I had a strange dream the other night. I had moved to a country where the currency changed value depending on who you spent your money with. If you bought something from someone who was of the same class as you, the main coin was worth eight cents. If, however, you bought something from someone richer than you, it was worth nine cents: and finally, if you spent the money with any government agency, it was worth ten cents. Of course, soon everyone considered others to be richer than they were, so that their money would be worth more. You can imagine where such a system would have many problems and eventually break down.

As odd as such a financial system might be, we deal with a system that is almost as ineffective and certainly as dysfunctional. In our world we put up with a system that allows money to lose value over time. It’s called inflation, and we live with such a dysfunctional system primarily because it benefits those in power. In earlier times, when the king ran out of money, as he was prone to do often, he simply debased the currency by putting less gold or silver in each coin. In fact, many kings were so greedy that they melted down the purer coins of those who had gone before them in order to make even more of their own coinage.

We live in a world where inflation is considered normal simply because of the greed of our past leaders.

In the Old Testament times, interest was illegal. If you wanted to lend money you had to either do it at cost, or you had to do it as an investment, where if things went wrong, you never got any of your money back, and there was little to be done about it.

Modern banking as we know it was said to be invented in the Middle Ages by the Jewish society. They were forbidden to charge interest to each other, but someone came to the conclusion that this ban didn’t include non-Jewish people, so banking as we know it was born.

With modern banking, interest is essential, and so is having a recourse to recoup funds, should those that borrow not repay their debts. The problem with interest is that often the borrower soon owes more than he can repay, which also happened to early kings. Once their debts had grown too large to handle, they simply created inflation in order to decrease the real amount they owed. They did this all the time, except for those kings that did away with their debts the old-fashioned way; by killing off their lenders and thereby cancelling their debts. After all, if you don’t have a creditor, how can you have a debt?

We deal with the same dysfunctional system even today because of the age-old problem. Our leaders refuse to live within their means. They spend money they don’t have so the debt must be debased through inflation. This is why most people who got a raise last year still ended up worse off than they were the year before, even after the raise.

So, why has so little changed over time? It is simply because so little has changed with our leaders. What title we call them by may have changed over the past thousand years, but what they do has remained consistent over human history.