Hi Ranty Nation! Ranty McRantyson har agin!

Ah thunk ah shud git started splainin our economic system, but frum the very beginnin. Folk frum ancient times bought an sold thangs in a differnt way than we’all do today. They used a “barter system” to buy an sell thangs!

Har’s a link to a dictionary definition of whut a barter system dun be. But ah thunk that the best way to splain whut a barter system is, is by usin an example. So har we’all go!

Let’s say y’all’re a shoe maker an that y’all make a really gud shoes.  The thang is, y’all wanna get a cart so y’all can move yur shoes, food, an other goods from one place to nother.  An let’s say it takes y’all bout 5 hours (total, includin makin materials an stuff) to produce a pair of shoes cause y’all only make a pair at a time an fit it special fur each client.  Y’alls shoes last 1-5 years, dependin on how hard they dun be used.

Now, the cart maker also makes a really gud product.  Fur him to make a durable cart takes bout 50 hours.  The cart’ll last probly 5-10 years, dependin on how hard it dun be used.

So y’all go to the cart maker an offer to trade 10 pairs of shoes fur a cart (them thar shoes an the cart’ll both take bout the same time to make).  Furtunately fur y’all, the cart maker dun need a new pair of shoes an so does everone in the family (his wife an two kids).  However, that is only four pairs of shoes an that don’t even git you half way to gittin yur cart!

Now y’all’re smart an knowin that kids tend to outgrow them thar clothes (e.g. shoes) purty quick, the cart maker says he’ll take nother four pairs of shoes fur when the family wears out/outgrows the new pair they’ll be gittin (the cart maker is smart nuff to git them shoes made bigger’n necessary so they kids will wear em out before they outgrow em).  But, that’ll cover the whole durned family fur the next 4-5 years an the cart maker, AN y’all’re still two pairs of shoes short of gittin a cart.

Unfortunately, there ain’t no way that the cart maker needs nuff shoes to pay for the cart. However, the cart maker does need a new dinner table fur his growin family.  So you both agree that the shoes plus a new dinner table is enough for the cart you want… an an extra set of wheels an an axle.

The problem is y’all ain’t a table maker, so y’all have to go to the furniture maker to trade shoes fur a dinner table fur the cart maker.  Unfurtunately, the furniture maker recently traded y’all shoes for a table of yur own an don’t need no more shoes, BUT the furniture maker DOES need some stuff frum the blacksmith…

Now even ah know that at this point y’all can probly see where this dun be goin! The shoe maker’s gonna have to do a whole buncha extra wurk jus to get him a cart. Cause of this, the cart maker dun be gittin the best of this deal.

The bottom line is a barter system ain’t a very gud way to trade, at least fur most people. At best, some times y’all dun do fair or, ever once in a while, y’all might do purty gud, but there’ll definitly gonna be those times when y’all just git, pardon mah French, screwed!

So, whut’s the solution to this? Well, that’s whar money comes into our story.

So until the next Back to Basics article…

This is Ranty McRantyson signin off!