Money out of thin air

December 8, 2013 by Indro

Those who are familiar with market economics would definitely recognise the phrase. It is a metaphor. This one is literal, though. Someone is selling cans of air collected from his hometown which presumably has fresh air. Those of us living in cities would know the difference in feeling between inhaling the city air and the pure fresh air in the hills around, say Mont Banc in the French Alps. Once we recognise that it is a matter of whether some of that feeling could be supplied in part — in which case we will pay for part of that value — and as long as the cost of supplying that value is lower than the value itself there is a scope for placing a price in between and carrying out a mutually beneficial trade in the market.

Never mind the economic language. The point is as long as someone is willing to pay to take a couple of puffs of that sweet air for a price there is a scope for an entrepreneur to make money and everyone is happy in the process. Errr…. I don’t like the way this whole thing is beginning to sound. Especially with President Clinton being in the news, again, recently regarding his statement about smoking but not inhaling … and so not liking it because it did not make him happy as a result …. I need to stop the writing because it is going down a slippery slope!

The idea is actually notable and my bet is that eventually it will catch on almost like the bottle of Evian. Economically it may be even more feasible for air is more easily compressed than water without destroying its properties … isn’t it?

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Cheap Talk

A blog about economics, politics and the random interests of forty-something professors

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