Thursday, May 07, 2015

Barter & Money

In my macro classes we played a barter game. Each student got a list of 10 items they owned and 10 items they needed to get. Each list was slightly different. All trades had to be 1 item for 1 other item. I set the lists up so that there would have to be many indirect trades (a player who had apples and wanted oranges would not be able to find a player who had oranges and wanted apples right away-you would most likely have to trade apples to get bananas to get tomatoes and then eventually get your oranges). The time limit was 25 minutes and the more items on your needs list that you finished with the more extra credit you got.

The point was to show how much easier trade is with money, which acts as a medium of exchange. It is interesting to note what has passed for money in different circumstances where you might expect barter. It seems like one item can emerge as a medium of exchange if it is something that people generally want. Here are some cases:

Cigarettes were used as money in World War II prisoner of war (POW) camps.

Mackerel in U. S. prisons.

Snickers bars at the annual Rainbow Gathering.