Muhammad on Nostr: Al Ghazali on money and the coincidence of wants attached below. This correct ...
Al Ghazali on money and the coincidence of wants attached below.
This correct understanding of what money is and what problem it solves is what can allow someone to appreciate the characteristics of a good money.
Saifedean Ammous in his Principles of Economics articulates a similar idea:
"The main impediment to the expansion of trade between people is the problem of lack of coincidence of wants. When humans try to find solutions to this problem, their actions naturally lead to the emergence of money, which is defined as a general medium of exchange. By understanding how the problem of coincidence of wants is solved using money, we can discern the properties that matter for money to operate successfully, and as a result, understand the properties that make for good money that emerges freely on the market."
"The more people in a society, and the larger the number of possible goods and products, the less likely it is for these two people to find one another for the trade to take place. In an economy in which there are only 100 people and 10 goods in total, everyone will be employed in the production of one of these goods, and everyone will need to obtain a supply of these goods. The odds of finding a trading partner whose wants coincide with yours decline drastically as the number of people in an economy, and the number of goods and services available, increases."
"The third dimension to the coincidence of wants is the lack of a coincidence of wants across scales. When individuals want to directly exchange goods of different sizes and values, a partial exchange is not always possible. The person who wants to sell apples cannot exchange each apple for a small part of a car from someone and then assemble the parts into one car. It would be impractical and inefficient to engage in trade with such different goods. Reason suggests some other, more divisible medium of exchange will solve the problem."
— Saifedean Ammous, Principles of Economics
#Nostr #Islam #AustrianEconomics #bitcoin #economics
This correct understanding of what money is and what problem it solves is what can allow someone to appreciate the characteristics of a good money.
Saifedean Ammous in his Principles of Economics articulates a similar idea:
"The main impediment to the expansion of trade between people is the problem of lack of coincidence of wants. When humans try to find solutions to this problem, their actions naturally lead to the emergence of money, which is defined as a general medium of exchange. By understanding how the problem of coincidence of wants is solved using money, we can discern the properties that matter for money to operate successfully, and as a result, understand the properties that make for good money that emerges freely on the market."
"The more people in a society, and the larger the number of possible goods and products, the less likely it is for these two people to find one another for the trade to take place. In an economy in which there are only 100 people and 10 goods in total, everyone will be employed in the production of one of these goods, and everyone will need to obtain a supply of these goods. The odds of finding a trading partner whose wants coincide with yours decline drastically as the number of people in an economy, and the number of goods and services available, increases."
"The third dimension to the coincidence of wants is the lack of a coincidence of wants across scales. When individuals want to directly exchange goods of different sizes and values, a partial exchange is not always possible. The person who wants to sell apples cannot exchange each apple for a small part of a car from someone and then assemble the parts into one car. It would be impractical and inefficient to engage in trade with such different goods. Reason suggests some other, more divisible medium of exchange will solve the problem."
— Saifedean Ammous, Principles of Economics
#Nostr #Islam #AustrianEconomics #bitcoin #economics