This kind of informal credit is how most of the economy worked not that long ago. People think modern money is inherit from metal coins. But it’s more correct to say that it comes from IOUs, which is why so much of modern money has its origin in debt.

My sister had store credit at the local grocery store in her small town just 25 years ago. Now that’s all replaced with various forms of bank credit.

I think we’d struggle more if the banks shut down in this day and age, because so many, especially younger people, have the wrong idea about how money works so I’m not sure we’d figure out an IOU based replacement quickly enough to avoid catastrophe. I wonder if at some point paper will be rare enough that we’d struggle to record all the credit we need to keep the economy working.

This is absolutely fascinating. Didn't know about the Irish bank strikes till now. I wonder why then in 'prepping' discussions there's always talk about "imagine what's going to happen once the banks come down??" and it's like ... people will just write IOU cheques to each other? Of course, I think other factors could be at play that spared Ireland from catastrophe, like ethnic homogeneity of a society leading to greater levels of social trust. (Whereas less homogeneous ones may not have that, but maybe there's other trust factors that override it?) Who knows - haven't had bank outages here in the US yet to find out.