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Does money “measure” the price or value of a thing

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VA Posted: Wed, Jul 14 2010 10:22 AM

Am I stating this correctly?

 

     Temperature is measured primarily by a thermometer. The thermometer expresses the temperature in Fahrenheit, Celsius, Kelvin, etc. This means that temperature is objectively measurable. (Simply, that if ten thermometers were placed inside a bucket of 50°F water all ten thermometers would read 50°F)

     So then, is the value or price of an object measured by money? Imagine ten people standing in the shape of a circle around a diamond ring. What is the price or value of the diamond ring? Each of the ten individuals values the ring subjectively. They do not have recourse to a “value-o-meter”. The answer to the question is no. Money does not “measure” prices or values; it is the common denominator for their expression. In short, prices are expressed in money; they are not measured by it.

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It seems fine to me, but I don't know much economics. I forget where (I think it was Rothbard) lists 4 necessary attributes of money. If someone could link that I would appreciate it.

Democracy means the opportunity to be everyone's slave.—Karl Kraus.

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Yes. Value cannot be compared. Even if two individuals had acess to the same information as to market conditions (They know exactly what price everything on the market goes for) they will still have different value judgements as to their money because they will value buying different things. Even if they both valued buying the exact same things they will (almost certianly) value them in a significantly different way.

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By the way does your name mean something? Or was it just random?

"Lo! I am weary of my wisdom, like the bee that hath gathered too much honey; I need hands outstretched to take it." -Thus Spake Zarathustra
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baxter replied on Wed, Jul 14 2010 10:45 AM

The price - the objective exchange value - is a market-clearing ratio that buyers and sellers (or supply and demand) settle at.

But price does not measure subjective value. The price for the bucket of water might be $10, but if I am dying of thirst then I may value it much more than $10.

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VA replied on Wed, Jul 14 2010 10:49 AM

Its the initials of my name but I guess it could stand for voluntary action smiley

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