A simple story about money for economists and policy wonks

Written by Ashwin Rattan Wednesday, 20 June 2012 07:46
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Here's a story from What we fail to teach our kids about money by Andy Golding and The Crowd (despite forensic investigation the origins of the story remain uncertain, however it is interesting and is reproduced below).


“The sun is beating down, and the streets are deserted.

Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich tourist is driving through town. He stops at the hotel and lays a £100 note on the desk, saying he wants to inspect the rooms upstairs in order to pick one to spend the night.

As soon as the man walks upstairs, the owner grabs the money and runs next door to pay his debt to the butcher.


The butcher takes the £100 and runs down the street to retire his debt to the farmer.

The farmer takes the £100 and heads off to pay his bill at the supplier of feed and fuel.

The guy at the  feed and fuel supplier takes the £100 and runs to pay his debt to the local chiropractor, who has also been facing hard times and has been running her business from a room rented (on credit) at the hotel.

The chiropractor rushes to the hotel and pays off her bill with the hotel owner.

The hotel proprietor then places the £100 back on the counter so the rich traveller will not suspect anything.


At that moment the traveller comes down the stairs, picks up the £100, states that the rooms are not satisfactory, pockets the money, and leaves town. No one produced anything. No one earned anything. However, the whole town is now out of debt and now looks to the future with a lot more optimism.”

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