Topic: Should money have intrisic value ? (Read 10609 times)

Oh, please, you can't get rid of the observer here, otherwise it doesn't make any sense.  The concept of value doesn't mean anything if there is not at least one human being involved.  Same for colors, sounds, and so on.  If you want to think things like this then it's a bit like the old lame debate about a tree falling in a forest where there's noone to hear it.   I doubt anybody has ever tried to suggest a notion of value as intrinsic as the atoms the ice-cream is made of.  I'm pretty sure people mean intrinsic value as opposed to trade value.

If you deny the existence of at least one observer, then the world itself doesn't exist.

Value is very much like morality.

Some people think both are intrinsic, and others believe they are subjective.

Just as caveden was saying that there is no intrinsic value, one could argue there is no objective morality.

However if one were to say: "Raping is evil" I would say this is a widely accepted morality amongst human beings which would be incredibly tempting for us to make the claim that "Raping IS evil" rather than "I THINK/BELIEVE raping is evil". Technically it is still subjective, but most humans suscribe to this.

Similarly to gold, at the moment and for the longest period of human history, gold has been perceived as a store of value and suitable means of exchange, everybody wants gold. It doesn't have INTRINSIC value, however since it is widely used and accepted by everybody, it might as well be, NOT SAYING THAT IT IS! A BitCoin appears to be a good means of exchange so far, but the majority of people haven't adopted that yet. Maybe in the future when everybody seeks BitCoins rather than gold opinions will change, I feel gold has had too much of a headstart, and so will always retain its value unless something revolutionary happens, such as alchemy or finding a planet made entirely of gold.

Intrinsic things are the utilities, what it can be used for. And this is on par with the claim that "a brain is intrinsic to a live human being". Every human being has one, but the value we have for it... well... I could say it differs from person to person.

But if the value exists for you, it can't be intrinsic to the ice cream. The value is in you, in your opinions, in your mind. If you're gone, such value is gone, although all properties really inherent to the ice cream remain.


"Should money have utility other than trade utility ?"

There, better.
And I bet that if people were used to these terms, they wouldn't spend much time thinking to answer "No, something doesn't need to be useful for A in order to be useful for B, being A and B completely unrelated"
But even libertarians quite often don't understand that, and I bet that the fact that so many people constantly throw phrases like "Real money must have intrinsic value!" (sic) is related to the problem.

Okay, I can debate by these rules.

Yes, There is an established economic meaning of "intrinsic"; infinity!

Nah, nah, nah!

Appeal to Authority.

Yes it can.  I can enjoy a tasty ice-cream.  It has some value for me.  This value is due to chemical and nutritic properties of the ice-cream, which are intrinsic to the ice-cream.   It's a subjective intrinsic value.

Now I can desire cigarettes.  Not because I could smoke them .  I don't smoke.  But I can desire to own some, because I know that a lot people smoke and would do many things for cigarettes in dark times.  It's extrinsic value.

But if I was to reformulate my initial question in order to avoid this debate, I would ask :

"Should money have value other than trade value ?"

Why doesn't he just title his article "the fallacy of objective value" ??

Yes, that's what I mean. And there are a lot of people who still believe in that.
If we here, that do understand the difference, keep using terms that only have meaning when this false theory is true (intrinsic value) we'd be just fueling even more this misunderstanding.

That's somehow what Gary North says in his text: http://www.thefreemanonline.org/featured/the-fallacy-of-quotintrinsic-valuequot/

There not two different definitions (economic vs common). I've posted before the dictionary entry. An intrinsic attribute of something is inseparable from the thing itself. Value just can't be intrinsic. Ever.

Currency doesn not need to have an alternative use to be useful or valuable.

Conclusion remains the same, money does not need to have alternative uses to be useful or valuable. If it properly fulfills the requirements of sound money it will be valuable.

Now this is a semantic argument.  You are simply debating the common definition of the term "intrinsic" versus it's economic definition.  I for one, do not misunderstand that even an intrinsic value is a result of how various humans desire the object.

Both silver & gold have significant industrial uses, as well as potential uses that are cost prohibitive due to the high monetary value.  Off the top of my head, in the absence of a functioning market for silver or gold (unlikely, even in a war zone, Nazi sub captains carried a bar of gold for this reason) then gold makes a better bullet than lead and silver has antibiotic properties that are significant enough to be critical in dire situations without proper modern medical facilities. 

Well, I'm pretty sure that if you remove nicotine from tabacco, people would enjoy it much less.

I don't see what misunderstandings you are talking about.  Some people believe in objective theory of value, if that's what you mean.  But almost no one here does, I think.  It's a completely different matter.

The point is, even in a subjective theory of value, the question of the intrinsic value of money has some pertinence, because it is not the same if you chose to use a commodity (such as wheat for instance) as a currency,  or if you use a completely abstract, otherwise worthless, unit of account such as bitcoin.  This problem has interesting issues per se.

The value of tobacco is not an intrinsic property of it. The intrinsic properties it has that make it useful for smokers are not its value, nor determine it. Previous belief that value was an attribute of stuff led to serious economic misunderstandings - and it does until today. That's why I'm being pedantic and asking you people not to spread this mistake. "Come on", it's not that difficult

Come on...  Tabacco has intrinsic value.  Because many people like smoking.

If you are one of these person, then for you tabacco has value because there is an INtrinsic property INSIDE tabacco (actually probably nicotine) that you like.  Such a value doesn't rely on anything EXterior to the tabacco leaf.

Now you consider a $100 bank note.  It has some value, due to the fact that many people will do some stuffs to have some.  Those people are OUTSIDE of the bank note.  Thus this value is EXtrinsic.

So to sum up, whether a money should have or not intrinsic value depends on whether or not you might desire it for itself, if you were alone on a desert island, for instance.

The fact that value is subjective has nothing to do with this.  It's *orthogonal*.

If I post something here and nobody reads it... did it have value?

If you've agreed that anything has intrinsic value then you've agreed on a fallacy.
Just understand the terms you're using, they have a meaning.
If value is on the beholder only - and it is - it can't be an inseparable attribute of valued things.

Damned it I thought we agreed on that.  Intrinsic/Extrinsic has nothing to do with subjective/objective.

No, you're contradicting yourself. Just read again what I said.
Something cannot be a subjective opinion of the beholder and an intrinsic feature all at the same time.
And utility is not value.