Barter with a Medium

Modern day exchange is barter done with a medium. This is called a money. When you buy something, you are trading your dollars for that good. The exchange must make you better off. Otherwise, you never would’ve made the exchange. Both parties must agree to the exchange. It’s always a voluntary transaction. What gets exchanged are not of equal value. Each party must view the other good to be more valuable.

The difference between the value the actor places on a good and what he pays are the profit. It’s certainly possible he finds out at a later date it’s a loss. However, the actor expected to profit. The loss in this scenario is purely psychic. The seller of the good is expecting to profit as well, but his profit is not a psychic one. In the seller’s case, that would be a money profit. He can also figure out at a later date that it was a loss.

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