The Orthodox approach is perhaps the most widely taught and recognized theory amongst introductory economics students and the general public alike for its feasibility and simplicity. In this framework, the story generally begins with the tale of Robinson Crusoe or some other rudimentary story of two individuals meeting for the first time; each interested in the others’ possessions. Imagery of the Pilgrims of Plymouth Colony exchanging goods and services with the Wampanoag tribe of Cape Cod is a typical example of such a scenario (Plymouth Colony, 2013). In this case, both parties demonstrate the economic principle of double coincidence of wants, or the fact that in order for either party to take possession of the goods or services offered by the other, each must want what the other has. To better explain the Pilgrim example, if a Pilgrim wants good “A” from a Native American, the Native American must also want good “B” from a Pilgrim in order for the exchange to occur. If neither party wanted nor had what the other is willing to trade, the exchange fails to occur. This calamity is called the double coincidence of wants , or the rare instance that both parties are wanting and willing to trade for the others’ goods or services. In order to negate the double coincidence of wants, the creation of money was the most effective means within the Orthodox school. Before going into detail about actual money in the Orthodox approach, it is appropriate to understand a little more about the reasoning behind adopting a monetary system.

The barter system proves effective only when dealing with the most basic and simple civilizations as the one described in the previous paragraphs, however this type of system fails quickly as the complexity of society increases. One major flaw with the barter system, and perhaps the most important reasons societies graduate to a monetary system is the linked problems of the double coincidence of wants and its logistics. To expand on this idea a little further and frame the argument for money’s maturation in the Orthodox school, it is important to look at an example from Adam Smith. “The butcher seldom carries his beef to the baker or brewer; in order to exchange it for bread or beer (Smith, First Published 1776).” In Smith’s example, one can visualize the double coincidence of wants and the logistical dilemma at work. First, double coincidence of wants raises the predicament that maybe the baker and the brewer have no desire for beef, and in this case, the butcher has no way to acquire bread and beer for a complete dinner. This is to say the butcher is dependent on the other tradesmen’s’ desire for beef. Secondly, is the butcher really going to carry his commodity all over his village in a rare attempt to accomplish the double coincidence of wants? To avoid this mishap, individuals take their commodity to market where they can exchange their goods for money and then with that money purchase the goods and services they desire (Smith, First Published 1776). An example would be a society that converts grains, livestock, and tobacco into gold coins through a market sale, and then proceeds to buy the desired commodities with those same coins. The coins are much more desirable for all market participants because they can be used to buy the goods and services due to the universal acceptance of market participants. Furthermore, the coins are much more efficient than herding a flock of sheep around town! This series of transactions is linear and the diagram below helps to visualize this transgression.