Sunday, June 21, 2009

All economies are based upon barter

All economies are based upon barter

Let me begin with a joke I received in an email:

Economics 101

An insight on how the U. S. conducts business these days.

It is a slow day in the East Texas town of Madisonville.

It is raining, and the little town looks totally deserted. Times are tough,
everybody is in debt and everybody lives on credit.

On this particular day a rich tourist from the East is driving through

He enters the only hotel in the sleepy town and lays a hundred dollar bill
on the desk stating he wants to inspect the rooms upstairs in order to pick one
to spend the night.

As soon as the man walks up the stairs, the hotel proprietor takes the
hundred dollar bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to pay his debt to the
pig farmer. The pig farmer then takes the $100 and heads off to pay his debt to
the supplier of feed and fuel.

The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to
the local prostitute, who has also been facing hard times and has lately had to
offer her "services" on credit.

The hooker runs to the hotel and pays off her debt with the $100 to the
hotel proprietor, paying for the rooms that she had rented when she brought
clients to that establishment.

The hotel proprietor then lays the $100 bill back on the counter so the
rich traveler will not suspect anything.

At that moment the traveler from the East walks back down the stairs, after
inspecting the rooms.

He picks up the $100 bill and states that the rooms are not
satisfactory...... Pockets the money and walks out the door and leaves

No one earned anything. However the whole town is now out of debt, and
looks to the future with a lot of optimism.

And that ladies and gentlemen, is how the United States Government is
conducting business today.

If that doesn't scare the hell out of you, then I don't know what

I'll tell you what is really scary. The above "joke" illustrates why people fall for government meddling in the free market: they haven't got the slightest clue about economics. All money is, is a place-holder for value, like the $100 bill in the joke. In a closed economy like the fictional one above, the money was unnecessary. The people had been bartering all along. There was no debt. They just didn't realize it, being brainwashed into depending upon "money". The $100 bill only made them happy about a situation that was already equitable. It was a placebo.

Money is not "bad", but it isn't the only system possible, and may not even be preferable in some instances. US dollars are fiat currency that has no real value except as a piece of paper; an IOU. All voluntary economies are barter systems. Even one based upon trading time for money that you then trade for goods and services. You can call the system anything you like as long as no theft or coercion is a part of the system. Once coercion becomes a part of your economy it has lost its legitimacy. Once theft is institutionalized (by calling it "taxation" or "eminent domain") or once a "war" on something (like "drugs" or guns) has been embraced, your "system" has become just another disgusting authoritarian regime. No legitimate society would ever allow Rulers to impose counterfeit "laws" that nullify or punish voluntary barter of anything as long as no innocent third party is harmed.

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