Talk:Fungibility

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Contents 1 Fungibility and food 2 Missing words regarding international relations 3 Fungibility and Law 4 Gold 5 What fungibility is 6 Disputed tag

[edit] Fungibility and food

Moved from article:

Could someone elaborate on this? Why are fungible food crops considered bad? Who thinks this way?

Well perhaps some people have good reason for thinking this way.

Removed from article:

With the advent of genetically modified organisms and increasing concerns over pesticides and other contaminants, fungible trade in food crops is now considered by many to be a Bad Thing.

This does not make sense as it is. It need elaboration. We need to know what "fungible trade in food" is. Does it mean "trade in fungible foods"? Whatever it means, someone needs to explain why it is considered a bad thing. mydogategodshat 01:53, 15 Feb 2004 (UTC)

[edit] Missing words regarding international relations

This sentence is clearly missing a word or two: "International relations theorists who believe that power regard different types of power as reinforcing each other." What word should be inserted between "that power" and "regard different"? mikejurney Tue Apr 6 14:02:34 EDT 2004

Maybe the author was trying to say:

International relations theorists who use the term, believe that different types of power, are interchangable and can even reinforce each other. For example, if power is fungible, then a state can translate its economic power into military power, and vice versa. . . .

mydogategodshat 23:43, 6 Apr 2004 (UTC)

It's possible, but adding that wording is a fairly significant change. It reads to me like any number of mutually exclusive things could follow "power". I suppose in this case it's better to leave it misworded than it is to fill in possibly incorrect wording.

mikejurney Sun May 2 15:10:43 EDT 2004

I just came back to this, and I think mydogategodshat is, in essense, correct. The feel I get from going back over it is that the original author was trying to say that IR theorists believe that different types of power are interchangeable (as opposed to economic theorists, who state that different types of goods are interchangeable). It makes sense, and I think it's consistent.

mikejurney Tue Sep 21 21:05:20 EDT 2004

I am the original author, and this could have been done much more easily if someone had just dropped a note on my talk page. Anyway, mikejurney, you are correct in your interpretation. I originally meant to write "International relations theorists who believe that power is fungible regard different types of power as reinforcing each other" but accidentally omitted the words "is fungible". Anyway, thanks for working to make the article better. —Lowellian (talk) 23:13, Feb 23, 2005 (UTC)

Would it be better if the mention of US and India are substituted by "Country X" and "Country Y"?

[edit] Fungibility and Law

Does someone more qualified (an economist and/or lawyer) than myself feel that adding a section or comment on the use of the term in legal proceedings would be useful? Isn't it essentially the same as the first definition listed?

[edit] Gold

Since there are different pureties of gold, shouldn't the article state "gram of pure gold"?

[edit] What fungibility is

I have changed the introductory sentence to more correctly say what fungibility is. But the article still (currently) says this:

In finance, fungibility refers to the ability of one security to be easily converted into another.

No! Not true! That is the ability of a security to be traded. Fungibility is different. A bearer bond is fungible, a bank note or a coin is fungible. A share certificate is (typically) not fungible (because it has a registered owner), nor are the title deeds to a house (because once again the house has a registered owner and one house is not the same as another). However, shares (one security) are "easily converted into another" security. Tradeable, not fungible.

Bank notes are fungible BECAUSE one five pound note is easily and readily substituted by another. Paddington Bear was upset when the bank note he withdrew from his bank did not have the same marmalade stain on it as the bank note he deposited but Paddington Bear, like the authors of this article, did not understand fungibility.

Trade-ability is often improved by and/or fascilitated by fungibility but they are not the same. By definition fungibility is the ability to substitute one example of a good by another example of the SAME good. I am puzzled that an entire article can be written both without citation and without reference to a dictionary!

Paul Beardsell 09:03, 3 April 2006 (UTC)

A note from recent usage in The Atlantic monthly, May 2006, page 104, third para. by Franklin Foer. ..."the United States could simply rearrange its buying patterns—oil is a fungible commodity over anything but the very short term."

Its usage reflects a sense of oil from one source being replaceable with oil stocks from other sources. Flexibility seems to be inferred.

Oxford American {c} 2003, American ed. Oxford Univ. press, has basically a legal definition of goods that may be substituted for by goods with the same definition [when a specific specimen is not not contracted for]. Exchangibility is implied therein in their definition of fungibility as "to serve in place of".

[edit] Disputed tag

It was my intention, having written the above section on what fungibility is, to re-write the article. But I cannot find references to sociological or non-financial or non-economic fungibility and I strongly suspect it to be an invention of the wikipedia editor who contributed the material. Where fungibility is used in a non-economic sense it is used as metaphor. Simply and only. As we have no need (and it would be impossible) to have all metaphorical uses of all English terms detailed - we are smart enough to understand metaphor - I propose to just delete all that material leaving a plain old definition as a stub. What say you? Paul Beardsell 14:17, 3 April 2006 (UTC)

--Read Saidya Hartman's Scenes of Subjection for uses of fungibility in a sociological sense. especially relating to slavery. -- --Aimeezyg 15:00, 9 September 2006 (UTC)

To avoid confusion in future, some references could include:

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott: fungible: Of or relating to assets that are identical in quality and are interchangeable. Commodities, options, and securities are fungible assets. For example, an investor's shares of Xerox left in custody at a brokerage firm are freely mixed with other customers' Xerox shares. Likewise, stock options are freely interchangeable among investors, and wheat stored in a grain elevator is not specifically identified as to its ownership.

