Economics Dictionary of ArgumentsHome
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| Exchange: In barter trade, the simplest form of exchange, goods or services are exchanged directly for one another without using a medium of exchange such as money. See also Economy, Trade, Markets._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Exchange - Dictionary of Arguments
Rothbard III 85 Exchange/Interaction /economics/Rothbard: The major form of voluntary interaction is voluntary interpersonal exchange. A gives up a good to B in exchange for a good that B gives up to A. The essence of the exchange is that both people make it because they expect that it will benefit them; otherwise they would not have agreed to the exchange. A necessary condition for an exchange to take place is that the two goods have reverse valuations on the respective value scales of the two parties to the exchange. Knowledge: Without knowledge of the other person’s assets, no exchange of these assets could take place. Rothbard III 86 It is clear that the things that must be exchanged are goods, which will be useful to the receiving party. The goods may be present or future goods (or claims to future goods, which may be considered as equivalent to future goods), they may be capital goods or consumers’ goods, labor or nature-given factors. At any rate, the objects of an exchange must be scarce means to human ends, (…). if the goods are available in supplies of homogeneous units, (…) in determining how far exchanges of the two goods will go, the law of marginal utility becomes the decisive factor. Rothbard III 87 Marginal utility: (…) as Jones continues to exchange with Smith units of X for units of Y, the marginal utility of X to Jones increases, because of the law of marginal utility. Furthermore, the marginal utility of the added unit of Y continues to decrease as Jones’ stock of Y increases, (…). Eventually, therefore, Jones will reach a point where, in any further exchange of X for Y, the marginal utility of X will be greater than the marginal utility of the added unit of Y, so that he will make no further exchange. Furthermore, Smith is in a similar position. Since it takes two to make a bargain, Jones and Smith will exchange units of X for units of Y until one of them reaches a point beyond which further exchange will lead to loss rather than profit. Rothbard III 87 It is almost impossible to overestimate the importance of exchange in a developed economic system. Interpersonal exchanges have an enormous influence on productive activities. Their existence means that goods and units of goods have not only direct use-value for the producer, but also exchange-value. Rothbard III 100 (…) in explaining the origins of society, there is no need to conjure up any mystic communion or “sense of belonging” among individuals. Individuals recognize, through the use of reason, the advantages of exchange resulting from the higher productivity of the division of labor, and they proceed to follow this advantageous course. >Division of Labour/Rothbard, >Specialization/Rothbard, >Society/Rothbard. Rothbard III 102 Value: (…) [in exchange] each individual values more highly the good he gets than the good he gives up. Otherwise, the exchange could not be made. Therefore, for each exchange there is a double inequality of values, rather than an equality, and hence there are no “equal values” to be “measured” in any way.(1) >Terms of trade/Rothbard. Rothbard III 187 Direct exchange/barter: The only exchange so far discussed, however, has been direct exchange, or barter -the exchange of one useful good for another, each for purposes of direct use by the party to the exchange. Although a treatment of direct exchange is important for economic analysis, the scope for direct exchange in society is extremely limited. In a very primitive society, for example, Crusoe could employ Jackson to labor on his farm in exchange for a part of the farm produce. There could, however, be no advanced system of production in a direct-exchange society and no accumulation of capital in higher stages of production - indeed no production at all beyond the most primitive level. >Indirect exchange/Rothbard. 1. Cf. Ludwig von Mises, Human Action (New Haven, Conn.: Yale University Press, 1949),, pp. 204-06; and Menger, Principles of Economics, pp. 192-94, 305-06._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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