RE: ECON: Eliezer's calls

From: Billy Brown (bbrown@transcient.com)
Date: Thu Mar 02 2000 - 13:44:57 MST


Eliezer S. Yudkowsky wrote:
> 1) Barter: Here to stay, like I said a few years ago. Next on the
> menu, if the gov't doesn't stop it: Ubiquitous business-to-business
> miniature futures contracts. Following that: Complex barter futures,
> probabilistic spreadsheets.

Barter has always had its niche, and probably will for the foreseeable
future. But there is a simple, fundamental reason why currency works better
for most transactions. Comparing values of a collection of objects without
money is an O(n^2) problem, whereas comparing values in a common reference
currency is only an O(n) problem. It would take a rather large disadvantage
to offset such a large efficiency gain (as witness the fact that people
don't usually revert to barter unless you have really, really serious
problems with the money supply).

Billy Brown
bbrown@transcient.com



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