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Friday, January 27, 2006

Dave Barry Knows All about Money

Dave Barry's new book, Dave Barry's Money Secrets: Like: Why Is There a Giant Eyeball on the Dollar? will surely become a must read. I've just ordered a copy on the basis of this excerpt. Here is one very short clip from that excerpt:

If our money really is just pieces of paper, backed by nothing, why is it valuable? The answer is: Because we all believe it's valuable.

Really, that's pretty much it. Remember the part in Peter Pan where we clap to prove that we believe in fairies, and we save Tinker Bell? That's our monetary system! It's the Tinker Bell System! We see everybody else running around after these pieces of paper, and we figure, Hey, these pieces of paper must be valuable. That's why if you exchanged your house for, say, a pile of acorns, everybody would think you're insane; whereas if you exchange your house for a pile of dollars, everybody thinks you're rational, because you get... pieces of paper!

He really does understand, doesn't he: Something serves as money only because it is generally accepted in payment for goods and services. [h/t to King Banaian at SCSU Scholars]

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Posted by EclectEcon on January 27, 2006 | Permalink


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Money is miraculous. We are a faith-based society. Trust is what has allowed us to create such fabulous wealth. And that is why governments must work hard to maintain integrity in all matters financial. I'll say no more.

Posted by: Richard Ball | 2006-01-27 7:50:59 PM

hmmm....$14 US and $23 Canadian. While the dollar hovers around 0.87. American paper better than Canadian paper, obviously

Posted by: George | 2006-01-28 6:18:38 PM

The difference in prices between Amazon.ca and Amazon.com is often this large. It is annoying, but once you add in the brokerage fees and the fact that "free" shipping is not available in Canada from Amazon.com, ordering from Amazon.ca looks more attractive.... until you realize that many items take several weeks for delivery.

Posted by: EclectEcon | 2006-01-28 7:50:52 PM

Actually, that Dave's comment is pretty much accurate. If you asked the average person why money is valuable, they'll tell you that you can buy stuff with it. They won't tell you 'because it is backed by the ability of the government to blah blah blah'. Because other people accept it as valuable, it is valuable. We have faith that others will also believe it is valuable.

Posted by: Tp, | 2006-01-30 12:17:20 PM

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