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Cake day: October 10th, 2024

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  • The issue is that the production of those resources requires money.

    Not just as a means of exchange - the world is far too large and complex to run on barter - but also, through the mechanism of markets, as a means of resource allocation.

    Say you could go and grow 1kg of potatoes, or mine 1kg of copper ore? How do you know which to do?

    In a society with money and markets, you look at the prices!

    Say you have your 1kg of copper ore. Do you sell it now, or wait?

    In a society with money and markets, you guess[1] what the prices will be in the future.

    Without money, and markets, large industrial societies fail. That’s not to say that markets are a perfect signaling mechanism - malinvestment is a thing, and can certainly be exacerbated. But the known alternatives (and we’ve tried them) have led to poverty and misery.

    [1] I know, I know, …