An economic transaction is not an exchange between two items of equal value (Murray Rothbard)

in #anarchy7 years ago

Murray_Rothbard.jpg

Exchange is the prime basis of our economic life.

Without exchanges, there would be no real economy and, practically, no society.

Clearly, a voluntary exchange occurs because both parties expect to benefit.

An exchange is an agreement between A and B to transfer the goods or services of one man for the goods and services of the other.

Obviously, both benefit because each values what he receives in exchange more than what he gives up.

When Crusoe, say, exchanges some fish for lumber, he values the lumber he “buys” more than the fish he “sells,” while Friday, on the contrary, values the fi sh more than the lumber.

From Aristotle to Marx, men have mistakenly believed that an exchange records some sort of equality of value—that if one barrel of fish is exchanged for ten logs, there is some sort of underlying equality between them.

Actually, the exchange was made only because each party valued the two products in different order.

Murray Rothbard, 'What Has Government Done To Our Money?"
https://mises.org/library/what-has-government-done-our-money