Tuesday, July 27, 2010

Iron Man is Impressed With Barter Economies

Mr. Macken starts a barter economyInvincible Iron Man #28 by Matt Fraction and Salvador Larroca, Marvel Comics (2010)

Stark Resilient is officially underway as Tony Stark tries to piece together his life, build a new Iron Man suit, and kickstart his new company, with the goal of creating the first ever electric car powered in full by repulsor technology. First step? The interview process.

Here, Stark interviews a Mr. Macken. He ran an electronics repair shop in Detroit, fixing televisions and such primarily for senior citizens. However, the community he worked in was poverty-stricken and faced as astonishing 88% unemployment rate. This meant that most of his customer base were out of work and could not actually afford to pay for their repairs. So, Mr. Macken decides to fix the televisions anyway in exchange for direct goods and services, such as a nice home-cooked meal and some plumbing in his home. This apparently "created a kind of running barter system in lieu of cash. An underground economy." And it impressed Tony Stark.

First, which community is this that is running an 88% unemployment rate? And how small is this community? I did a quick search and couldn't find anything. Maybe the community is a few blocks populated mostly by senior citizens, who likely would have been retired anyway. Though, that wouldn't even count in the unemployment statistics since unemployment refers to those actively looking for work. The people who Mr. Macken tends to serve seem to be just good, old-fashioned poor.

Second, how big could this barter economy have possibly been? Tony makes it seem like Mr. Macken launched an entire system where everyone in this community just swapped chickens for checkups. That might be, but my guess is that it was really more along the lines of a barter system relegated to television repair. I doubt this would have made a major impact worthy enough to gain Tony Stark's attention.

Plus, I doubt this economy's sustainability. As we all know, there are several problems with barter economies, the least of which is not having a standard by which you measure value. For instance, someone with a particular skill or trait could exhaust it after one use. Take, for instance, the case of the repair man offering to fix Mr. Macken's plumbing in exchange for TV repair. Suppose the gentlemen later needs his radio fixed. He's already fixed the plumbing, so what else does he have to offer?

I don't know about you, but I don't trust this "Mr. Macken" and his crazy get-rich-quick schemes. Not the kind of employee I envision for Stark Resilient.

17 comments:

Tough_Waters said...

You seem to make two assumptions. One that services are not transferable. "Suppose the gentlemen later needs his radio fixed. He's already fixed the plumbing" If his neighbor need their plumbing fixed, He could trade with them.
Two that this barter system is a whole economy. I would argue that is just a sub-system that allow people to remove inflated prices out of the deal.

Will said...

On a somewhat related point, there was an interesting story about a 17 year old who, through trades, turned his old cellphone into a Porsche in only 14 trades.

lawnmower boy said...

D'oh!
I knew I could have got more for my house than that old cellphone if I'd just shopped around.

But I really needed to make a phone call!

Algosome said...

In computer science complexity theory terms, the number of transactions needed for every member of a group to get the item they need in a barter economy goes up as the square of the number of community members, or at worst exponentially if you have to make multiple trades like the guy with the cellphone.

If you use a fungible intermediate value token, like clay tablets or giant carved stone wheels or round pieces of metal, the number of transactions is linear in the number of community members. That's why we use money these days.

RJ Moore II said...

Without a unit of account you will be stuck in a very primitive economy. There's no way to engage in economic calculation.

88% unemployment? I'm pretty sure nowhere that wasn't being bombed has ever had an unemployment rate of 88%

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