On account

Further musings prompted by Donovan (see previous post).

In the beginning, not long after Adam delved and Eve span, people were self sufficient, or at least the households of which they were part were. They managed pretty much everything for themselves. Maybe gave a few goats by way of protection money to their local sheikh from time to time, but that was about it.

But then along came the other Adam, the Smith one, who told us all to specialise, to concentrate on our core businesses, the things that we were good at. So we started to do that, with the result that we also started taking other things, other services off of others. And while money had been invented by this time, we did not have any of the stuff out in the boondocks, so we took things on tick, on account.

The idea was that rather than bother about accounts in real-time, as we would say now, we would settle up once a quarter. Something our great grandparents, if not our grandparents, used to do with their butchers, bakers and candlestick makers.

The catch was that this all depended on trust. I had to trust lots of people to settle their accounts each quarter day (my own birthday being one such, as it happens) - and if they defaulted on their accounts with me, I would default on my accounts with others. The whole system would break down.

So we needed somebody who would take this risk on. And so it came to pass that we had money lenders and banks. They would, in effect, take on all these bilateral accounts and write them up into one giant balance sheet. And the people writing up and balancing all these accounts were adding value and so it was only reasonable that they got paid. But that is another story.

In the meantime, there were, of course, some people whom even the money lender could not afford to trust, so in dealing with those people one had to have recourse to money, to specie. And sometimes, one had a trust problem with the bank, or they had with you, and so, again, one had to have recourse to money.

But accounts are the way forward. Money is out! Holes in the trouser pockets are out! And, hopefully, thieving for cash is out. All the thieves too dumb for electric crime - which is, hopefully, most of them - will have to get honest jobs instead.

PS 1: with thanks to wikipedia for the picture of a money lender, painted by one Quentin Massys just about 500 years ago. A breed said to be the scourge of some parts of rural India.

PS 2: having thought that boondocks was an Appalachian word for where the hillbillies live, while checking this morning, I find that it is a corruption of a word from the Phillipines - and not even a Spanish one at that.