How to better understand that bad money drives out good money? Can you give me an example?

In Britain in the16th century, due to the shortage of gold reserves, other metals could only be mixed into newly-made gold coins. So there are two kinds of gold coins on the market; One is a gold coin that has not been doped before, and the other is a gold coin doped with impurities, but the legal value of the two currencies is the same. In this way, people will collect good money without doping and use bad money with impurities; After a long time, only bad money is circulating in the market, and all good money is out of circulation.

This phenomenon was discovered by the British economist Gresham, and later evolved into Gresham's law. In fact, in China, as early as the 2nd century BC, Jia Yi, a famous political commentator in the Western Han Dynasty, pointed out the fact that "the more money is stolen, the more money dies".

Such scenes are often seen in our lives: people who wait in line for the bus have no seats, and those who don't wait in line have seats; Flattery promotion, honest unemployment; Honest and trustworthy business went bankrupt, and opportunistic wealth doubled; People who are enthusiastic about helping others are miserable, and those who look on coldly can drink herbal tea and see jokes.

Why is this happening? In Gresham's law, the premise is that the legal value ratio of bad money and good money remains unchanged. In society and life, it is because there is no incentive mechanism for good behavior (good money) and no effective punishment mechanism for bad behavior (bad money), thus forming a huge unfair profit space.

As long as this environment remains unchanged, good money will always be expelled and eliminated by bad money. What is even more frightening is that some good money will become bad money in order to survive, and the social environment will become more and more dirty; There are fewer and fewer good money, the competition between bad money will be more intense, and bad behavior will be further upgraded and become worse. ?

Bad money drives out good money means that when a country circulates two currencies with different actual values but the legal parity remains unchanged at the same time, the currency with high actual value or silver (good money) will inevitably be melted, collected or exported and withdrawn from the circulation field, while the currency with low actual value (bad money) will flood the market instead. /kloc-in the 6th century, it was put forward by the director of Elizabeth Foundry in England, also known as "Gresham's Law". He observed that consumers hold undivided currency (high in precious metals) and use non-base currency for market transactions and circulation.

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