4 ms·

Can you precisely define intrinsic value? And give other specific examples of things that have this property? Examples that barely meet and barely fail to meet

Can you precisely define intrinsic value? And give other specific examples of things that have this property? Examples that barely meet and barely fail to meet the criteria would be especially helpful.

bumby 6y ago
https://en.m.wikipedia.org/wiki/Intrinsic_value_(numismatics) https://en.m.wikipedia.org/wiki/Intrinsic_value_(numismatics...
- dwaltrip 6y ago
  Yes, of course, certain metal objects can be melted down and then sold as raw material [1]. But even if we withhold further scrutiny of this one example, it doesn't explain the broader concept of intrinsic value. How do we robustly generalize beyond this class of metal objects?
  - bumby 6y ago
    I think the classic definition is from the non-derivative value. Fiat currency has value derived from the faith in the government printing it. Gold has a derivative value in the faith that it will be accepted as a default currency, but also an intrinsic component borne of the relative scarcity as well as material properties having some use. I may not understand what you’re specifically asking. Intrinsic value is fairly straightforward. A company may have some amount of material worth (machines, intellectual property etc.). The balance of that equity minus their debt is the intrinsic value. After selling all that property and paying off the debt whatever left is the intrinsic value. Similarly, melting down a metal and selling it as a commodity gives the intrinsic value of a currency. A borderline intrinsic value would be a currency that has very little commodity value when divorced from its derivative value (e.g., the paper stock has only a limited marginal value and essential no intrinsic value). Some commodities get most of their worth from intrinsic value (milk, pork-bellies get value from the fact the are food) where fiat currencies has disproportionate derivative value.

bumby 6y ago

https://en.m.wikipedia.org/wiki/Intrinsic_value_(numismatics) https://en.m.wikipedia.org/wiki/Intrinsic_value_(numismatics...

dwaltrip 6y ago
Yes, of course, certain metal objects can be melted down and then sold as raw material [1]. But even if we withhold further scrutiny of this one example, it doesn't explain the broader concept of intrinsic value. How do we robustly generalize beyond this class of metal objects?
- bumby 6y ago
  I think the classic definition is from the non-derivative value. Fiat currency has value derived from the faith in the government printing it. Gold has a derivative value in the faith that it will be accepted as a default currency, but also an intrinsic component borne of the relative scarcity as well as material properties having some use. I may not understand what you’re specifically asking. Intrinsic value is fairly straightforward. A company may have some amount of material worth (machines, intellectual property etc.). The balance of that equity minus their debt is the intrinsic value. After selling all that property and paying off the debt whatever left is the intrinsic value. Similarly, melting down a metal and selling it as a commodity gives the intrinsic value of a currency. A borderline intrinsic value would be a currency that has very little commodity value when divorced from its derivative value (e.g., the paper stock has only a limited marginal value and essential no intrinsic value). Some commodities get most of their worth from intrinsic value (milk, pork-bellies get value from the fact the are food) where fiat currencies has disproportionate derivative value.