Coincidence of Wants
Tuesday, June 29th, 2010
To get to know Andy and Bill, two of the main character’s in this post’s story, you should check out the previous post.
Or I can sum up up what you need to know from the previous post in a single sentence:
Andy said, “Hey Bill, you give me this, and I will give you that as payment in kind.”
In this post we elaborate further on the tale of Andy (and Bill). Andy’s method of paying his way through life is bartering his live performance of his alphorn for goods and services he needs to survive. Bill owns a bar, called Bill’s Bar. Simple, right?
All is great with Andy as he scores a delicious and nutritious meal of bar food and local moonshine in exchange for a riveting few hours of alphorn cover hits from the French Swiss. Andy finishes his last encore with Sinfonia Pastorella for Alphorn and String Orchestra by Wolfy’s pops Leopold Mozart, then packs up and heads home for the night.
As Andy drags his gigantic wooden pipe home, the door to his bachelor pad is blocked by Larry the Landlord. Last month, Landlord Larry gave Andy a month of free rent, in exchange for Andy playing alphorn at his Highlander costume party. (Andy knew this wasn’t exactly a perfect theme to fit with Swiss mountain music, but it was a month of free rent!) Anyways, Andy stays for a month rent free, his music is marginally well-received at the Highlander party, and he thinks all is fine, right?
Wrong. Larry is pissed. In exchange for his friends ribbing him for mixing genres and themes, he’s had a musician rehearsing for hours daily next door to him for an entire month. And not just any instrument, but one with practical applications for long-range communication and cattle calling. Larry’s had his fill of alphorn music.
Despite the beginnings of tinnitus, Larry is thinking about hiring Andy the alphornist for next summer’s party, which he’ll theme more appropriately around the Swiss Alps. However, it’s almost winter, and Larry has no need for alphorn services for several months.
“I believe the appropriate metaphor here involves a river of excrement and a Native American water vessel with out any means of propulsion” – Dr. Sheldon Cooper, The Big Bang Theory
Normally, Andy would have no trouble propelling himself to a solution and out of the metaphor with his alphorn. Instead, he’s stuck, and we’re now going to come up with an alternate solution.
In-kind transactions have several problems, most notably timing constraints.
The quote above is cited from a Wikipedia entry I stumbled across that discusses this example in much less detail and much more boredom that we get when we make an alphornist the hero of our story. That Wikipedia entry, called “Coincidence of Wants” can be found here.
To quickly summarize Wikipedia, the article on coincidence of wants points out that “money tends to emerge naturally” to bypass the limitations “imposed by the coincidence of wants in an in-kind economy.”
So what’s the point?
Randy Pausch ended one of his last lectures before he died by stating, “Time is all we have, and some day you may find out you have less than you think.” This means that time is really the most precious and limited commodity of all. Peter Drucker said that in The Effective Executive: that you can hire more people but you can never really increase the amount of limited time you have.
You can generate, create, or acquire a virtually unlimited quantity of items that possess value. You can work more live gigs and get paid for them. You can create more products and sell them to any one of the billions of people on the planet in exchange for money or more valued items (like stocks or company ownership). Ultimately though, you can’t create more time. That’s one of the main reasons why we have money – to improve our ability to manage our time.
Money = time management tool.
One more thing: the whole reason I started on this stick figure diagram diatribe was as an emotional response to a conversation I had with someone regarding performance royalties, and rights publishing, and promotional opportunities, and management contracts, and similar things along that line. The two-hour call had many deja-vu moments. Stick with me and I’ll get to how this all relates to selling songs and musical instruments in today’s economy. I promise.
In the meantime, please watch this video on time management by Randy Pausch, and think about what else is going on in your life that you can turn into more available time in your life, through the use of trading money or otherwise?
Tags: Business, finance, money, Productivity, time