignore trendiness and Develop and start to build an intellectual foundation for yourself that'll stand the test of time that'll last you throughout your lifetimes So ignore trends and This oftentimes means some hard work Unfortunately, it means that whatever topic you choose or have an interest in or major in you have to read the classics You have to read the foundational fundamental texts of that particular discipline In other words, you might have to read some Aristotle if you're interested in philosophy and not just to learn about philosophy from some guy on YouTube You might have to read both sides or all sides of a particular topic if you take one of our PhDs here in academics and Excuse me in economics here at the Mises Institute at Joe Salerno and Mark Thornton You know these gentlemen have read plenty of Austrian economics, but they've read plenty of Marx They've read plenty of Keynes as well So this is really something an obligation in front of you if you're going to choose a field or discipline You have to be very well read on all sides of that particular discipline And again, you have to do some hard work. You don't be like the person in This slide that Willy Wonka is addressing You can't learn philosophy necessarily from a TED talk and you can't necessarily learn science from the New York Times So I think Willy Wonka's point here is that you're talking about something like climate change and weather you're talking about Topics that are deeply complex and that people study for their entire lives So it's fine to have an opinion or thoughts about global warming We all should but what perhaps is not fine is to is to develop an opinion on global warming based on an 18 minute TED talk or based on 10 minutes of reading of a New York Times article So with that said We'll go ahead and introduce Mark Thornton the aforementioned Mark Thornton Who is one of our senior fellows someone who's been here with us for many many years? He's a professor of economics both at Auburn University and at Columbus State in nearby Georgia and His topic today is development of money and the development of human society from barter to Bitcoin So a round of applause for Martin, please Thank you Jeff, it's a pleasure to be with you here today. Thank you for coming Thank you for tuning in on the internet to this fine conference on sound money You know money is a really weird thing Everything else has sort of unique properties, but money is just everywhere and so we we see people going out to restaurants to hardware stores to church and They go in there and they talk to perfect strangers and those perfect strangers give them food give them clothing give them tools to work with and Then money is exchanged so every day we're out there going around exchanging our money For goods and services and then we're going to work in exchange for a paycheck Money is the one and only thing that everybody uses You know, so some people like to wear bow ties other people like to wear regular ties other people like to wear no ties But all of them use money So money is a pretty unique thing in Our world in our life It's also associated with a lot of our problems Not enough money Too much debt can't pay the debt Employers don't have enough money. They have to lay people off Prices go up the price of gasoline goes up to four dollars a gallon Causes a problem. What we're going to see here today in a few very brief minutes I'm just going to be covering the time span from the Stone Age to the present But we're going to look at how money has been very important for the development of human society The world we live in Exists because We have money So given that Given that we all use it we use it every day for everything we do Practically now, of course, you don't have to you didn't have to pay money to come to this So that's a little bit different But a donor actually paid money So that you could be here for free Because they thought that what we're going to teach you here today is so darn important So everybody in here I've calculated has had at least 10 years of education Some people in here have 15 years of education as many as 20 years of education So if money is all this then You would think that you would have been told and retold and tested on The issue of money and who invented it, but you weren't were you? No, you weren't told Who invented money talk about the problems of the education system my goodness So to tell you what money is and why it's this important I'm going to go back to the Stone Age Before there was money there was a time when money did not exist so the caveman didn't have money and Economic conditions were very primitive For people back in those times almost animalistic Your food your clothing in your shelter were things that you had to produce Whereas in here Probably nobody built their own shelter Probably nobody actually made their own clothing and You probably produced very little of the food you consume But back then they had to produce all of their food all of their clothing and all of their shelter and as a result They had a limited range of goods to consume They had very short life expectancies tribes of people were actually killed off on a regular basis due to famine not having enough to eat where everybody in their little societies did not have enough to eat and Existence was characterized by general warfare between these tribes So things weren't good in pre-money society Fortunately people learned to get along and to trade with one another both within the tribes and ultimately between different tribes and This was based on barter. They didn't have money, but they could still trade goods for goods