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Value System
Friday, November 16th, 2007 by admiral While doing my daily stand up philosophy, I came across something odd and completely pointless. What else is new? I was considering economics. There will be a great deal of that going on around this state in the coming months. Nobody questions where the money went when asking where to appropriate more.
I came across the concept of ventured capital. You see, we put a dollar value on wealth that is invested in property. That property only represents part of the value that we place on it. A great deal of the wealth invested in places like the stock exchange only really exists on paper. This does not stop us from counting this apparent wealth as though it really existed.
Then, we add all the real, liquid, capital that is able to pay for the ventured capital. I am probably using the wrong words for this all. What I am trying to get to is that we count both the price and the product as though they were separate items when they are not. Money is what it can buy. Counting what money can buy and then counting the money that buys it is double dipping value.
Earlier tirades mention that the value of the dollar is what you can get somebody else to trade for it. Somebody has to want your dollars as much as you want his product or there will be no exchange. Unless a force is applied to deform the system, a free transaction results in both parties getting what he wants. Otherwise there would be no exchange. The imbalance that allows money to move in an economy generates the value of that money.
When there is nothing to trade for, the dollar has no monetary value. This is also true in a system in which nobody wants your dollars. Who is going to trade for something that he does not want? So, are we not overvaluing money when we add dollars to the value of real property? It is a thought that fills this space for a few days.
