So- last week in the second year lessons we spoke a great deal (perhaps too much) about the way culture influences the creation and estimation of values – secondarily, but importantly, money. I know the lesson wasn’t the most exciting in the world, but what do you think of this aspect of economics and business? Although we all may use the Euro as a means of exchange, etc., does money have the same set of values in all European countries. In this respect it is necessary to think of money in the broader sense. Remember, we said in class that it is a
1) means of exchange
2) measure of value
3) reserve of value
This must necessarily mean different things in different countries since although a tool for exchanging goods and services of value must be used in a society, the social and cultural requirements of measurement (what’s a lot, what’s a little) and reserve (savings versus spending and/or investment) differ significantly. Who can think of some examples? I’ll start you off – the use of a credit card counts as a tool for making payments against a short-term loan, valued in money. While North American and British students are very used to (tied to) their credit cards, do Italian students use them as much? No – because the “trust” issue in banking and the credit market is allocated differently in this country, further away from the formal contracts that make up the retail credit market around credit cards and more toward personal forms of credit interaction – even under the auspices of the formal banking system. Hmmm… why does this happen? There is much to discuss!!!
See you in class!!!!