Over at Circle Bastiat – the Mises Institute’s new blog – Doug French has this fascinating post:
A number of things have served as money throughout history: shells, tobacco leaves, even cigarettes in POW camps and prisons. Now those operating in the urban drug trade are using Tide detergent as currency.
Supermarkets and drug stores in some areas of the country can’t keep the detergent on the shelves. During a recent police raid on a drug dealer’s home in Washington D.C., the police found what they expected—cocaine—but also noted the 20 large bottles of Tide on the dealer’s shelves.
It turns out users paid the dealer in Tide rather than U.S. dollars. And why not, Proctor & Gamble’s best selling laundry soap is holding its value better than the government’s greenbacks. The flame-orange bottle makes Tide recognizable. It’s expensive, selling for up to $20 for a large bottle, so it has relatively high value per weight. The bottles even have handles, making it portable. It’s divisible- a person can trade in half bottles and so on. It doesn’t spoil, making it durable. And, everyone has to wash their clothes. So Tide is valuable for other uses than just trading. The fiat dollar does not do near as well in satisfying these requirements as a suitable money.
Read the rest here.
The always-clever Robert Murphy has a great link on his blog from yesterday, check it out.