The myth of interpersonal exchange

"This distinction between the mediate and the immediate sides of an economic act is mythologically represented by the distinction between two persons called the purchaser and vendor, producer and consumer, or the like. 'The purchaser' and 'the vendor' are obviously abstractions, for no one can be purchaser without being at the same time a vendor, and vice versa: every sale is an exchange, and each party sells what he gives and buys what he takes. But they are more than abstractions; they are mythological figments; for there is no such thing as an exchange between persons. What one person gives, the other does not take. I may give a piece of bread for a cup of milk; but what I give is not the bread, but my eating of the bread, and this is not what the other party gets; he gets his eating of the bread, which is an utterly different thing. The real exchange is my giving up the eating of bread and getting the drinking of milk; and there is another exchange, that of his drinking against his eating, on the part of the person with whom I am said to exchange commodities. All exchange, in the only sense in which there can be a real exchange, is an exchange between one person and himself; and since exchange, understood as the relation between means and end, is the essence of economic action, all the essentials of economic theory can be worked out with reference to a single person..." -- R.G. Collingwood, "Economics as a Philosophical Science"


  1. Uh, well, maybe…? Not to knock Collingwood or imply he doesn't write serious things, but doesn't this seem like word play to you?

    1. No, it doesn't. It is basically the concept of opportunity cost. It is also why the fundamentals of economics can be explained in a Crusoe setting.

  2. Arthurian, if you just want to be crude, go elsewhere.