The Big Picture…
Our economies are based on the exchange of service. That is to say, in exchange for you benefiting from my service, I benefit from your service.
However, we rarely see such a direct exchange happening nowadays. This is because indirect exchange masks this fundamental basis of exchange. Think of this as you giving me a service credit each time I provide my service to you. I can benefit from your service in the future by using those credits. Now imagine that I can instead use those service credits to benefit from someone else’s service. This is the indirect exchange. And quite often we would consider those service credits to be money.
This foundational premise, to me at least, helps us understand why the fundamental exchange of economy is service, yet we think of it more in terms of value and cash.
Foundational premise 2 of service-dominant logic is as follows:
Indirect exchange masks the fundamental basis of exchangeVargo & Lush (2016) – Foundational Premise #2
We naturally have the question: how can service be the basis of exchange ( (FP1) if, when we make a casual observation, we usually are exchanging cash?
A Direct Exchange
This is what FP1 refers to.
A Deferred/Unequal Exchange
We don’t always need to exchange service at the same time. I might perform my service for you in Spring. And your service might be provided in Autumn. There’s no issue here, we are still exchanging service. We might want a way to record that our service has been given. Let’s call that a service credit.
It is also conceivable that I might perform my service for you in
But also not all services are equal. My service
An Indirect Exchange