Meters are a unit of length. Feet are a unit of length. Furlongs are a unit of length. All of these are interconvertible; none of them are any MORE a universal conversion than any other unit of length.
Dollars are a unit of value. Loaves of bread are a unit of value. Gold coins are a unit of value. All of these are interconvertible; none of them are a universal conversion.
In a business that has a metabolic cycle consisting of trades 1 Foo for 2 Bar, and 1 Bar for 2 Foo, which ought to be the unit of account? How do we break the symmetry?
If Foos have significant carry costs (e.g. perhaps Foos are big, bulky things and you have to pay for a warehouse to hold them), but Bars have comparatively insignificant carry costs (e.g. perhaps Bars are little seed-like things, and it's easy to carry lots in your pocket) then you want your growth to primarily happen in Bars.
If you want growth to primarily happen in Bars, and you use Bars as your unit of account, then in considering what to do next (like a chess algorithm looking forward at the tree of possible futures), you can cheaply approximate the total utility of a situation by the number of Bars you have in that situation. The reduced computational cost in not having to convert is what breaks the symmetry.
Meters are a unit of length. Feet are a unit of length. Furlongs are a unit of length. All of these are interconvertible; none of them are any MORE a universal conversion than any other unit of length.
Dollars are a unit of value. Loaves of bread are a unit of value. Gold coins are a unit of value. All of these are interconvertible; none of them are a universal conversion.
In a business that has a metabolic cycle consisting of trades 1 Foo for 2 Bar, and 1 Bar for 2 Foo, which ought to be the unit of account? How do we break the symmetry?
If Foos have significant carry costs (e.g. perhaps Foos are big, bulky things and you have to pay for a warehouse to hold them), but Bars have comparatively insignificant carry costs (e.g. perhaps Bars are little seed-like things, and it's easy to carry lots in your pocket) then you want your growth to primarily happen in Bars.
If you want growth to primarily happen in Bars, and you use Bars as your unit of account, then in considering what to do next (like a chess algorithm looking forward at the tree of possible futures), you can cheaply approximate the total utility of a situation by the number of Bars you have in that situation. The reduced computational cost in not having to convert is what breaks the symmetry.
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