Summations Only

Worth 300 to whom?It was worth 300 to those that sold it for 300. Given what I know about it, and my own moral proclivities, it is worth basically nothing to me.At least, as far as I see how that particular theory of worth goes.

Yi yi yi!Even by the most naive of economic accounting that's not how it works. Most likely neither created value, although arguably the shark has added some by bringing the item to the correct market, what has happened is that an existing asset has been converted into liquid capital. That isn't a creation of value.

The winner is the fastest. The fastest is the winner.Those who survive are the most fit . Those who are most fit survive.Care to reconsider?You're fighting against a definition that is quite literally right out of Economics 101. I understand the point you're trying to make, that some things have value that can't be quantified and that isn't included in any measure of national or global wealth. There is one of your examples does not fall into this category: It is worth what someone is willing to pay for it.Another of your examples is about completely public information: No one would pay anything for the TOE because it is public information. But 200 years ago, how much might Lamarck have been willing to pay for it?I understand you're actually asking a different question, namely what would be the cost to the world if we still hadn't figured out the TOE, but items like the TOE do not turn up on any balance sheets anywhere. There's probably a formal economic term for the intangible value of concepts and discoveries and existing knowledge. That their value is intangible makes these things no less real, but that the value is unquantifiable means they can never appear in any tally of wealth or value. I didn't say it wasn't part of economics. I said that something's value is what someone is willing to pay for it. That is a simple and straightforward definition from Economics 101.--Percy

Until you discover the fraud you believe you have an item worth $300 and that the shop has $300 of your money. Everything seems fair and your net worth hasn't changed.But once you discover the fraud the iPod has to be written off, probably 100%. You've just lost $300 in net worth, and the wealth of the nation has declined by the same amount.There's another aspect to this that I'll address when I respond to Crash's question.--Percy

Hi Crash,We're called consumers because we consume things. That means we use them up, and after they're used up they no longer have value, or perhaps have very little value. We can no longer count their value as part of our net worth, certainly nothing close to their original value. Depreciation incorporates the concept of things being used up.You ate maybe somewhere in the neighborhood of $10,000 worth of food last year. Wherever it is now, it's worth whatever someone is willing to pay for it.--Percy

It seems like splitting hairs, but i think i agree with you.My lesson was two weekends ago on 4/20/12. I attend The Nations Gun Show in Chantilly, VA; hoping to purchase some 40 round magazines from my WASR-10 (semi-auto AK47) and to see if there were any deals on 7.62mm x 39 ammo. WASR-series rifles - WikipediaThe last show I attended I bought one (Bulgarian polymer) and then took it home and it did not fit, so this time I brought the rifle with me into the show so I could manually make sure the 40-round magazines fit the rifle. While I was walking around from booth to booth looking and Guns and accessories, people would stop and ask me how much I was selling my rifle for (no federal checks for private sales in VA), I asked how much they thought it was worth? (I purchased the rifle in 2010 for $399, it is a cheap, machine stamped, Romanian remake that I have fired at least a 1000 rounds through). I received offers for $525, $600, and $625, I then proceeded to the table where the guys I bought this firearm from were located and they were selling the same thing I was carrying for $549 (the most I saw it for at the show was $630). The magazines I found ranged in value from $18-$20 a piece or 2 for $32-$35, I forget how much the price goes down if you buy 5. The interesting thing about the Gun Show is that the prices are not standard. They follow the market, but all prices are usually negotiable. For example my friend who is a wounded veteran (Iraq war), can get super discounts, as can police officers.
As far as determining worth I would guess my WASR-10 is worth around $600 (even though it still seems like a $400 gun to me), and the magazines are worth around $19 (unless you are a cop or in the military). I am not even sure I want to get into the worth of bullets, because if you buy in bulk they are much cheaper.The only thing I am unsure about it do you add in the mileage to get to the gun show, and the $12 entrance fee to the gun show (free if you join the NRA)? My guess would be no because that cost is already paid regardless if you make the purchase or not.

