Why Barter is Better

How much value does a Ferrari have to a blind, quadriplegic monk who has renounced the world and lives on a mountaintop in the Himalayas? Approximately zero value. If you gave him a Ferrari, what would he trade it for? Silence? Tranquility? A bowl of rice, maybe?

In one fell swoop, the value of a Ferrari has come to what many people would consider to be nothing at all.

Value is what we attach to a thing, based on our needs, desires, and, well, our values. What we know of as monetary value is nothing more than an artificial construct, derived from the equally artificial concept that all items have an inherent value which can easily be expressed in dollars and cents. Our entire monetary system depends upon our having that belief. But, alas, it is not so. Corn does not grow with a specific dollar sign stamped on its kernels.

Yes, I know that some smart asses will be quick to point out that the cost of labour, plus overhead and seed costs, divided by the number of kernels, plus the desired mark-up provides that mystical amount, even if it is not stamped on the kernels themselves. To which I say: "Are you deaf, or what!?" I just said that the monetary value we place on all these things is not a naturally occurring thing. The natural state of all things is no monetary value. Value is derived from an object's usefulness to a given person, animal, or thing. A Ferrari, therefore, has no intrinsic value. The value it has is derived entirely from its usefulness to a given person. And, once again for the idiots among us, usefulness can mean anything from the Ferrari's usefulness as a method of transport, to its ego and status boosting capacity.

So, our monetary system can be said to be based on a false valuation of objects, since objects do not have any value beyond that which we give them. A bean could, potentially, have the same value as that miserable Ferrari, given the right circumstances.

You sniff at that assertion? If the bean is rare, if there is a famine, or a blight that has wiped out that specific cultivar, science or agriculture would find that one bean to have a far greater value than a mere Ferrari. Or, maybe someone just doesn't have use for a Ferrari, but has a use for a bean... .

The monetary system, as we have it, was designed as a method of convenience; and as a convenience, it comes with a cost. The cost? The artificial valuation of objects, and the obvious parasites who will inevitably attempt to profit from the system itself.

Of course, where I am going with all of this is to point out that under a system such as the barter system, the value of an object is determined by the use a person has for it, and nothing else. In addition to that salient point, the barter system tends to operate on the basis of trading your surplus for someone else's. To the minds of modern financiers such ideas are anathema! No middleman, no banks and bankers, no wholesalers, or Walmarts, either! Greed, glorious greed, spitted on a stake and left as breakfast for the kites and vultures! No wonder they won't have it, and neither will the greed-soaked populace who can't see life without monetary profit as life worth living.

Therein lies the problem with our modern thinking! We've become psychologically addicted to the 'for profit' system, and can't see our way out of it. We've also become so mobile that the old-fashioned barter system no longer seems practical. We also can't see how a person can carry a brace of birds, a cow or two, and a couple of sacs of grain while travelling to Paris. It was, in fact, for this reason that precious metals came to be used as currency in place of actual goods. It bears in mind remembering that 'money' as we know it, was once only a temporary replacement for actual goods, and not an item in itself.

I am now going to tell you a little story, by way of illustration, as to how a person can turn extra eggs into a house by way of barter:

A man has a chicken that lays more eggs each day than he can possibly eat, so he trades the extra eggs with his neighbor who has more milk than he needs. The man then discovers that he can make omelettes with the eggs and the milk, and a little bit of flour that he trades with his other neighbor for. He gives his extra omelettes to the local innkeeper in exchange for beer. Since he doesn't drink barrels of beer, he then trades those useless items (to him!) for lumber from the local lumberjack (who loves beer and can drink barrels in a day!). The man then brings the wood to the local carpenter, who agrees to make a full dining-set out of it in exchange for the leftover lumber.

Eventually, the man trades the dining set for jewelry from the local jeweler, and the jewelry for a small tract of land that a local land-owner doesn't have much need of and wants to unload. The land-owner happened to be in need of a nice trinket with which to appease his mightily pissed-off wife! Another round of similar trading, and the man has enough timber to build a house, as well as a master builder who is willing to do the work in exchange for a piano. The piano is an easy trade, since the omelettes are trading well, and the carpenter loves the beer. As long as the man can keep on producing eggs, he can keep trading around his community and upgrading his new house and holding.

Eventually, the man's hold will produce a wide range of goods with which to trade - and all of them will be surplus that the man does not need, cannot use himself, or just does not want.

That is the way that our ancestors built real wealth (not money or bank accounts!), backed by actual goods. The only problem with the old barter system was the difficulty of travel, which usually required baggage trains filled with goods for use in transit and with which to trade while away from home. You'd think that in our modern age we would be able to come up with a better solution to the problem of travelling and trade than the use of what we now call 'money'. At the very least, we could educate ourselves about the fact that 'money' is supposed to represent actual wealth, instead of believing that 'money' is the wealth we're chasing.

Image: Pixabay