Thursday, September 8, 2011

Economic Value

Economic value has always fascinated me. First, let’s define the term. According to is “the amount (of money or goods or services) that is considered to be a fair equivalent for something else.” Being about as pure of a capitalist as one can be (minus a few things such as private military or the selling of organs and probably other things I haven’t thought about), I’m looking at this term from a pure individualistic standpoint.

What has got me thinking about this again was a discussion I had with a friend. They were telling me how their family recently purchased some art and had me guess how much they spent. I guessed $200, thinking that was an extravagant amount of money to spend on art. In reality they’d spent about 3 times that much. Which I, of course, thought this was crazy (my friend actually suggested I write about this in a blog, so they know this is going to be discussed). So then I got to thinking, what would be worse for me than buying some random art from a local art fair for that amount of money? First thing I came up with was the opportunity to follow my neighbor’s dog around with a poop-scooper. I’d rather spend my goods, services, and money on art than that.

What other things though amaze me that people give a large economic value to? Name brand clothes is one thing that jumps to mind. People are willing to give a lot of money for a shirt if it has a specific logo on it. Concerts are another one. People will spend a ton of money to go listen for a few hours to some person sing (or lip-sync in the cases of a lot of ‘em) and after they are done, what do they got to show for it? A couple pictures on Facebook. Finally, Coldstone Creamery. That’s right, I’m calling them out. The amount of economic value that they place on their ice cream is similar to the economic value I would place on a large gold nugget. Too bad for them I don’t place the same economic value on their ice cream as I place a couple bent quarters, let alone a gold nugget.

I can’t leave though without admitting that I place economic value on some items that most of the world doesn’t. In particular, I’ve been willing to spend $88.50 for a board game before.  Then there was $12 Japanese popper fishing bait that I bought in Wisconsin, because we were hard up for top water baits thanks to the Muskies taking them all. Then of course there is the immediate agreement to go eat at Yats should anyone ask.
This brings me to my final point. Economic value is a very personal point of view. My friend’s art purchase makes no sense to me, but you slap that art onto the side of a boat and maybe you got me thinking about upping its economic value. Economic value not only depends greatly on who the person is, but what that situation that person finds themselves in. Let’s take the Cold Stone example I gave above. I recently (about 3 months ago, which is recent for a Cold Stone visit by me) took my wife there when her parents were in town. Why?! Because the goods and services I traded (extravagant amount of money even with a half off coupon for ice cream) was worth in my situation the goods and services I received (making my mother-in-law and wife happy and keeping peace in the world).

Maybe my next blog will be about economic value from a theological standpoint. Now that ought to be something.


  1. I am surprised you did not talk about how much you love spending money on flowers. :) Love you.

  2. And that $88.50 board game you will get a lot out of! That's my rational with my wife. I can buy a game the kids and I will play for years to come for the same price she gets her nails done! That's economic value!

  3. Well, Adam you are lucky. I just spent 1.5 hours typing and re-typing my comment (to get it just right) and then my computer died because I didn't have it plugged in.

    You really struck a nerve with this post so I had quite a lengthy comment and I was trying to word it just right. I won't rewrite everything here. But I will just make a few comments.

    It is always easier to spend someone else's money.

    Beauty is in the eye of the beholder.

    The value of something always depends on what someone is willing to pay for it. It just depends on the SOMETHING and the SOMEONE.

    Music and art are very hard to define monetarily. Especially in the small business realm. But let me just say, if you hope to have a small business enterprise someday - you need to start supporting small businesses. There are a lot of people who will think you foolish for your dream and walk right past your table of opportunity. Be kind to others if you want them to be kind to you.

    Your Grandpa D was very artistic and made good money at it. Don't knock it. I'm not talking lawns.

    I am going to an art fair this weekend.

  4. Yes, economic value is "beauty in the eye of the beholder" of the business world.