Hi Mr. Jack,The definition of value is not the answer to all questions economic and otherwise. It's a simple definition. I was hoping to resolve a confusion most people had about the sources and mechanisms of wealth creation.The setting of a price point can be a very complex and involved process, but it doesn't change the definition of value. Once you sell your home, the value is the money you received for it.If the buyers turn around and immediately sell the home for an additional $100,000 then that's the new value of the home.--Percy

I'm afraid it is. The definition of wealth creation goes all the way back to Adam Smith.Your thinking and many others in this thread is hung up on an intangible almost non-monetary definition of wealth. When talking about actual real quantifiable wealth in the context of economics, which is the relevant context if we're talking about incomes and tax rates and GDP and so forth like we were in the previous thread, then you guys have got the definition of value and wealth all wrong.--Percy

No, Percy, it ain't.Things that aren't sold are still considered to have value in any vaguely coherent economic model - including Adam Smith's. Wealth creation does not simply happen at the point of sale.In our flea market, the widget sold has value which would be included on any accounting of wealth. Our granny hasStuff 87,412
Our widget 60
Cash 914.12After sale she makes a theoretical loss:Stuff 87,412
Cash 919.12And our shark makes a profit, which is not realised until sale. Any other model is an utter nonsense because it assumes anything that isn't currently being sold has no value. It values my house at zero because no-one is buying it.

I do not see that your answer addresses a single point I made.

But what is the point of that definition when considering things like the worth of publicly funded scientific research in terms of the wealth it creates?Research. Knowledge. Ideas. Innovation. Technological progress.These are the things that increase productivity. These are the things that drive the creation of new wealth in a capitalist (or indeed any other) economy.If your definition of "worth" is unable to cope with the fact that these things have considerable value in terms of increasing wealth simply because they cannot be easily priced then it is your definition of "worth" that is inadequate and which needs to change. Not mine. What am I supposed to reconsider? Am I supposed to deny the fact that innovation drives wealth creation? Deny this because it doesn't meet your criteria of being price-quantifiable?If so - No. But what constitutes "most fit" in an economy? It is very arguably the one that has the best environment to foster wealth creation. The best educated workforce. The healthiest workforce. The best transport infrastructure. The best telecommunications infrastructure. A society that people trust to be just and lawful. A society where people can take entrepreneurial risks that may or may not work out because there is a safety net that means failure won't result in destitution. Etc. etc.Wealth creation is a collective endeavour. To deny this is to misunderstand the complex and often unquantifiable factors involved.

A penny for your thoughts ...

You thought the "iPod" was worth $300, but found out you were wrong. You did not get what you paid for. The "iPod" was actually worthless.The seller committed a fraud - Presenting something having no value as having value.MooseEdited by Minnemooseus, : Blotched the quote code, and didn't bother using "preview". Therefore the value of "preview" was worthless.Edited by Minnemooseus, : Replaced worthless subtitle.

Imagine two people, exactly alike in every way with the exact same amount of wealth to their name, except one has a full belly and the other is hungry.No rational person would say that one is not better off - richer, if ever so slightly - than the other. If it was truly valueless to nourish oneself with food, nobody would pay money for food or, if they did, it would be irrational to consume it - people would stockpile fruits and vegetables as they starved to death. Sure. I converted $10,000 of my money into $10,000 worth of nutrition and calories. (Looking at my waistline, it seems like I got my money's worth.)

You argued that the "paid a million dollars for it painting" was worth a million dollars to the buyer.As I see it, showing his wife that he could be stupid with his money was what he found to be worth the million dollars. Not the painting itself.He could have just as well flushed 1000 x $1000 bills down the toilet. You would then argue that having a clogged sewer is worth a million dollars?The bottom line seems to be that the man has so much money, that a million dollars isn't of significant worth to him.Moose