Summations Only

If you are going to define the worth of something as how much it costs then (by definition) things are worth what you pay for them. But that's just circular and silly. But by your definition it is perfectly possible for things which raise living standards and create wealth to have no worth. How much (to use a very EvC example) is the theory of evolution worth? What is the worth of a vaccination? How much is the discovery of the Higgs Boson worth?Innovation is the aim of a capitalist economy. It's what creates wealth and drives things forwards. The economic "worth" of an idea or an activity is how much wealth it generates in terms of improved living standards etc.Yes - It's almost impossible to quantify. But that doesn't mean it isn't there or that it can be ignored. But the sort of "worth" I am talking about indisputably does have a huge economic effect. Human activities that result in increased wealth. Innovation. Entrepreneurism. These things are what drive capitalism. They are the stated aim of economic policies.So how can they not be part of economics? My gran would have said something like "This boy knows the price of everything and the value of nothing".Do you think "price", "value" and "worth" are all the same thing?Edited by Straggler, : No reason given.

And that is completely disconnected from the real-world value people place on things.S'pose that explains why it's so popular in pop-culture economics.Edited by Jon, : No reason given.

This is understandable. Percy appears to have something of a faulty impression of what economics is, which he equates to bookkeeping (which it isn't, since we call that 'bookkeeping' not 'economics'). This is understandable, as I said, because that is how economics is so often portrayed in the capitalistic west: the 'science' of how rich people move money back and forth.But this misses the fact that economics is not a study of money changing hands but rather a study of human behavior (economics is a social science, after allfor what it's worth, bookkeeping is part of accounting, which is a business-related field). Broadly speaking, economics is simply a study of how people satisfy their wants and needs.That said, what you have noted is completely correct: Percy's understanding of 'worth' cannot be a valid economic concept because it is not universally applicable while worth itself does exist universally. We need a conception of 'worth' that isn't based on dollars and cents. We need a conception that can be applied as much to the billionaire in the office as to the subsistence farmer in the jungle. And a definition of 'worth' as 'willingness to pay' simply doesn't get us that.Jon

Absolutely: they don't have any Economic worth, even though they might have "worth" to the economy.But we all know Economics is bullshit anyways.

The system isn't closed. Value can be both created and destroyed.Here's an example of creating value. You buy a house for $200,000. You paid $200,000, and in return you received a house worth $200,000. If your net worth before was $200,000 before then it is still $200,000. You continue living in the house for five years while making various improvements costing you $40,000, after which you sell it for $300,000. You just created additional value of $60,000, and your new net worth is $260,000.Here's an example of destroying value. You buy a Big Mac at McDonalds for $3. You paid $3, and in return you received food worth $3. If your net worth before was $200,000 then it is still $200,000.Now you eat the Big Mac. You just destroyed $3 in value. Your net worth is now $199,997.--Percy

So you go to a shop and see an ipod for 300. You know the same model can be bought from a shop 5-10 miles away for 200. What do you do?Go to the shop 5-10 miles away.Conclusion: It is well worth 100 to travel 5-10 miles to a different shop.

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So you go to a car dealer and see a Ford for 25,000. You do a search and find the same model in a show room across town for 24,900. Do you go to the other dealership?No.Conclusion: It is not worth 100 to travel 5-10 miles.

Here's what I don't get:So you go to a shop and see an ipod for 300.Turns out it was fake and doesn't do anything and it ain't worth shit.Was it really worth 300 because you got tricked into paying that for it?

As far as I can tell, it was worth 300 to the fraudster. How much an authentic looking fake is worth to you really depends on your ethics.

But you gained $3 in nutrition and calories. Net worth: $200,000.It's the food you can't eat that lacks value. You spend $3 on a Big Mac that turns out to be spoiled. Net worth: $199,997.Or maybe, as you say, it's the reverse. Frankly, "value" is the least convincing aspect of economics. Better to talk about price. Money, despite being fake, is real. "Value" is just a simulacrum of price.

That's not true. That's just the pop-culture economics you're thinking of. The kind of stuff in the news all the time.Real economics is an honest and sincere study of human behavior.

Im with Percy on this one. What one is willing to pay is the worth.Just watch the Antique Roadshow for examples of how someone could have a Tiffany vase valued at 50,000.00. The vase is not worth shit unless someone actually buys it for that price.

How can the amount people actually pay for things in the real world be disconnected from the "real-world value people place on things"? Except that it's not "pop-culture economics." It's just simple and straightforward Economics 101. It's basic stuff, foundational even. Here's a quote from the Wikipedia article on Value: --Percy

So as long as people keep passing the buck by tricking people, a fake useless iPod would actually be worth 300?

Show me this real economics. Shouldn't that be called Economology then?

This answer is correct, but incomplete and overly narrow. It is applicable in many, but certainly not all, economic contexts and more generally, it's an increasingly poor measure.Let us consider the economic question first:Suppose I wish to sell my house - as I did recently - and I need to decide how much to sell it for, or whether to accept an offer I've received on it. For this purpose, your definition is clearly the best. I literally cannot sell my house for more than someone is willing to pay for it. The only questions are determining how much that would be (when setting a price) and whether they or someone else will give a better offer (when deciding whether to accept an offer). For this kind of simply transaction its a perfectly good measure of worth.Consider, however, a new question: how much should I buy a house I wish to rent out for? Now, how much that house is worth is a much more complex issue. What it is worth as an asset is more important than the transaction price. This depends not only on the cost, but on the cost of any loans, and any upkeep as well as the projected income. Still, we're sitting firmly in the realm of economics, but the simple answer "what someone is willing to pay" no longer suffices.Move beyond these narrow questions of economic simplicity and you rapidly discover that the monetary question is inadequate. The worth of the house is much than its monetary value because it's a place to live, a place where you gather friends, have memories, form communities, shape to your tastes and so on.The phrase "knows the cost of everything, and the value of nothing" springs to mind. Economic worth is such a narrow subset of what something is worth that is essentially useless in answering the question "How much is something worth?" in the general sense.That this is so is effectively admitted by your quote "Economists generally assume that individuals ... are the best judges of what they want". This is known to be false. Individuals are terrible at making decisions; people don't make rational judgement.