What does it mean for a transaction to be fungible, or non-fungible? Here’s the dictionary’s definition for the word when googled;
fun·gi·ble/ˈfənjəbəl/Learn to pronounce adjective LAW adjective: fungible
(of goods contracted for without an individual specimen being specified) able to replace or be replaced by another identical item; mutually interchangeable.”it is by no means the worlds only fungible commodity”
Wikipedia talks about fungibilty in this way:
In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable, and each of its parts is indistinguishable from another part.[1][2]
For example, gold is fungible since one kilogram of pure gold is equivalent to any other kilogram of pure gold, whether in the form of coins, ingots, or in other states. Other fungible commodities include sweet crude oil, company shares, bonds, other precious metals, and currencies. Fungibility refers only to the equivalence and indistinguishability of each unit of a commodity with other units of the same commodity, and not to the exchange of one commodity for another.
In the sense of a transaction being fungible or non-fungible I offer the following understanding. If you buy your gas at a Holiday station, whether it is on the corner leaving your neighborhood, or the one near your place of work or the one half way to your vacation destination, the transaction is the same. One purchases a indistinguishable commodity which is paid for with some form of currency of consistent value. The transaction starts and ends in a matter of minutes. It is fungible.
Now consider a different type of transaction, one that happens in a neighborhood. Every morning nine to ten kids gather at a bus stop to catch a yellow bus to the local elementary school. School starts at 9am and ends at 3pm. Most kids stay for after school programming so their parents have a chance to get home and pick them up before heading home to pull something together for dinner.
Now say it is mid January in a northern climate, and a mega storm develops predicting twelve inches of snowfall. The schools close at noon before buses full of children slide into the ditch and the roads are gridlocked as the snowplows can’t keep up with the descending flakes. Afterschool programming is cancelled leaving working parents in a bind.
One of the parents, call her Amanda R, works third shift at the hospital, and has the means to contact everyone as the families went through Baby-and-Me classes together at the community center. She lets them know she’ll be at the bus stop to collect the first-through-six-graders and let them hang out at her house. “Drive safe!” emphasises the text.
If the families would have taken personal time from work to the tune of four hours each, that would have amounted to thirty-two work hours. (With an average wage in Minnesota at $58K/yr, that comes to $892). Amanda R doesn’t expect payment for her offer. She knows that over the course of their elementary school experience there will be a track and field day, and the third grade band concert (which only a parent can appreciate) and the fifth grade science fair and the list goes on. There will be plenty of opportunities for parents to stand in for each other.
The work Amanda R did to allow parents to stay at their jobs while keeping their kids safe from harm was a non-fungible transaction. She won’t receive any immediate payment or exchange for her time. She can’t trade those hours with another neighbor down the block. What she’s betting is that she will receive assistance many times throughout her kids’ school experience.
Certainly it might be more fun to work for cash and spend it on concert tickets or new clothes or a trip. But the beauty of non-fungible transactions is that they are held within the group and often engaged when the stakes are high.
Home Economics 