What happened though was that the increased supply of coinage actually led to its depreciation in value, regardless of what rare metal it was made of. They thought that the more precious metal they could acquire, the more coins they could mint, and therefore the more money they would have. When the Spanish conquistadors swept through Central and South America in the sixteenth century, they were largely motivated by the quest for gold and silver. The financial system is evolutionary in nature. In situations like this, space is created for new types of financial firms and practices to spring up. Some events, like the financial collapses of 19, lead to a mass extinction of financial firms and practices. On the other hand, firms that cling to outdated practices and fail to produce sufficient returns are doomed to extinction. This is the financial equivalent of gene reproduction. The firms that adapt to these new situations grow and prosper and are imitated by others. The financial world is constantly changing through new techniques and innovations in the same way the natural world constantly evolves. The financial system evolves in a similar way, through market selection: the financial equivalent of natural selection. In situations like this, new species will grow in the spaces left by the extinct ones, just as mammals took the place of dinosaurs after the meteor disaster. Usually these changes are localized to small environments, but sometimes events happen that cause extinctions on a large scale.įor example, 64 million years ago a meteor wiped out almost all life on earth, including most dinosaurs. The process is continuous species are always dying out and being replaced by new species.
The life forms which were most prosperous were able to spread their genes through reproduction and thus multiply in number, eventually taking the place of the declining species. The fight for these resources is vicious, as failure will often result in extinction.
In most environments there are only enough resources to support a limited amount of life. Life forms most suited to their environments prospered, whilst those less successful died out. Charles Darwin discovered that life evolved through a process known as natural selection.
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