Halloween and Its Candy Economy - Jeffrey A. Tucker - Mises Daily

Halloween and Its Candy Economy - Jeffrey A. Tucker - Mises Daily: "Because there is no taboo in place about trading one's proceeds, the kids also have a chance to participate in genuine market experiences.

For starters, they work hard on their costumes, under the very real expectation that those who hand out candy tend to be more generous to those with better costumes. Nor is the labor done there, for it clearly continues with the long walk around the neighborhood, with the prospect that each house visited will yield a gain of only one or two candies, at most."

"No child can fully control what he or she is given, so it is up to that child to make exchanges with others in order to obtain what he or she really wants, and to do so in a strategic manner so that overall wealth is enhanced."

"During the 30 minutes of active haggling, nine kids sat around the dining room table and participated in a hectic, yet orderly — if complex — interchange, bearing a good deal of resemblance to a Wall Street trading floor.

Some traders shot up and shouted prices, deals, proposals, results, changes in preferences, new resource discoveries. Other traders remained quiet and moved with great subtlety and surprise. The more strategic the plan, the more impressed the other kids were by it."

"It wasn't long before barter relationships, even those involving 3 or 4 simultaneous transactions, did not suffice.

What those around the table needed was some means to achieve indirect exchange. They needed to hit upon a good which everyone would desire to posses because of its more certain, onward marketability among all the other kids.

This entity did not need to be highly valued from the outset by everyone present. What the kids only needed to notice was that there was something which a sufficient number of their group tended to want more than any other competing candy on offer.

It was a short step from there to the dawning of a realization would occur to one or two kids. These would then try to acquire that particular candy, not to consume it themselves, but to use it to trade it for whatever other candy they really wanted to enjoy.

As more and more of the participants copied them, this one candy would come to play a role in more and more indirect exchanges. Child A would accept it from Child B for a less desired kind of candy and would instantly swap it again with Child C who happened to have the goodie he or she really preferred, but who hadn't wanted any of A's originally proffered treats.

This way, this one candy would come to posses a quality none of the others had. It would come to be money."

"Though this problem might seem an intractable one, as it happened, it only took a few minutes for everyone to discover what would become money for the evening: a micro-size Three Musketeers bar."

"all children left the table with smiles and happiness, each feeling as if he or she had gotten a great deal."