What is it Worth?

How do we determine the value of things? Is it only the question of what people will pay? Some American railroad tycoon of the “Robber Baron” era spoke in terms of exacting “all the traffic will bear” – meaning that he charged not what seemed fair or reasonable, but simply as much as he could get.

Going by that standard, life would appear to be an auction, and the best things go to the highest bidder.

But of course, not only money is involved. Not many people would literally give their right arm for what they most desire. But many parents sacrifice a great deal for the betterment of their children. On a personal note – when meat was still rationed in England, I remember my parents sometimes letting me and my sister eat their portion, as well as our own. And it shames me now to acknowledge that I felt no appreciation, but just took this as the normal course of events.

Still, money is the generally recognized standard of value. One of the great achievements of civilization has been the evolution of money. Isn’t it amazing that, from a simple system of barter, in which you exchanged things of supposedly equal worth, we have evolved through currencies of metal and paper, which merely symbolized values, to the point where transactions are now conducted through almost imaginary electronic channels?

But how do we decide the value of things? One complication is that different people put different values on the same things. A young healthy person may highly value a bicycle, which is useless to someone who’s bedridden. But do usefulness and value mean the same thing? Maybe they should, in which case a screwdriver would in most cases be far more valuable than a diamond ring. Another complexity is that the same item may have varying value in different situations. A warm blanket means more on a chilly winter night than in a hot summer.

Isn’t there anything that has the same value everywhere to everyone? What about the air we breathe? But it’s too hard to package and quantify. If the government could control it, there would soon be a tax on air.

But what about the so-called precious metals, like gold and silver and platinum? Traditionally gold has been a standard of value, even though, except for a few specialized uses such as in dentistry, any sensible person would much rather have a tool-kit than a bar of gold. In any case, if gold were the standard, it would always have the same value. But we know that, like other commodities, it varies from day to day.

I know I am only tiptoeing lightly here, over a very complicated subject. But the fact remains that, whatever name you give it – price, worth, cost, value – what we are talking about is how much something matters to someone, in comparison with something else. And, ever since numbers were invented, I suppose these qualities have been expressed in numerical terms. In the 1950s there was a very popular song which asked, “How much is that doggie in the window?” – but we never found out the answer. Of course, if you are writing a love song, you can get away with sentiments like these (at least, if you are Irving Berlin):

How much do I love you? I’ll tell you no lie –

How deep is the ocean? How high is the sky?

How many times a day do I think of you?

How many roses are sprinkled with dew?

In practical terms, however, we need to have a basic standard of value. Until comparatively recent times, that standard was gold. Hard as it may be to believe, you could take a paper dollar into a bank and change it for a gold dollar. That was called being on the gold standard.

But that doesn’t work anymore. Your paper dollar, which used to be a promise, is now just a piece of paper. Its value is based on whatever faith you have in your government.

Establishing a stable international standard of value may prove to be as difficult as it has been with weights and measures. Considering the success which the pharmaceutical industry has had in turning little tablets and capsules into huge profits, I would suggest that the currency of the future be based on PILLS. With proper accreditation and validation, a certified pill could be the remedy for all our financial ills.