Market Clearing in Friend Groups: A Cambridge-Area Case Study

So, I’m doing this copyediting project for a friend who’s just translated a book on monetary theory from turgid German, and in the midst of the author’s discussion of how households might arrange to do a little bills-of-exchange shuffling around in order to settle accounts between themselves, I am reminded of a practice in which I used to engage with friends in the graduate school and church planting years (I’m not sure how much we ever actually employed the practice: I think we mostly just felt pleased with ourselves for thinking it up.)  Here’s how it worked:

When you’re part of a friend group, this is what happens: you go out to Ruby Foo’s, and you go to the place with the great brownies near Porter Square, its name started with a C, and then you rent a movie (remember renting DVDs???), and then one of you is meeting another of you outside the Div School, and the one who is being met wants a venti soy latte, and inevitably someone (the identity of this person varies) doesn’t have cash, and so someone covers, and this happens ALL THE TIME.  And there has to be a very informal, and yet not completely loosey-goosey way to keep track of it.

And so we invented the cowrie shell.  A cowrie shell is a purely notional unit of currency, pegged to the local value of a grande regular-milk latte (which varies between New York and Cambridge and Northampton– but was usually, at that time, around $3.50).  And so when you don’t have cash, or your friend doesn’t, you say “I owe you a cowrie shell,” and you kind of kept in mind how many cowrie shells you owed, and then when one was owed to you by someone else, what might happen is that if they were owed a cowrie shell by the person to whom you owed one, you might cover their portion of renting Mystery Science Theater 3000, and that would clear the market.

It would not stand up to auditing.  But it worked for us.

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