Economics Questions

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

VA — Wed, 14 Jul 2010 16:49:53 GMT

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

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

baxter — Wed, 14 Jul 2010 16:45:59 GMT

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.

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

The Late Andrew Ryan — Wed, 14 Jul 2010 16:45:00 GMT

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.

EDIT

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

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

E. R. Olovetto — Wed, 14 Jul 2010 16:32:06 GMT

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.

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

VA — Wed, 14 Jul 2010 16:22:03 GMT

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.