Dampening of Ups and Downs

Of course, whether it’s reference goods or just any goods, barter has a series of limitations: goods may be difficult to drag around, perishable, not wanted by those who have the goods we want, but also their availability may vary in time. How can we exchange the fish I will catch tomorrow with the eggs you have today? How can a farmer have what he needs to grow the harvest before he has the harvest to pay for it?

When each individual specializes in a product, each product may be subject to ups and downs, while one has to survive everyday, and so the society has to dampen those ups and down: today we all eat your eggs, tomorrow we will all eat my fishes.

This is one out of the many ways in which group cooperation increases the wealth of individuals: with this dampening function it makes specialization possible and thus makes all its ensuing advantages possible, too.