The 100 Absolutely Unbreakable Laws of Business Success by Brian Tracy

Author:Brian Tracy
Language: eng
Format: epub, pdf
Publisher: Berrett-Koehler Publishers, Inc.
Published: 2000-03-24T16:00:00+00:00

47. The Law of Exchange

Money is the medium through which people exchange their labor in the production of goods and services for the goods and services of others.

Before there was money, there was barter. In barter, people exchange goods and services directly for goods and services without the medium of money. As civilization grew and barter became too clumsy, people found that they could exchange their goods and services for a medium like coins, which they could then exchange for the goods and services of others, thereby making the whole process more efficient. Today, we go to work and exchange our work for money, which we then use to purchase the results of the work of other people.

The first corollary of the Law of Exchange is

Money is a measure of the value that people place

on goods and services.

It is only what a person will pay that determines the value of something. Goods and services do not have a value separate and apart from what someone is willing to pay for them. All value is therefore subjective and personal. It is based on the thoughts, feelings, attitudes, and opinions of the prospective purchaser at the moment of the buying decision.

The second corollary of this law is

Your labor is viewed as a factor of production or a

cost by others.

We have a tendency to look upon the “sweat of our brow,” or our work, as something special because it is so intensely personal. It comes from us and is an expression of what we are. However, as far as others are concerned, our labor is just a cost. As intelligent consumers, as employers or customers, we want the very most for the very least, no matter whose labor is involved.

For this reason, you cannot place an objective value on your own labor. It is only what other people are willing to pay for your labor in a competitive market that determines what you earn and what you are worth in financial terms.

The third corollary of this law is

The amount of money you earn is the measure of

the value that others place on your contribution.

The way the market for labor works is simple. You will always be paid in direct proportion to three factors: (1) the work you do, (2) how well you do it, and (3) the difficulty of replacing you.

How much you are paid will be in direct proportion to the quantity and quality of your contribution in comparison with the contributions of others, combined with the value that other people place on your contributions.

The fourth corollary of the Law of Exchange is

Money is an effect, not a cause.

Your work or contribution to the value of a product or a service is the cause, and the wage, salary, or payment that you receive is the effect. If you wish to increase the effect, you have to increase the cause.

The fifth corollary of the Law of Exchange is

To increase the amount of money you are getting

out, you must increase the value of the work that

you are putting in.

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