Here is an excellent demonstration of the Austrian idea that money CANNOT originate through edict

Economics Economics Questions
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or arbitrary social contract.

Here is the story, on facebook one girl had an event and she invited guests (by attending you show an interest in the idea, this gives her an indication of whether she should start a website). She has an idea of beginning a website where women trade clothes with each other. Each time you give your clothes to somebody you gain points and with those points you can ‘buy’ other times. That way women do not have to constantly spend hundreds for a dress they will wear for just one night.

The idea is simple enough but the biggest challenge is how to establish a money-price system. Nobody knows how things should be priced nor does anyone know how to kick start trading. Barter cannot work as it is too inconvenient.

Many people have suggested that we have a dollar-point system, so a dress that costs $30 = 30 points however some people disagree because two items that cost the same will not necessarily have same demand. Some like me believe in a free market system where people price an item however they please and they can increase or reduce the price if they feel a good is in high/low demand.

Another challenge is how to begin trading. Since no member has points to begin with that means all of us have to ‘sell’ however if we are all sellers trading would cease. We can’t just give all members 100 points to start with because that way people would ‘buy’ clothes yet not have to have had to ‘sell’ something first.

If you read through the wall posts it is interesting to see that no one can seem to separate points from the dollar, I guess it shows that money cannot originate arbitrarily as a thing in itself. Mises also said that money has to originate from a commodity or another item society demands.

I think it also shows that money develops through barter.

Take a look at what people have said:

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Is this your comment:

“This is very interesting tbh becasue is a money problem. In one sense we are all trying to establish a money-price system yet we see that we can’t develop our money through edict or governance.”

It’s gotta be. I can’t believe there is another girl there who just happends to be familiar with Mises Regression Theorem.

Little does the owner know how devastating your comment is to her idea.

Actually, the problem there is even more basic. She wants to avoid both barter and the use of real money. She is attempting to setup a type of socialist quasi-market. It’s impossible!

Either they barter or they’ll have to use real money out of their own pockets. A point system will be nothing but a type of credit system where you can buy credit points for future purchases. But people will have to pay real money out of their pockets or it cannot possibly work. The only other option is to barter the dresses.

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How so very true.

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Yes that was my comment.

I think you are right, i think in the end they will have to use dollars because there is no way they can establish a point system independent of dollars.