Merriam-Webster's Dictionary of Law: fungible: being something (as money or a commodity) one part or quantity of which can be substituted for another of equal value in paying a debt or settling an account (oil, wheat, and lumber are fungible commodities)

--Safalra 14:49, 3 April 2006 (UTC)

That's very helpful. The second definition is a little loosely worded allowing, on a non-careful reading, the interpretation made in the article. I.e. fungible means exchangeable for another commodity. No! I emphasise - and both definitions agree with me - exchangeable for another quantity of the same commodity/security. Paul Beardsell 14:59, 3 April 2006 (UTC)

---

I agree that Paul's raised a point worthy of puzzling out. I agree that the page is troubled, but not as troubled as his critique suggests. The root of the problem would seem to be that fungible is not the same as fungiblity. The addition of ity creates a word that is inherently about the metaphor that fungible suggests.

I disagree: fungible is to fungibility what culpable is to culpability. The first is the adjective and the second is the noun. Nothing more, nothing less. Paul Beardsell 06:01, 10 April 2006 (UTC)

I not willing to agree that the sentence "Larry is culpable." is identical to the the phrase "Larry has culpability." The first is far more absolute than the second which only brings into play a discussion of exactly how culpable. Bhyde 02:16, 11 April 2006 (UTC)

The sentences are not identical literally. But they are identical in meaning or oh-so-similar in meaning that you would be hard pressed to find two English teachers who would agree how they are different. You "absolute" point is arguable: Joe can be a little culpable or his culpability can be absolute. Jane can be absolutely culpable or her culpability can be in degree only. My point stands: Fungibility is to fungible as culpabilty is to culpable and as xxxxity is to xxxx. I was arguing against the notion that there is something fundamentally different in meaning between something being fungible and that something has fungibility. It seems to me that a difference is being vainly sought to support the incorrect notion that fungibility implies tradeability. It does not. More below. Paul Beardsell 07:42, 11 April 2006 (UTC)

I found this useful: http://www.wordreference.com/definition/fungibility is helping me to be confident of my current position.

It looks like the word arose in the legal context. If you borrowed a cup of white sugar and then cleared the debt with a cup of powered sugar the resulting dispute as "are those two commodities fungible." In this sense it is also used to cover a multitude of situations where a debt, contract, etc. is finally cleared. The negotiation/disputes in those situations are about the exchangablity of the item(s) offered up to clear the contract for what was actually mentioned in the contract.

It should be noted that the very common phrase "money is fungible" certainly seems to me to be pushing the adjective's meaning to get at the role that money plays in exchange; rather than it's role as a substitute for another peice of money. Possibly that's a metaphor that's taken on a life of it's own :-).

You beg the question! Money is tradeable by definition. That money is also fungible we agree on. Your argument is that this is because money is tradeable. No! Circular argument! Money is tradeable because it is money! Fungibility does not necessarily imply tradeability and t...ity does not necessarily imply f...ity. Paul Beardsell 07:53, 11 April 2006 (UTC)

Well, no: Only if you think fungibility has something to do with exchanging one thing for a different thing would you have this opinion. That is tradeability not fungibility. Paul Beardsell 06:01, 10 April 2006 (UTC)

I hear you, but for most people there just isn't that much difference between the choice of what items are used to finish clearing a debt and the items that are acceptable in trade. I think people often use the word fungible to describe both a commodity that is easily used to clear a debt and to describe something that's easily tradable. Yes in it's most technical meanings it is used to tease out if a a bushel of winter wheat is an acceptable substitute for a bushel of more generic wheat. American heritage: "Returnable or negotiable in kind or by substitution" is an example of a definition that is getting at the broader meaning.

That many are wrong, sometimes or often, should not surprise us. The choice which you say many are unconcerned about is the choice between a fungible item and a tradeable one in certain circumstances. If you want to make the point in the article that often fungibility and tradeability are concepts which are confused by many I will be happy about that. But I note that the special relativity article does not document the many wrong headed notions about that subject nor does it list what the wrong headed notions are! The point of an encyclopedia is to be a source of reference and to educate. When someone is interested in what fungibility really is comes here then they should get the correct answer. Correctness is not a popularity contest. Your so-called "broader" meaning I say is incorrect. Provide references to support your view or give way. Paul Beardsell 07:42, 11 April 2006 (UTC)

Fungibility is a loser concept. Powered suger may not be fungible with granulated sugar, but it does have fungiblity with granulated sugar. I.e. something has fungiblity is it is likely to be accepted with minimal negotiation and conflict when you offer it up to close out a contract or when you use it in trade. Money has so much fungiblity, i.e. it is very likely to be an acceptible substitute even for a cup of sugar, that it's common to due away with the ity and declare it be fungible.

