Changes

How we buy and sell things is almost as important as which goods we choose.  Since nearly the beginning of the world, something called “[[money]]” has been the medium for buying and selling [[goods]] and [[services]].  The “money” itself has only the value that people assign to it.  It can be made of a worthless material, such as green paper.   

How we buy and sell things is almost as important as which goods we choose.  Since nearly the beginning of the world, something called “[[money]]” has been the medium for buying and selling [[goods]] and [[services]].  The “money” itself has only the value that people assign to it.  It can be made of a worthless material, such as green paper.   

Money is not essential to a society.  When we buy food, we could offer to work in exchange.  Or we could grow our own food and trade the excess of our crop for the excess of someone else’s crop. This is known as “bartering”.  American Indians lived well for long time without any money.  So have many societies.  A great deal of bartering still occurs today.  The Amish are known to barter when they need services from outsiders today.

Money is not essential to a society.  When we buy food, we could offer to work in exchange.  Or we could grow our own food and trade the excess of our crop for the excess of someone else’s crop. This is known as “bartering”.  American Indians lived well for long time without any money.  So have many societies.  A great deal of bartering still occurs today.  The Amish are known to barter when they need services from outsiders.

But money makes transactions more efficient.  Imagine loading up your shopping cart with groceries and then trying to barter with the owner of the store.  You may not have any goods or services that the owner really wants.  You may be a teacher, but he may not be interested in learning.  Or you may be a professional football player, and he may not be a fan. Others are willing to pay to watch you play, but this grocer is not.  Both of you are then stuck, and you might as well unload your shopping cart and try another store.

But money makes transactions more efficient.  Imagine loading up your shopping cart with groceries and then trying to barter with the owner of the store.  You may not have any goods or services that the owner really wants.  You may be a teacher, but he may not be interested in learning.  Or you may be a professional football player, but he may not be a fan! Others are willing to pay to watch you play, but perhaps this grocer does not care how many touchdowns you can score.  Both of you are then stuck, and you might as well unload your shopping cart and try another store.

Money solves this inefficiency.  You accumulate dollars by doing work for someone who wants or needs it, and then use those dollars to buy the goods and services that you desire.  The person or company who receives your dollars can then spend it in yet another way.

Money solves this inefficiency.  You accumulate dollars by doing work for someone who wants or needs it, and then use those dollars to buy the goods and services that you desire.  The person or company who receives your dollars can then spend it in yet another way.

Money is, in many ways, a form of communication.  Donating money to a political candidate or a charity makes a statement.  Buying expensive clothes, a luxury car, or a certain houses is like free speech.  We often judge the value of something by looking at its price.  We expect a car that costs $30,000 to have higher quality than a car that costs $15,000.  We don’t even have to look at the two cars to have a high probability of being correct in that conclusion.  Sometimes the price can be misleading, of course.  But often it is a good indicator.

Money is, in many ways, a form of communication.  Donating money to a political candidate or a charity makes a statement.  Buying expensive clothes, a luxury car, or a showy house is like free speech too.  We often judge the value of something by looking at its price.  We expect a car that costs $30,000 to have higher quality than a car that costs only $15,000.  We don’t even have to drive each car to know that.  Sometimes the price can be misleading, of course.  But often price is a good indicator of the underlying value of the good or service.

Money can be used to obtain food for starving people and for other good deeds.  Or money can promote evil, as when communist countries build armies to suppress freedom.  Then money becomes necessary to combat the enemy.

Money is used to obtain food for starving people and for helping them in other ways.  Or money can promote evil, as when communist countries build armies to suppress freedom.  Then even more money would be helpful to defeat the evil, as in World War II.  Of course, factors other than money play a big role also.

When asked how much more money people want, most say they would be happy with 20-100% more money than they have.  This answer is the same from the poorest to the wealthiest persons. In absolute terms, the more money someone has, the more money he wants.  There are exceptions.  [[Andrew Carnegie]] acquired and hoarded one of the greatest amounts of wealth in the history of the world, wrote the “Gospel of Wealth,” and then gave it all away before he died.  Carnegie Hall, the first 39 branches of the [[New York Public Library]], and Carnegie-Mellon University are the products of just a few of his gifts.

When asked how much more money people want, many say they would be happy with 20% more money than they have.  Remarkably, this answer is the same from the poorest to the wealthiest persons. In absolute terms, the more money someone has, the more money he wants.  But some wealthy people give their money away to charity.  [[Andrew Carnegie]] acquired and hoarded one of the greatest amounts of wealth in the history of the world, wrote the “Gospel of Wealth,” and then gave it all away before he died.  Carnegie Hall, the first 39 branches of the [[New York Public Library]], and Carnegie-Mellon University are the products of just a few of his gifts.

Freedom depends on the free exchange of money.  Communism and other totalitarian systems consist of government control over how money is earned, saved and spent.  Loss of this freedom inevitably results in the loss of freedoms of religion and speech too.

Freedom depends on the free exchange of money.  Communism and other totalitarian systems rely government control over how money is earned, saved and spent.  Loss of this freedom inevitably results in the loss of freedoms of religion and speech too.  If we ever lose our rights to pick a job or career, then it would not be surprising if we lost our rights of worship also.

 

Economics is basic to our freedom, and is very influential in determining whom we elect.  Countries that lack economic freedom often lack religious freedom.  If we lack rights in deciding what career to go into, then we will lack rights of worship also.

== This Economics course is about far more than money ==

== This Economics course is about far more than money ==