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expand the traditional power structure . The literacy rate increased. People who previously had very little voice gained some measure of power and influence. This was particularly so when they consolidated and exercised their power and wealth in numbers , through groups like guilds . Guilds are associations of people of a similar trade who unite to pursue common interests, such as protecting their market from imports, setting quality standards for their products, or setting training requirements for their craft. Engage students in a discussion. Things are not so very different today. People still find strength in numbers. What kinds of groups do people join today to increase their political, social, and economic clout? (Answer: Unions, professional associations, political parties, clubs…) A money economy mobilizes wealth. Wealth in the form of land is not easily put to use. Its value is, literally, landlocked. As a financially literate person would put it: It lacks liquidity , meaning it cannot be quickly converted to cash . Land can’t be moved around. Land can’t be used to start a business or combined with other people’s wealth to create a larger fund for investment. Money is liquid. Money freed wealth from its landlocked, illiquid state so it could go mobile . That begs the question: What did people do with money once they had a little? The same thing they do with it now – try to make more! Wealth in the form of money was put to work to produce more and greater wealth through exploration, innovation, art, and expansion of commerce to the four corners. Engage students in a discussion: Think back to your history class. How did the desire and ability to accumulate wealth impact the course of history? Exploration? Innovation? Art? (Answer: Expedition to/ colonization of the New World, expansion of trade into Asia and Africa, the Renaissance, the Industrial Revolution…) Commerce and the Mobsters (1397-1494) Bribery! Corruption! Assassinations! Treachery! Conspiracy! Burnings-at-the-stake! Fortunes gained! Fortunes lost! Tyranny! Banishment! Excommunication! Hedonism! Forget Game of Thrones . The antics of the Medici’s are the real deal. The Medicis were a powerful banking family of 14th and 15th century Florence. They were ruthless in their pursuit of power and wealth. History, however, has forgiven them for all that because they were also very good bankers whose keen financial vision and acumen lead to the origins of modern banking and the evolution and expansion of commerce. The Medici banking dynasty began around 1397 under Giovanni di Bicci de' Medici with one small branch in Florence. Giovanni recognized that the expansion of a money economy throughout Europe presented lucrative banking opportunities. Giovanni, and later his son Cosimo, built their little bank into a vast international operation with branches across Europe in Geneva, Avignon, Bruges, London, Rome, Naples, Venice, and Milan. In the past, people had been very suspicious of banks with multiple branches because when one branch failed, it often had a domino effect, causing the others to fail. Great fortunes had been lost throughout Europe. The Medicis were the first to eliminate this risk by utilizing what is now known as a holding company . Effectively, bank branches were owned and operated independent of one another, yet connected by partnership to the Medicis. SLIDE 6J PRODUCT PREVIEW
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THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY
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