This struck me as interesting question. So much of what we get used to and perceive as "that is how we do it." has a lot to do with what era in time you lived in. Your experience was very different then than it is today.
If we go back far enough and observe the world as highly fractured desperate groupings of people coalesced around some favorable sustaining food stock we see barter with things like food and perhaps simple tools. Traded on the basis of human and animal physical energy exerted to plant, nurture, harvest and the storage of these most important resources that your life depended on. If we had something extra, perhaps it could be traded for something the next village over had that you didn't. If we think of the Earth at a time with less than a million inhabitants, sparsely distributed and pretty much each on its own cultural trajectory... that's how life was. Steady state was a pretty small population.
When populations grew larger and urban groupings formed more sophisticated ideas developed. The silver standard did the trick for a very long time.
In order to effectively use such a physical medium of exchange an intermediary called a "bank" was created that could hold a buffer stock of silver. This popped up out of necessity to keep the wheels spinning. Often ran by a government in the management of its resources, labor, educational aspirations and technical growth. So the need for a buffer stock went away when the metal was made a proxy by some words on a piece of paper. LOL, so those fortresses with big vaults on main street turned into atms and common storefronts over time. Banks are conveniences not fortresses these days.
From a few thousand years BC to up to the 1800s; silver was it.
Note: As populations grew the finite resource problem began to exert itself. Silver mines were getting tapped out, the logical next step was bi-metalic. Gold and silver and eventually the new kid on the block GOLD was looking good and in 1873 it was made the standard in the US. Then in 1933 poof. Onto a silver standard. Volatility sort of went along with the concept of mineral depletion.
By 1971 it was over. Richard Milhous Nixon declared the US would not back the dollar with any precious metal. I have never known anyone with that middle name, it was his mother's maiden name by the way.
Before RMN's advisors prepared him to announce that decision, discussions were going on with energy dense countries to agree to trade their energy feedstocks exclusively in US dollars. A new idea, borrow, pay interest and profit on energy sales with the primary media of conversion being the US dollar with the caveat of supplying a defensive shield for all the players - like it or not it grew to be the cornerstone of energy trade which underpinned nearly every economy - so much so that as growth stalled or notions of avoiding the US dollar surfaced they were squelched quickly. This became known as the petrodollar. An interesting thing to do, couple managing energy with banking profits and fuel the military industrial complex (which needs to have a raison d’être to really drive the spend - as a side note the threat can be real or imaginary as long as contracts get awarded, and if everything looks good today - what about that eminent threat TOMORROW!? cha-ching) whilst managing who is in and who is out. The leverage of a sanction for the players grew into a formidable threat. I'm sure Admiral Rickover who died in 1986 by the way, was not too happy with this decision, because he believed such an arrangement couldn't last for any significant length of time...read on for context.
As time went on, populations grew - enabled by the extraordinary activity all this low cost energy provided. It looked like the sky was the limit in 1970. But wait a second, just a couple of years later a handful of analysts couldn't let go of warnings given in the 1950's about the finiteness of the planetary energy supply. Rickover was convinced the US Navy needed an alternative to oil and championed nuclear propulsion to escape the depletion trap. He saw depletion of oil as a threat to mobilizing the fleet and being able to keep on doing what it was chartered to do. He feared the end of mobility fuels in a generation or two. He didn't know about the last couple of major discoveries, nor the fracking stuff, so he was operating from a position that we are now in. Correct, but ahead of his time by a couple of generations.
Like every resource man has ever dug up, cut down, pulled from the ocean or plunked with an arrow... the sink (the supply) is finite. There may be a lot of it, it may be part of some million year old cycle, or maybe it's made geophysically in the deep earth - whatever your opinion is, the oil "make rate" does not keep up with the consumption rate of our modern world. So what of the petrodollar in an age of depleting petroleum? What of all the other chemistry interwoven in this feedstock?
Those are interesting questions aren't they? With this physical limitation comes the inescapable reality that low cost energy is a very finite commodity and therefor consumption must eventually reduce so; A. Something new or something old needs to be adopted, and B. Whatever that something is needs to be robust against energy scarcity to be a sustainable replacement, or C. mayhem will ensue.
Have a listen to this narration of the Rickover speech linked above at minute 33 and beyond. This awareness was evident in the 1950's and reenforced in the published research known as the Limits to Growth MIT models in the 1970's and again just a few years ago when the LTG models were updated. Yep right on track with the business as usual projection. That's a sobering fact. It portends collapse is much faster that growth. No matter what the talking heads say, or what crazy notions are floating around out there. The limits to growth curves are starting to bite down hard. The implications are wide, diverse and demand attention.
So a lot of voices prattle on about climate change, sure the planet has a lot of features that come and go with an impact - sometimes a very big impact. Stuff can come flying out of the ether and make enormous extinction event craters... the whole cosmos is a dynamic system. Steady state is actually an anomaly in the cosmic experience. But take a moment to ponder a near term fact; what does energy scarcity mean? Spoiler alert: It does not support increasing consumption very well. LOL but burning the last btu acquired by the highest bidder or grabbed up by the nastiest thug only makes the old systems keep on going for a short while longer. That is, until we are forced to confront cold and dark as an unhappy outcome. The quandary of our time. If it doesn't happen in the span of one lifetime we just don't seem to be able react. If the necessary reaction is fundamentally opposed to our wealth generation machine - it ain't gonna happen even with dire warnings and solid research. Sadly. As a rule we're not very good about paying it forward. But we sure are a greedy bunch!
That is why societal behavior based on intelligent leadership and in spite of ignorant leadership is much more important than technological profit driven adventures. It's so simple. System burn from start to reclaimed end needs to be understood and baked into some new behaviors that defy our old notions of economics. Conservation, simplification and regional economies must supplant expansive and energy wasteful supply chains.
Get out your popcorn and find a comfortable place to sit. The curtain has lifted and the first act of the show has began. Rickover was right.
