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Wednesday, August 19, 2026

The massage therapist and the onion farmer

 I was hearing my niece and another middle aged guy discuss the value of bartering, exchanging things of value instead of using money.  Money is of no intrinsic value, and earning or exchanging money allows the government to tax.  

Later, I developed an idea about this. It is fairly obvious, but suppose an onion farmer wants to get a massage. She can go in and pay for it with 80 pounds of onions. But now the masseur has 80 pounds of onions. He has to figure out how to barter those with some other people, for other things. Nobody is going to want that many onions, maybe. So for every massage there will be too much of something else on hand. He will need a certain number of hours in the day to negotiate a lot of deals. A lot of people won't want to do regular business with the farmer, because they don't want that many onions at a time. 

Now, would you like $80, or $80 worth of onions? Money is fungible, so you don't have to worry about having too much of it on hand. Some barters are beneficial and easy, maybe, but as an overall system it isn't practical.  

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