What the #%&X* Does Fungible Mean?

From your personal thesaurus you will find that the word is an adjective and the primary entry is “interchangeable”. Other equivalents include “identical” and “transposable”.

From the standpoint of products “aluminum foil” for “tin foil” is an example. Early wrapping foil was made from tin but was quickly replaced by a superior product made from aluminum. Curiously consumers still persist in referring to the product as tin foil.

Margarine as a substitute for butter started in the 1880s. As a replacement for animal fat, the product began a tortuous one hundred year road to full consumer acceptance. Dairymen were not pleased and played every card possible to slow the increasing use of margarine. Tactics of this nature are common when it comes to fungibility.

Zippers for buttons, velcro for zippers, plastics for glass, steam for sail are but a few of many transitions from one product to another with similar applications.

Substitution often comes with spectacular changes. An earlier blog, “Follow the Commodities and the Money“, referred to the limited substitutes for salt. A major oversight was refrigeration as a replacement for the preserving capacity of salt. Mechanical refrigeration has had a huge impact including air conditioning.

Now comes another example of a substitute for salt. Salt lowers the melting temperature of ice. This deicing process causes serious consequences including corrosion and contamination. Solar panels built into the road surface in a specialized configuration will ameliorate both problems Salt producers are looking at yet another erosion of their market because of product and process interchangability.

Businesses and products are under constant threats of inter-convertibility, compatibility and equivalency. Many come from unexpected sources. Sometimes being alert is not enough. For proof, observe the current travails of Eastman Kodak.