Working To Get What You Want, Part I
We all know we need to “work for a living.” Why is that? What does it get us? Let’s
break it down to the basics today, from the beginning:
The Olden Days
Back before formal currency like dollars, euros, or yen, people bartered goods and services in exchange for other goods and services. This proved popular for a long time, but what if the good or service you were willing to sell was not something the other party wanted or needed? Let’s illustrate this with an example. You grow vegetables in
your vegetable garden. Your veggies are the talk of the town, and everyone wants them with their dinner. I raise chickens. People love my chickens, and also enjoy them once in a while for dinner. Since I concentrate on the chicken industry, I do not grow vegetables as well as you do, but I would like to have them with my dinner. I am willing to trade two of my chickens for five pounds of your spinach, carrots, and sprouts. This way, you have some chicken, and I have some veggies. No problem.
Bartering with Multiple People
But there is one problem- you’re a vegetarian! You don’t eat chicken!
In the bartering system, this means I’m stuck. You don’t want what I offer, so I can’t get any vegetables. At the least, it makes my job harder; I must barter with someone else that wants chicken, and they might give me fruit. I then trade this fruit to you for vegetables. I get what I want, but I must trade with multiple people to get it.
Modern Day
With modern currency, I don’t have to engage in direct trade with you.
Someone has decided that my service (or my chickens) are worth a certain 
amount to
them. If I agree on this price, they trade their money for my service. Since this money is
universal, I can then trade it for other goods or services. I don’t have to worry whether or not you like my service, since I can trade a universal currency that everyone accepts. We have now defined my job- trading my service (or chickens) for money. Money I can use to buy other goods and services from people.
Dollars And Sense
Great! So I have money! Why is that so important?
Unless you live on the street with no possessions and don’t eat, you need something to
trade to others for their goods and services- including shelter, clothing, food, and
medicine. These are your needs, and they are not free. Just as you may be providing
services for others to enjoy for money, they are providing these things to you for money. The more money you make, the more goods and services you are able to
trade for. The more your services are in demand, the more money people are willing to
give to you for them. As demand for your services increase, and your needs are met, you
can start spending your money on wants.
What kind of things can you buy?
Are your vegetables really the talk of the town?
Find out next time in Part II….. on Hutar Growth Tuesday!
