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Equivalence – the basic principle of market exchange

It is clear from what I have written in previous posts that, thanks to the existence of the market, EVERY participant in the market can get what the other party offers, on terms that he or she finds SATISFACTORY AT THAT TIME AND PLACE. This is confirmed by anyone who buys, for example, a kilogram of apples in a store for 4 zlotys despite the fact that he knows that at the nearest wholesale yard 40 kilometers away he could buy them for 2 zlotys. After all, this would be possible but at a different time and place and under the ADDITIONAL condition that he buys at least a whole crate. All this makes the OPTIMAL choice for this exemplary customer of a market hall vegetable shop is to buy just a kilogram of apples here, paying 4 zlotys. This is the logic of anyone who buys or sells wholesale or retail of any commodity anywhere at any time on BOTH acceptable terms.

The next, extremely important conclusion follows from this. Well, the conclusion of a purchase/sale transaction of anything proves indisputably that the counterparties have exchanged goods of the SAME VALUE between them. Whether it is the aforementioned apples, a car, an apartment in a block of apartments or a villa with a large garden, the amount of money transferred to the seller is always the EQUAL VALUE of the object of the transaction.

 Someone might cringe at this point that I am insulting the intelligence of the Reader by stating such an obvious banality. After all, everyone knows that the value of goods is measured in monetary units.

Yes, the value of goods is usually EXPRESSED in monetary units, because one of the functions of money is the function of MEASURING the VALUE of goods. But in the act of buying/selling, the point is NOT the MEASUREMENT of VALUE, but the fact that each counterparty transfers to his partner a GOOD of the SAME VALUE as the one he receives. These visible and rustling “papers”, as well as those invisible and intangible impulses from the payment card with which the buyer pays, are not any ABSTRACTIVE MEASUREMENT similar to the digits on a thermometer scale, but are REPRESENTATIVES of the GOOD that the one who received payment in them can buy. More specifically, if someone bought, for example, a fashionable T-shirt and paid 100 zlotys for it, he transferred to the seller the RIGHT (remittance, voucher) to receive OTHER GOODS or goods with a total value of 100 zlotys. Thus, he transferred to him the EQUAL value of the purchased goods. What’s more, the buyer of the T-shirt in the example had to earn this paid 100 PLN by selling either some of his own goods or some of his services for this amount. Thus, when he bought the T-shirt in the next transaction, he actually received the EQUAL value of what he himself had previously sold.

The money used in these two transactions acts here as an INTERMEDIARY OF EXCHANGE, or, in other words, as an intermediate good that will eventually serve to exchange for some other FINAL GOOD necessary to satisfy some need.

Money IS NEVER THE FINAL GOAL, as anyone who awaits the receipt of the amount of a salary, pension, or the proceeds from the sale of their own company’s goods knows from autopsy. As soon as this happens, he immediately goes on a postponed shopping spree. WRONG?

That’s what billionaires do, too, as reported in various media outlets. They have stocks and shares in their companies, stately mansions, yachts, etc. tangible and movable assets, but they don’t keep money as such. And when they need to pay for some personal expenses, they use prestigious credit cards with granted unlimited debit, on which they pay horrendous commissions and interest to banks.

In turn, two further conclusions follow from this (the first is that money is never the aim), completely contradicting what both so-called ordinary people and not at all numerous learned economists claim about the market.

Conclusion two: goods of the SAME VALUE are always exchanged on the market, i.e. market exchange is EQUIVALENT.

Conclusion three, which follows logically from the second: THE ACT OF EXCHANGE DOES NOT ENRICH ANYONE.

To be cont’d.

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