Why we use money to trade

I think anyone who reads the passage above is going to end up sympathising with the people in the economics department who say that you really can’t organise a modern industrial society on the basis of organising a wife-swapping party every time you want to buy a blanket.

Quite.

It just makes it all so much easier than that web of interpersonal relationships that some would prefer trade to involve.

9 comments on “Why we use money to trade

  1. Indeed. The whole problem for societies is systems of “stranger transaction”; utopians invariably desire systems of personal interaction that don’t scale to large societies of strangers. Hence, they always end up trying to push us back into stifling localism- “communitised isolationism”- because only when you know everyone in the village can any any of their desired systems work.

    Also, NASA didn’t invent Teflon. Or velcro either, come to that. From the grand oracle that is Wikipedia-

    “PTFE was accidentally invented by Roy Plunkett of Kinetic Chemicals in New Jersey in 1938. “

  2. Surely the free market is a “web of interpersonal relationships”. Facilitated (to use one of their favourite words) by money.

  3. No, the free market is a web of stranger interactions, not interpersonal relationships. The whole advantage of it is that it enables a system of interaction between those who have no relationship.

  4. Or even despise each other.

    “He may be a complete shit but his money spends as well as my bezzer’s …” To hideously abuse a well known saying.

  5. A prIce system means you don’t actually need to know personally the exact valuation of one good for another, but can instead rely on the understanding of thousands of others – via the price system

    Ironically, many Guardian readers support a system, barter, in which the weak and stupid can be perpetually exploited by the bright and unscrupulous.

  6. …the free market is a “web of interpersonal relationships”.

    Perhaps if you had included the word “mediated”.

    I have no direct relationship with the farmer who produced that most excellent dry-cured bacon I ate this morning. That relationship was mediated via the very un-personal relationship between me and my local supermarket.

    While I recognise many of the staff there, and they recognise me, it remains, as IanB put it, “a stranger relationship”. That is the beauty of the deal – I don’t need to get to know the producers of my Sunday morning fry-up. That is Mr. Morrison’s problem. And in recognition of his efforts I pay him a slightly higher price than I would if I dealt with the producer directly.

    And that’s OK. I’d much rather replace the labour of establishing a relationship with the abstracted form of my labour, i.e., money.

  7. Another problem is that in modern society marriage partners are no longer fixed assets to be borrowed against but liquid assets that can turn into massive liabilities in minutes if not carefully managed.

  8. it would certainly be exhausting if I had to engage in sex to buy a train ticket, buy groceries, etc…..give me momney and a market mevery time…..PERLEEEESE

  9. Grumpy Old Man – “Another problem is that in modern society marriage partners are no longer fixed assets to be borrowed against but liquid assets that can turn into massive liabilities in minutes if not carefully managed.”

    Not to mention that I would pay not to have sex with most of the morbidly obese women who live around my way. And don’t even get me started on my dentist. Who is a lovely bloke, just not my sort.

Leave a Reply

Name and email are required. Your email address will not be published.