Does the value of a thing determine its price? Valuable things do often carry a high price. Does the price of a thing determine the value? Expensive things are often quite valuable. Are the value and price essentially the same thing? Does the bear shit in the woods? If the dog hadn’t stopped to piss he would have caught the rabbit.
“Value” is one of those concept words that essentially doesn’t exist, little more useful than the popular socialite terms “marvelous” and “fabulous”. Everything has some value, so everything is valuable. In the same way that some aspect of everything could surely be declared as “fabulous”. . . .”It was terrible that the orphanage burnt down, but it made a fabulous plume of smoke” . Take this loose term “value” and apply it to anything and it seems as though its somewhat better than it was.
Alright fine, everything has value. But some things must surely have more or less value than other things right? Is there a scale to be applied? Do we do a survey? I would surely value a diamond over a loaf of bread, but if I was starving. . . . ..
So what about price? People more on the right of the political spectrum love to take price and apply it as the scale determining value. That’s what the free market system is all about. Its justified that a company can sell gas at outrageous prices because that’s what the public is willing to pay. We may complain that “prices are outrageous!”, but if we’re paying that price, then we’ve put our seal of approval on it stating that its completely justified. If we didn’t like it, we wouldn’t pay.
Compare your local food bank and your local professional sports stadium. Which is pulling in more cash? I recently had a short debate with a republican fellow blogger i sometimes frequent. He felt that it was perfectly justified for society to allocate billions of dollars towards professional athletes for their services because that is what the public is willing to pay. Athletic entertainment earns a high price, curing hunger earns a much lower price. A free market will determine the natural value of things elicited through price.
The problem with this defense of the free market system is that it doesn’t account for manipulation through power. A slave would work long days for food, is that also justified because the slave has accepted the going rate? Those with excessive power to control prices are able to set values that are completely unfair. The slave may not like his wage, but if there is no escape, the slave wage becomes more valuable than the alternative, starvation. Others who are starving may even compete to be the well fed slave.
He who controls price, controls value. Whether its the only guy in town selling axes, or the only guy in town willing to buy axes; the value of an axe in town is set by the side of the trade equation who is least desperate. Now have a quick look at our world, who is least desperate? Owner or employee? Walmart or customer? Rich or poor? Don’t be mistaken. The people on yachts determine value.
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