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Pat Cusack's avatar

Not many people understand that no thing HAS a monetary 'value'. Every thing HAS 'properties', which may be grouped under special names, like geometric, chemical, physical, etc.

But 'value' is never inherent in a thing (not even a piece of gold); only a person can PUT a value ON a thing, and various people can (and do) put different 'values' on the same thing. Even one solitary person can change their opinion about their 'value' for a single thing over time, though the thing retains all it original 'properties', unchanged.

So 'value' of any thing is only ever, and always, inside a person's head. It's a 'personal opinion' about the relative importance of that thing to the observer; it's entirely dependent on the whims of the person holding that opinion.

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Economics21st's avatar

In case you're waiting for the answer to the question, 'how do people know how many pounds to offer (or insist on) in exchange for other things?', I decided that this was getting too deep for now, so I'll be addressing it later. But if you can't wait, I can recommend Per Bylund's description in his book 'How to Think About the Economy':

https://mises.org/library/how-think-about-economy-primer

(By the way, I wouldn't call myself an Austrian economist. I think they are excessively concerned about banks creating money. But I do like the Austrian school's emphasis on there being no free lunches).

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