reply to post by th3dudeabides
Yes. The world economy still deals with a barter system -- I barter my goods and/or services for another person's goods and/or services. "Money" is
simply the way of keeping track of the barters, and allows for multi-party bartering.
What I mean by multi-party bartering is this:
Think of it this way:
Say we are in a time before money. A pig farmer asks me to paint his barn, and says he will give me one pig in return for painting. I tell him I have
no need for a pig right now, but I would rather have a bushel of apples and 5 loaves of bread. The pig farmer agrees that a bushel of apples and 5
loaves of bread is equal to one pig -- and thus would be a fair trade for painting the barn -- BUT he has no apples or bread, only pigs.
However, the farmer down the road DOES have apples and bread, but doesn't have any work for me to do for us to trade. Therefore, the pig farmer's barn
goes unpainted, and I don't get the apples and bread I need.
-- let's add money to the mix to make it all easier: The pig farmer can pay me in money the equivalent of one pig to satisfy his debt to me
for painting his barn. Then I go down the road and use that money to buy apples and bread from the other farmer. The pig farmer gets his barn
painted, I get my apples and bread, and everyone is happy.
Our economy is not based on the paper and metal currency, but rather it is based on barter. That currency is only a convenient way to keep track of
bartering and allows for multi-party bartering (i.e., I paint Farmer A's barn, but use that service I provided to trade for Farmer B's apples.)
The money in this case was just a symbol showing others that I provided a service (painted the barn) that was worth a bushel of apples and bread.
Basically, "money" in general is simply an indication that the mutually-agreed upon world economy is in deb
to me for the amount of money that
I have, and I can use that money in many different places to collect on that debt.
Right now, there isn't a lot of bartering going on in most of the world (fewer people are working and fewer people are buying things). So, with less
barter happening, there is less money being exchanged to keep track of that barter.
edit on 8/8/2011 by Soylent Green Is People because: (no reason given)