Fungible Goods

Recreating (and advancing) pk’s censored domains: & / Teaching / Society / Civilization / Commerce /
@ K. c. 2004

Real money is fully fungible.
(and his Austrians)

Fungibility is an important concept in law, in banking … in lots of areas. You put a dollar in the bank, you take a dollar out of the bank. No one cares if it’s the same dollar. You needn’t bother to complain to the teller that last week you gave her US dollar bill serial number X12… and this week she’s giving you US dollar bill serial number Y43… No: you gave her a dollar, now she’s giving you a dollar. They’re “the same”: they’re fungible. Dollar X12… had your kid’s crayon mark on it; dollar Y43… doesn’t. So what? From a monetary standpoint, either is worth “a dollar”.
Ah, but what if dollar Z67… had a crayon drawing by Picasso on it? Now it’s presumably worth much more than one dollar. So don’t put that one in the bank “as a dollar”; frame it. Put it in the safe deposit box. That dollar is no longer fungible: in a market that values Picasso drawings.

Same with gold. Banks, treasuries, nations, markets … don’t identify every gold atom, give each a serial number. The molecule of oxygen in your lungs does the same thing that the same or another molecule of oxygen did in the lungs of Genghis Khan. You breathe it. Your lungs absorb it, or you exhale it. On the one hand it combines with other things; on the other, it’s part of the general air. It can go into the cloud, into the truck’s carburator, or be breathed by a duck.
(And physicists (deliberately) don’t care if one of the electrons in the second ring is the same electron as when the atom was in Samson’s lung.)

What if the dollar the teller gives you though is marked by the bank? What if it’s marked by the FBI? What if it’s got that dye on it that they use to try to catch bank robbers? Then you have cause for complaint. It’s no more fungible than your dollar with the Picasso drawing on it. Now it’s worth not a dollar but a jail sentence, lawyers’ bills for a week that you can’t earn in a year.

OK, pk always has to point out exceptions, but those exceptions chose the wrong path. Here’s the path I’m really aiming for: the bully breaks your nose, the court awards you medical expenses plus (the jury didn’t like you) $50 for pain and suffering. Is your pain and suffering really fungible with $50? with $5,000? with $5,000,000? The law seems to think so.

2013 11 03 The best treatment I’ve seen on this problem comes from Jared Diamond in his The World Until Yesterday: What Can We Learn From Traditional Societies? See his report on the New Guinean concept of sorry-money.

The magician produces a deck of cards, says, “Here is a deck of ordinary playing cards.” Maybe the magician breaks the cellophane seal on the deck’s packaging to suggest that it’s just been purchased in an ordinary store, the same as you could. The magician fans the cards, waves them around to prove that the deck isn’t rigged. If the magician has done his homework, he can switch back and forth between a “real” deck and the rigged deck, between fannings in exactly the same way that a skilled politician, caught in a lie, can switch in a truth: and then switch the lie back in as soon as the pressure is off. The audience, if the magician plays his cards right, sees only one deck; even when there may be two: or more. Are these decks fungible? (I’m not saying that the law says that they are; I’m trying to stimulate awareness of the concept so that we can pursue analogies fruitfully. Then we may be better able to distinguish useful fungibles from false fungibles.)
The audience is supposed to believe that the deck has the fungibility of identity: it’s supposed to be perceived as just the one deck: itself.
pk suggests that there are more magicians among the legislators, the bankers, the lawyers … than there are scientists, (real) English teachers, skeptics, debunkers …
As always, there’s more to be said; but the above should at least kick the point off.

Facts are endlessly fungible.
The Bush administration
(according to Sierra)

Hey, how about a personal application? Take schooling: I was coerced to go to school not only by my parents (who conceivably had a right to coerce me) but by the law of the land. (What right does it have to coerce me if I’m harming no one?) The coercion was justified by assurances that “education” would help me in the long run: help me to make a better living. On the contrary, the more education I’ve consumed, the more unemployable I become. Then the private universities enticed me: give us your money and your time and we’ll make you even more (un)employable. When it came time for me to say something important, no one at the universities understood a word I said. Neither did the public, but then the public hadn’t apprenticed me, taken my tuition. Decades later, I’ve never received a refutation (proof that they did understand me, or arguments that what I said was wrong), an apology, compensation (fungibles again) … When I spoke, they interrupted me. They had the authority to do so.

Oedipus slips coercion
thanx aix

I’ve never met a lawyer, I can’t imagine a lawyer, who would understand my objections. But say I did. Say I sued. Say I won. What? $50? $5,000? $500,000. Would it be fungible? Really. Dollars traded for lies, for misrepresentation, for fraud?
Even if I won I bet the fraud would continue with everyone else.
But don’t worry: no lawyer would take the case, knowing no court would hear it. And no jury would admit that they’d been duped too.
Oh, and how’s this for false-fungibility: one opinion is as good as another.
Believe me, I don’t trust authority: the priest over the skeptic, the licensed teacher over the smart twelve year old; but with the exception of matters of taste, opinions are not equal. Some match experience. Most match only pathology.

Real Money Is Fully Fungible

bkMarcus didn’t let me long get away with a key oversight:

From: bkMarcus Date: Tue Oct 12, 2004 1:08:12 AM US/Eastern To: Paul Knatz Subject: Re: fungible
[old URL]
One problem that someone will eventually point out is that you’ve only got half the concept of fungibility.
You focus on the idea of substitutability. But there’s also divisibility.
An ounce of gold is fungible not just because a different ounce of gold has the same exchange value, but because cutting it in half should produce two pieces each worth about half the value of the original. In this sense, the dollar bill is not fungible. Half the bill isn’t worth 50 cents. This is the difference, in essence between real money and money substitutes, where the gold ounce coin is real money and the $20 bill isn’t. Real money is fully fungible. The bank notes used to stand for real money, but were understood not to be real money. Half a symbol isn’t worth half as much as a whole symbol.

Musical Fungibility

My point above about dollar bills with different serial numbers reminds me of something I read now an old man I’d never heard of before: people with perfect pitch do not regard Amazing Grace played in G as the “same” song as Amazing Grace (or Shortnin’ Bread) played in F (or C, or Gb …)


About pk

Seems to me that some modicum of honesty is requisite to intelligence. If we look in the mirror and see not kleptocrats but Christians, we’re still in the same old trouble.
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