In 1690, Massachusetts Bay Colony embarked upon a short-lived experiment in unbacked paper money. It did not go well.
George Washington – surveyor, farmer, soldier, and statesman – never thought of himself as an economist but experience taught him a great deal about fiat (unbacked) paper money. When the Congress foisted it on his Continental Army and tried to pay for food with it, his men suffered privation.
By contrast, the nearby British ate well because they paid in gold and silver. (Continue your Education > > >)
