What is good about money?
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Return to Thread:Talk:Money/What is good about money?/reply (4).
re 1(a)(b), Morbius writes (private):
It's less that there are things which cannot work without money, but that there are exchanges which are vastly more facilitated by a money-based exchange. It's an efficiency argument. There's also the fact that money gives a uniform pricing (exchange) basis.
Examples:
- Trading of disparate goods. Apples for oranges. Bread for labour. Rent for fine art. Interest for capital. Taxes for public goods. This presupposes and enters into a few other elements. Common pricing supposes markets (multiple buyers and/or sellers), and there seem to be a number of different types of exchanges: goods or commodities, labour, rents, assets, interest, taxes, public goods. Smith's discussion of prices covers many of these, and there seems to me an underlying logic supporting much of his classification.
- Multi-party exchanges. Much trade isn't end-user consumption but intermediate exchange. A sourcer (farmer, miner, forester, fisher, etc) acquires raw materials, sells them to an intermediate trader or transporter (there's a whole literature of "jobbers" in 19th century business here), transport shippers (teamsters, ship captains), manufacturers, wholesalers, and retailers. We tend to see the retail trade but ignore much the rest. Labour is also generally not sold to end-use consumers but to intermediate service or transport interests.
- Money itself is highly fungible and exchangable. I'd argue, much as I do with Weber's definition of argument, that money is simply the most exchangable good, that is, the good which is in highest common demand by all. Which means that whatever good has that property is by definition money.
(By extension, money need not be some government-issued or sanctified commodity, though it of course very often is. It is always, at least within the exchange community, the currency of social convention.)
re 1b2a, Morbius writes (private):
where one person grasps the value of something, would find it very difficult to persuade anyone else of its value
Money itself does not establish value, or in the terminology of economists, does not engage in price discovery. Rather, it serves as a common unit of value once that price is established, usually through market operations.
(I'm leaving entirely untouched the question of whether or not markets are effective, efficient, or accurate in price discovery, though there's a large literature on market failures which touches on this, among others.)
(I'm linking Investopedia not so much as an endorsement or agreement, but because it does reasonably represent the orthodox agreement and definition of terms.)
Basically, 1b2a is not an inherent function of money, but of markets, or other forms of price discovery / value discovery.
re 1b2b (block grants), Morbius writes (private):
again, not intrinsically about money per se, if I'm reading you right, but about resource (or demand-rights) allocation. That is, do individuals (or organisations) have some right to a basic income or stipend, and if so, how much.
Keep in mind that any grant of right of demand is at least analogous to money, that is, someone has some claim on ... some thing, or the right to make a demand or receive an allocation (food, shelter, clothing, education, healthcare, etc.). How that's accounted for, how transferrable or restricted that right is, etc., are additional concerns or considerations.