Having said that, the whole banking and currency system depends on people believing in it (or more uncharitably, it is a confidence trick).
If people expect it to work, it will work; if they expect chaos, they will get chaos.
To use a crude analogy, in hunter-gatherer days, people collected and stored their own nuts. It was hard work, and what you gathered was your to keep, not for sharing with the whole band.
Fresh meat on the other hand could not be stored as they hadn't invented fridges yet. So when lucky hunters came back from a successful hunt, they would share it with the rest of the clan, including that day's unlucky hunters, on the understanding that next time somebody else had a successful hunt, they would also share, so in the long run, the meat got shared out fairly equally and eaten up straight away.
If some 'hunters' cheated by neither gathering nuts and so on nor bothering to ever catch any animals (i.e. running up debts to the rest of the clan i.e. printing currency), sooner or later they would be excluded from the meat sharing exercise and nobody would want to give away their hard-earned nuts either (i.e. these lazier members of the clan have 'defaulted' and their credibility and hence currency would be deemed worthless), so they had a choice - start collecting nuts etc or try a bit harder with the whole hunting lark.
And presumably it worked or else we wouldn't be here.
Debate Magazine