I disagree again and again. Last issue first: No, that's just a standard way of making a noun out of an adjective - it's just English. If there is the quality xxxxxxx which an object has then it has xxxxxxxity. That many things are readily tradeable for money does NOT make the money fungible. Fungibility is the quality a commodity has when one example of it can be readily exchanged for another example of the SAME commodity. Not a DIFFERENT commodity - that's tradeability. Coins are both fungible and tradeable. That does not mean they are the same. Nor does it mean that one property is a subset of the other. Coins are also round but roundness (the noun derived from round) is neither a looser not tighter concept than tradeabilty. They are DIFFERENT concepts. As are tradeabilty and fungibility. Paul Beardsell 06:01, 10 April 2006 (UTC)

Tradeable v.s. fungiblity is a fine and worthy distinction. Ought to be brought out in the definition. I agree also that they are distinct qualities, though I would argue that they have a swath of overlap. But I think your fighting against common usage to insist that fungible is not oft used to mean easily tradable. When people say a problem with foreign aid is that the funds are fungible they are talking about how the funds will be spent - i.e. traded. When people talk about how the introduction of genetically engineered grains bring into question the definition of what is grains should be treated as fungible they are talking about a quality of the commodity. Bhyde 02:16, 11 April 2006 (UTC)

No! The reason the word fungible applies here is this: A state is given aid to feed the poor. That state also collects taxes and duties. The state also sells bonds. All the money goes into the state coffers. The state then buys munitions. What money did they use to buy the guns? What is the quality of money that prevents us from telling? It would be useful to have a shorthand term for this concept. So useful that a term need not be invented as it already exists: The word is fungible. If we had not given aid perhaps the guns would not have been bought. If we had not given aid perhaps the food would not have been bought. That's a problem with foreign aid: We cannot tell. Fungibility. Not tradeability. Paul Beardsell 07:42, 11 April 2006 (UTC)

Again and again and again and again: That is what the word means: That one quantity of a commodity can be substituted indistinguishably by a like quantity of the SAME substance. Fungibility. Paul Beardsell 07:42, 11 April 2006 (UTC)

All that said another significant revision is called for. Bhyde 12:22, 7 April 2006 (UTC)

Now we agree. Paul Beardsell 06:01, 10 April 2006 (UTC)

Ah, humor. "She forgets she borrowed butter Any pays you back in cream!" Bhyde 02:16, 11 April 2006 (UTC)

I think that a reference to another money-like substance - diamond - might clear up some confusion. Diamonds are generally desirable, and like coin or paper money, will in many cases suffice to clear up debts. Diamonds are thus tradeable. However, whilst I might accept any $2 coin for any other $2 coin (supposing I'm sure it's genuine and not counterfeit), I would not be so likely to accept any diamond as exchange for any other diamond, even if I know it's diamond (and not cubic zirconia), and even if I know the two have the same carat weight and cut, and hence appear to be the same. The second diamond may not have the same clarity or colour, and thus not be worth as much as the first. Similarly, two half-carat diamonds are worth less than a one carat diamond, whereas with fungible substances, two equal weights or measures should be worth a single measure of twice as much. You might accept a half-bushel of wheat today, and another half tomorrow as payment for the bushel you loaned last week; you won't accept two half-carat diamonds for a single carat solitaire. Thus, diamonds, while tradeable and valuable, are not fungible.

In marketing, fungibility refers to substances that are undifferentiated in the consumer's mind. For example, gas from Exxon or from BP are fungible quantities; you will accept five gallons of BP gas for five gallons of Exxon gas. Many advertising dollars are spent each year trying to convince consumers that certain goods are not fungible, the most ludicrous of which are dollars spent convincing consumers that bottled water (e.g. Dasjani) is superior or different than bottled water (e.g. Poland Springs, Aquafina, etc. etc. ad nauseum). Note that this is *NOT* the same as substitution goods - e.g. butter and margarine. When, e.g., the price of butter rises, people will substitute margarine for it, but that does not mean the goods are fungible. If I lend you a pound of butter, and you give me back a pound of margarine, I'm not going to be happy! I think this use of the term fungible, while similar to the economic sense, is distinct enough to warrant its own discussion.

Overall, I wholly agree with Paul; the original article is quite simply wrong and must be revised. KevinBear 20:06, 18 April 2006 (UTC)

I will therefore replace the article with a plain old simple definition, contrast fungibility with tradeability using perhaps the above diamond example (tradeable does not imple fungible), mention that yen are fungible in Cape Town but not tradeable for goods in Cape Town (fungible does not imply tradeable). And add a stub tag. Comment? Paul Beardsell 22:17, 19 April 2006 (UTC)

I have made several edits, to try to clear up the fungibilty versus liquidity thing. nirvana2013 07:52, 1 May 2006 (UTC)