Undercover Economist

August 20, 2010 10:41 pm

Dear Economist: Is garlic bread really fungible?

Assuming that the loaves I bought could be exactly shared equally, had I been correctly using established economic terminology?

Having bought identical garlic breads for my wife and myself, I proposed that we should equally share one immediately and equally share the second later. She was unhappy with this, proposing that she eat half of hers and that I eat half of mine. When I suggested that half garlic breads should be fungible, she accused me of making the word up. Assuming that garlic breads could be exactly shared equally, had I been correctly using established economic terminology?

Hungry Chris, Teesside

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Undercover Economist

Dear Hungry Chris,

“Fungible” is an inherently amusing word but you did not invent it and you have used it correctly, assuming – as you claim – that the tasty loaves were indeed identical. Fungibility is usually used of commodities such as Brent crude or 24 carat gold, or currencies. All these are fungible because a reasonable person wouldn’t care which particular barrel of Brent crude or which ounce of gold they received.

A new idea of fungibility has emerged in recent years, which concerns monetary transfers such as foreign aid or politicians’ expenses. If an MP claims £10,000 in expenses for something he was planning to buy anyway, it doesn’t matter whether he sends in receipts for secretarial expenses, a train season ticket or a duck island. All we know is that he is £10,000 better off when his expense claim is approved. In short, expenses are fungible.

But your story raises a deeper question than that of terminology: one of marital bliss. In the classic analysis, “Love and Spaghetti”, economist Ted Bergstrom modelled two lovers who both enjoyed Italian food but also loved to watch the joy in each other’s faces as they shared spaghetti. You and your wife, in contrast, are behaving like a pair of bond traders.

Your grasp of economic terminology is quite secure. I am not so sure about your marriage.

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