You might be curious why we’re spending so much time on the history of trade, money, and other economic concepts at the outset of this financial literacy series. In finance and economics, having a basic understanding of the evolution and history of money and financial tools is key because “those that fail to learn from history are doomed to repeat it,” as Winston Churchill famously wrote.

So here’s the key point: if I hold money, I’m holding someone else’s debt. In our simple economy, in the spring, fur pelts and meat are sent to FruitLand in return for money. Then in the fall, fruits and grain are sent to ProteinLand in return for money. FruitLand has the fur pelts and meat they need, and ProteinLand has the fruits and grains they need. Money is the tool that has been used to solve the seasonality problem with trade between these two economies. The “money” used to enable trade flows back and forth between these economies as a medium of exchange, store of value, unit of account, and standard for deferred payment.

In this episode of Saturday Morning Muse, Andrew Temte explores the foundational concepts of trade and macroeconomics through a hypothetical economy consisting of two regions: Fruit Land and Protein Land. He discusses the advantages of trade, the impact on societal well-being, and the necessity of education and retraining for those affected by economic changes. The conversation sets the stage for future discussions on currency and deeper economic principles.