bad money drives out good

Thomas Gresham (15 19- 1579), a British businessman and financier, is the founder of the London Stock Exchange. He is called "the father of securities". Gresham's most famous theory is Gresham's Law, that is, the law that bad money drives out good money, which is an economic law that bad money squeezes out good money from circulation. For example, a country began to issue silver coins with a face value of 1 yuan, and two years later issued copper coins with the same face value. These two currencies with the same face value circulate at the same time. Will you spend your silver coins at this time? Not if you're normal. You try to find copper coins for others and save the silver coins you get. Why is this? Because silver is more expensive than copper, you can collect silver coins and sell them at a price higher than the face value in the future. Soon, silver coins withdrew from circulation, and all the coins in circulation were copper coins.

The philosophy revealed by this law is that what is popular is not necessarily a good thing, and good things are not necessarily popular, which is just contrary to Darwin's law of "survival of the fittest".

In social life, there are many examples of "bad money chasing good money". The reason why piracy is repeatedly banned is that "pirated" and "genuine" have the same value, but the prices are far from each other. Therefore, people are of course willing to buy "pirated copies" at a price of a fraction, even a few tenths or a few hundred percent of the original copies. In the end, "pirated copies" will drive "original copies" out of the market. ..... take the bus * * * and so on. I have just returned to China to take the bus, often waiting for more than an hour, and the last five cars didn't get on. In foreign countries, it is customary to maintain order. No matter how many people are waiting for the bus, everyone is waiting in line there. Here comes the bus. Get on quietly and don't touch each other. Not at home. At first, I was very orderly and patient, complaining about those who didn't keep order, but I couldn't get on unless you squeezed in and waited for ten more cars. Finally, I got up the courage, closed my eyes and squeezed into the car. In this way, people who maintain order are eliminated. Either you don't get on the bus or you don't maintain order.

Paper money can't completely avoid this phenomenon, because everyone will spend the broken paper money first and leave the new one in their hands. So the banknotes in circulation will be gradually broken. Electronic money can avoid this phenomenon.