the problem with that The problem with me trying to trade this pointer With somebody else here is that it would be very difficult Probably not too many people want the pointer Permanently, I mean it's fine for you know making the dot go around the screen and things But it would be hard for me to find somebody who really wanted this pointer And then it would be even harder For that person to have something that I actually wanted So a barter situation requires a double coincidence of wants So that this person here in the front row has a bow tie wants the pointer and I just happen to want his bow tie Okay, those kind of situations those double coincidences of wants are very difficult to discover But when they are discovered We do know that both parties to the exchange are going to be better off. I want the bow tie He wants the pointer. We agree to that situation We make the trade and we're both better off. I'm better off because I've given up the pointer But I've got the bow tie. He's better off because he gave up the bow tie, but he really wants this pointer So that's a good thing We end up getting access to more goods different goods and Also people who are making trades on a regular basis tend to start to respect each other's property Okay, if you're providing me with a benefit every year and I'm providing you with a benefit every year by making these trades Then I'm going to tend to respect your property not want to invade you and kill you and enslave you And you're going to have a similar type of respect for my property rights and under these conditions of respect for property rights Parties these different parties these different tribes can start to specialize in what they are Proficient or efficient at doing and So societies can start again to specialize and to divide the labor between each other and We spend more time doing what we're good at and less time doing what we are inefficient at We can divide up the fishing the hunting the gathering the farming between different individuals and indeed between different tribes and As we start to specialize and Divide up the labor in society We can also With the help of saving to develop better tools to use better tools for digging better tools For hunting for fishing We can make nets for fishing we can sharpen sticks for hunting or digging for farming purposes longer sticks to Gather fruit that it's high up in the trees. And so that's what happened in society many many years ago People started specializing people started dividing the labor up within the tribe and between tribes They started to develop metal excuse me better tools and eventually they discovered the use of metal tools and It was this trading the specialization this discovery of better tools That allowed the standard of living to rise To produce more food to produce more clothing to produce better and more shelter To stabilize society and to reduce warfare between societies So an example of this more advanced barter situation Would be say I'm raising cattle and I'm specializing in the raising of cattle I've got so many cattle that I could really use a shovel So I go to the blacksmith and I said, you know, I'm interested in acquiring shovel for you And I have cattle in exchange, but certainly a cow is much more valuable than one shovel So would you mind giving me four shovels for one? Cow and the guy says well, I'm not gonna give you four, but I'll give you three and I say, okay Now what must I be thinking? To agree to give up one of my cattle For three shovels Surely I can't use three shovels at one time So I must be thinking what any ideas Perfect trade the the extra shovels for something else I could trade one of the shovels with a beekeeper that I know for a gallon of honey possibly maybe not a whole gallon And I know this other person who's a weaver who I can trade one of the shovels for To obtain a blanket And so what I've done is used those shovels As a medium of exchange I'm facilitating The exchange of the cow that I don't really need for the shovel which I do really need Because of all those cows And I'm gonna I know in advance that I've got a good chance that I can trade one of my shovels for honey And one of my shovels for a blanket so I've used the shovels As really a medium of exchange Which is an intermediary that is used in trade To avoid the difficulties of barter if I relied only on barter I wouldn't have been able to discover A valuable trade for both me And the blacksmith the blacksmith would be happy giving up one shovel For one cow, but I wouldn't But I would be happy to get three knowing that I'd end up with the shovel for farming The gallon of honey for sweetening And The blanket for warmth So that's the medium of exchange And as we developed as society developed Basically what happens as we move from a hunter-gatherer society To a sedentary agricultural and domesticated animal society So instead of moving around killing wild animals Uh gathering nuts and fruits And having to move constantly In order to find new sources of animals nuts and fruits We can now stay sedentary stay in one place Engage in agriculture the growing of crops And raising domesticated animals So we have a constant source of food And societies do not tribes do not die off Because of famine, but they become larger and more productive and more interactive And so mediums of exchange In these early societies included various types of animals such as cows and sheep various types of grains Which could be stored Salt Was an early medium of exchange Because there was no refrigeration The only way to preserve most foods Was with salt and so everybody used salt in large quantities So if you