Why do we keep measuring the value of things with something that constantly loses value over time?
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Because this way you'll never know if it's just inflation or an ever growing markup.
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Yea nothing is constant I know. Asking more like why don't we measure the value of things with someone that holds its value better like gold? It's physically scarce and cannot be manipulated because it's verifiable at an atomic level, and will always be in demand.
Gold can be manipulated. Reserves can be made available or unavailable by the wealthy. You can also have supply shocks if new reserves are discovered.
Also, most banking problems stem from issues with the reserve ratio affecting the money supply. That doesn't go away with a gold backed currency.
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Gold can be manipulated. Reserves can be made available or unavailable by the wealthy. You can also have supply shocks if new reserves are discovered.
Also, most banking problems stem from issues with the reserve ratio affecting the money supply. That doesn't go away with a gold backed currency.
I'm not saying we adopt gold as a currency, I'm thinking we should try using it more often to measure the value of things. I'm considering working on a web application that allows users to easily determine the price of something in gold by weight. It's a fun thing to think about. Even with supply shocks from a new reserve, that is absolutely nothing compared to the inflation of the money supply.
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I'm not saying we adopt gold as a currency, I'm thinking we should try using it more often to measure the value of things. I'm considering working on a web application that allows users to easily determine the price of something in gold by weight. It's a fun thing to think about. Even with supply shocks from a new reserve, that is absolutely nothing compared to the inflation of the money supply.
It would only really be a thing after the depegging of the dollar after 1970.
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I'm not saying we should have a gold standard again, there were obviously bad downsides. I'm questioning why we measure everything in money which loses its value over time due to inflation. Can't we measure things in something that has a more stable value while also not having a gold standard?
But what’s the point in having an extra conversion? Like this would take extra effort and need to regularly be updated as the price of gold vs the local currency changes so there would have to be some advantage. Like having the price change over time is annoying but because your income and expenses are both tied to the same thing ideally it shouldn’t cause any thinking (it hasn’t because income hasn’t kept up with inflation)
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There's no such thing as an objective measurement.
Every single measurement we have is relative to something else.
Also having a measurement to something we use every day is a good thing. Like that's the price of the object. You can look at the price of the things 50 years ago. People aren't writing down random calculations to measurements in different arbitrary units just to record that pointless data point for someone in the future to use.
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It feels like you're asking what value is. Value is a sentiment that depends on many factors but it eventually decomposes to some utility factor. You could argue that water is not valuable because it is abundant but that depends on context. In the desert it becomes extremely valuable for people to live. It's difficult to make a numerical assessment of value and measurement implies a level of precision and universality that is inappropriate. We estimate value based on contextual factors such as supply and demand. It's not a great way to assess it but better than nothing.
I'm always pleased when I buy stone construction materials because they deliver 1000kg of material and it only costs £20. I don't know of any other material that is seemingly so abundant, inexpensive and useful. I'm not convinced I would feel the same way about a tonne of gold, aside from the scarcity. Maybe I would make a gold toilet and get x amount of fame on social media, that's apparently extremely valuable.
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It feels like you're asking what value is. Value is a sentiment that depends on many factors but it eventually decomposes to some utility factor. You could argue that water is not valuable because it is abundant but that depends on context. In the desert it becomes extremely valuable for people to live. It's difficult to make a numerical assessment of value and measurement implies a level of precision and universality that is inappropriate. We estimate value based on contextual factors such as supply and demand. It's not a great way to assess it but better than nothing.
I'm always pleased when I buy stone construction materials because they deliver 1000kg of material and it only costs £20. I don't know of any other material that is seemingly so abundant, inexpensive and useful. I'm not convinced I would feel the same way about a tonne of gold, aside from the scarcity. Maybe I would make a gold toilet and get x amount of fame on social media, that's apparently extremely valuable.
Good perspective. I like the concept of marginal utility and scarcity.
I need to hammer a nail, I get one hammer, I hammer the nail successfully. The hammer was very valuable to me.
I get another hammer, it's not nearly as valuable as the first hammer unless my first hammer breaks.
I give the hammer to someone else who needs to hammer a nail, they hammer the nail successfully. The hammer was very valuable to them.
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Because things too, on average, lose value over time when materials degrade and better models come out. Inflation saves the trouble of reducing the old price.
I just wish the new models were better than the old ones.
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Good perspective. I like the concept of marginal utility and scarcity.
I need to hammer a nail, I get one hammer, I hammer the nail successfully. The hammer was very valuable to me.
I get another hammer, it's not nearly as valuable as the first hammer unless my first hammer breaks.
I give the hammer to someone else who needs to hammer a nail, they hammer the nail successfully. The hammer was very valuable to them.
I didn't know it had a name but marginal utility sounds like the concept behind the early form of eBay, before it became a corporation. You can still find people giving stuff away on there but that sort of exchange has now moved to places like Freegle, Freecycle and Facebook Marketplace, to a lesser extent. What people value has always been a mystery to me, I would be horrible in business. Most of my decisions are pretty much utilitarian, aside from food and drugs. I am happy in a junk yard, salvaging materials and components, that stuff feels under utilised and valuable to me.
