Sometimes you want everything in one file: the output and the errors, in one place.

2>&1 means: send stream 2 to the place where stream 1 goes now.

learner@tidepool:~$ cat prices.txt missing.txt > all.txt 2>&1
learner@tidepool:~$ cat all.txt
tea 4.50
coffee 3.20
cat: missing.txt: No such file or directory

The order is important

The shell reads the redirects from left to right:

The other order gives a different result:

In the second line, 2>&1 comes first. At that time, stream 1 still goes to the terminal. So stream 2 goes to the terminal too.

A shorter form

Bash also has &>, which sends both streams to one file:

learner@tidepool:~$ cat prices.txt missing.txt &> all.txt

You will see both forms. > file 2>&1 also works in other shells.