traded for salt, you knew you could always retrade the salt for the things that you wanted Later on tools became a medium of exchange. So axes shovels knives and so forth Became mediums of exchange Because there was always plenty of people who wanted These tools because the tools increased your productivity In the early american colonies Uh north carolina, virginia, mariland, delaware, etc They used blocks of tobacco as a medium of exchange So the tobacco farmers would you know sell their crops and The stores would use the Blocks of tobacco to make exchanges for their inventory With people who raised eggs and so forth Um And so tobacco was an early form of money in america And basically what you see happening Through the use of money which allows the specialization and division of labor to take place You see civilization as we know it emerge This is several thousands of years ago in the bronze age basically when this starts to take place When metal tools greatly increased our productivity And we had the specialization and division of labor present So that we could have things like blacksmiths Making these tools And so what we find with the because metal tools were so important metal emerges as an important medium of exchange You could always use bits and pieces of metal to go to the blacksmith if nobody else To exchange the bits of metal for tools for finished tools and other people began to accept metal As a medium of exchange as well Now money is basically the best medium of exchange Whatever emerges in a society as the most generally accepted medium of exchange And the types of things that tend to win out in this competition for the most generally accepted medium of exchange Are things that are durable You want money to be durable. You don't want to to break down or decay or degenerate in any way You want money to be divisible You know, I could have You know theoretically thought well one third of Of one of my cows could equal a shovel But of course if I cut one third off of the cow It wouldn't be very durable at that point. It would start to rot So a lot of these early forms of money other than salt were not divisible It also has to be easily transportable So you have to have a high value In a small sized package And salt really didn't fit that bill because salt, you know, if you know, you talked about Something to exchange for a cow. Well, I mean, you'd have to have a tremendous amount of salt In order to make an exchange of that size So salt really didn't work very well In long distance trading only in short distance trading And because you need those factors Durability And transportability Metals one out In the world wide competition For medium exchange early on it was copper and bronze and then eventually silver and gold Emerged as the most generally accepted medium exchange And really the only thing that worked in terms of international trade And so far we haven't even gotten to the issue of coins But metalsmiths like the blacksmith Started to make these coins about 3 000 years ago Where they made little discs Shaped as what we know is round coins That would be he pound us a stamp into it So that it was easily identifiable as a particular blacksmiths coin And these coins were roughly the same size and weight They were roughly the same composition of metal the early ones were a combination of gold and silver And as a result Of the uniformity of these coins We had for the first time a unit of measurement Or of value for those coined monies and as a result we could then develop things like counting accounting and pricing And as a result civilization could be ever more complex And trade could go ever further distances and as a result We saw increases tremendous increases In the standard of living and some of the early great civilizations emerged As a result In the middle east in egypt and in greece And so forth So coins are like roughly 3 000 years old Banking only came about modern forms of banking only came about In the year um in the 1400s So that's a relevant relatively early excuse me recent Uh development where you could store your money where you could borrow your money Where you could exchange your money from say Greece with Uh the money of egypt or some other place There's an explosion of economic growth as a result banknotes Only came about in the mid 1600s So banknotes were basically receipts that represented an amount of gold or silver So you would take your gold or silver To the goldsmith or the silversmith Where he could safely store it and you would be issued a receipt A written receipt that says you have a certain amount of gold there And as a consequence we had for the first time a form of paper Money that was easily more easily transportable and much safer Now what we're going through right now is of course bitcoin And bitcoin and bitcoin Blockchain technology is going to further revolutionize our economy in the future bitcoin Is sort of based on the principles of austrian economics to a certain extent It came about because of the financial crisis of 2008 And many people think it's going to revolutionize the way we do Money banking and financial services going forward The big advantages of it is Three things it gives you zero cost transactions It gives you zero fraud or hopefully zero fraud and it also gives us a private form of money Rather than a government form of money for the first time in many many years So in conclusion, uh as money gets better Society can get better Money is critical for an advanced complex economy characterized by the specialization and division of labor And monetary problems cause big macroeconomic problems for us all. Thank you very much