Counterintuitive Facts (52): Why Are the Last Ones Standing in Companies Always the Sycophants?
PremiumBad Money Drives Out Good: When 'playing politics' pays better than 'doing work,' workers disappear
I. In late Ming Dynasty, real silver. Pure silver. Almost disappeared from circulation. Everyone used adulterated silver mixed with copper or lead. Why? Because if I have a piece of pure silver and a piece of bad silver, both legally worth "one tael." I'll definitely hide the pure silver at home (store of value) and spend the bad silver (circulation). Over time, all circulating money is bad money. Good money exits circulation. This is the famous Gresham's Law: Bad money drives out good.
II. 16th century English Finance Minister Thomas Gresham discovered this pattern. At the time, English coins had varying purity. People would melt or hoard pure gold coins, trade with impure gold coins. Result: only adulterated coins remained in circulation. Monetary system collapsed.
III. This law applies
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