Principles of Economics by Carl Menger Chapter 7.2C - Circulability of Commodities

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Why do some goods circulate easily while others don’t—even if they’re valuable? In this video, we explore Carl Menger’s Principles of Economics, Section 7.2C: On the Circulability of Commodities.
We’ve already seen what makes some commodities more marketable than others. But marketability isn’t the whole story. Menger now takes it further: to circulate well, a good must be resellable by anyone, anywhere, at any time—without losing value.
Take gold: whether it’s held by a miner, trader, or investor, it keeps its value and sells easily. It’s highly circulable. But other goods—like food, used clothing, or personal items—may sell once but are hard to resell. Even if unused, fear of wear, spoilage, or mismatch kills their value in the next trade.
Other limits include:
Legal and technical barriers: Medicines, exports, or specialized tools require knowledge or permits to sell again.
Customization: Items like shoes or hats need expert fitting, which most people can’t offer.
Price uncertainty: Goods with unstable or hard-to-verify prices don’t move easily across hands.
In contrast, goods like grain, metals, or securities circulate well because they are durable, standardized, in wide demand, and backed by public market pricing.
Understanding circulability helps explain why some goods serve as money and others never can. It’s not just value that matters—it’s how easily and repeatedly a good can pass through hands without friction or loss.

❓ Questions This Video Answers:
-What does “circulability” mean in economics?
-Why do some valuable goods circulate poorly?
-How is marketability different from circulability?
-Why is gold highly circulable but food is not?
-What role do legal or technical barriers play in resale?
-How does price volatility affect resale potential?
-What makes securities or grain ideal for repeated trade?
-Why can’t custom goods circulate easily?
-How does circulability relate to money?
-What are the core qualities of a circulable good?

00:00 - Introduction to the Circulability of Commodities
00:12 - Circulability of Commodities
00:41 - Factors Affecting Circulation
01:38 - Specialized Goods and Price Stability
02:32 - Conclusion
03:25 - Outro

#Circulability #ResaleEconomics #CarlMenger