Changes

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 today.

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 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, 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.

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.