Forward Together

A wealthy noble was travelling from his castle to a summer estate for a hunting trip, when a sudden driving rain began. Soaked to the skin, the noble turned off the main road and diverted to a small village nearby, seeking shelter. The village was run down, and clearly had seen better days, but the noble was desperate to get out of the rain.

Upon arriving at the inn, the innkeeper greeted the noble warmly and quickly arranged accommodation. As was standard practice, the noble gave the innkeeper a deposit of $100 to reserve a room before descending to the lower level of the inn for a meal and a drink.

The innkeeper - who like most of the town had been down on his luck of late - quickly ran to the stable and asked the stable hand to take care of the noble’s horses. He also paid the stable hand $100 in back pay, which he hadn’t been able to afford up until this point.

The stable hand, as efficient as always, stabled the horses and then headed out into the rain to meet his wife for lunch, as he did most days. When there, he gave his wife all the money he’d just been paid.

After the meal, she took that money and went to the grocer. There, she used the hundred dollars to pay him back for the groceries he’d generously allowed her to buy on credit while she waited for her husband’s back pay to come through.

The grocer, glad to have some revenue, quickly pulled aside his watchman and gave him $100 of his pay for the week. “Since I’ve got the money coming in, I want to make sure you get taken care of first,” the kindly man explained.

The watchmen, after completing his shift, went straight away to the sex worker he often visited in his spare time when he had a little extra cash. Together, they went to the town’s inn to enjoy one another’s company. Upon arrival, she took the $100 he’d just paid her and gave it to the innkeeper, who’d been letting her stay on credit while she waited for the town’s clientele to have some extra cash.

At this point, the rains let up and a beautiful sunny sky shone down on the town. The nobleman, eager to be to his cabin, decided that he could just make it by nightfall if he left straight away.

“Innkeeper, never mind the room as I’ll be on my way. Please saddle my horses,” the man asked.

The innkeeper fetched the stable hand and set him on the task, and then returned the noble’s $100 deposit using the money he’d just gotten back from the prostitute, and the noble left town.

In the wake of his departure, all of the money was right where it had started, yet absolutely everybody in the town was better off because of its transition through the populace. The ability of a single dollar to engage in multiple transactions and have a much larger economic impact than just one dollar’s worth is known as the velocity of money.

I first read a version of this story in a column online, but I don’t recall the source. If anybody knows it or locates it, please let me know and I’ll credit it properly!