Monday, April 07, 2003 :::
I once saw a comparison made between daylight savings time and the use of different currencies in different economies. (I think I got this from Paul Krugman, who got it from Milton Friedman.) As the sun rises earlier, I figure I may as well get up earlier, get things needing doing done earlier, and get home to go out and play before it gets dark; but my schedule is linked to someone else's schedule (say the train's, or the grocer's), it becomes rather more difficult to make that change, even if everyone else wants to change, too. What we do is just change the reference; keep calling the time I get home "6:00", but move it earlier, and everyone keeps the same schedule they always did.
What this has to do with currencies is that local prices will tend to track each other; a lot of the expenses we pay for, certainly in and near cities, are real estate, and the cost of service industries will directly correlate with the cost of living for the relevant servers; to the extent that a region has a trade deficit or surplus in those commodities that can be transported, it may in the long term find all of its prices moving down or up respectively in order to make its goods cheaper elsewhere or elsewhere's goods cheaper there, and if each merchant finds itself cutting prices separately from eachother and from each wholesaler, a lot of money can be lost and the economy can generally grind down. It becomes much easier on everyone if the local prices are denominated in a different currency than prices elsewhere, whereupon again the reference can change, moving all prices but leaving relative prices perfectly fixed.
What I really don't get about daylight savings time, incidentally, is why we wait until the days are, what, twelve and a half hours long before we go to it in the spring, but don't reset to the standard clock until there are only ten hours of daylight left. I would think this should be more symmetric.
::: posted by dWj at 11:39 AM
