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You're conflating price and value. I'm going to repost a comment I made a month ago. https://news.ycombinator.com/item?id=32857769 https://news.ycombinator.com

You're conflating price and value. I'm going to repost a comment I made a month ago. https://news.ycombinator.com/item?id=32857769 https://news.ycombinator.com/item?id=32857769 > It's important to note that price, the last traded price, and value are all distinct concepts. The last traded price is the only one of these we can measure ahead of time, so we often use it as a metanym for these other concepts. ... > When the oil futures went negative, it wasn't the case that the value of oil was negative - this was about the structure of the market and the sorts of positions people were caught in when the pandemic hit. We continued to consume oil throughout the pandemic, and so I'd say we continued to value it. > Another example would be, if a rancher has a lot of cow poop, they might pay a farmer to take it away. You could say that the cow poop has a negative price on it. But the farmer is going to make use of it as fertilizer; from the farmer's perspective, this is a commodity that has value. > It's true though that there are a million theories of value and it's impossible to say what something's value is definitively, you can only make a decision about what is value is to you. I'd expand that you actually have to define what value means to you, relative to the context in which the discussion is taking place. You'll likely find yourself considering value from different perspectives in different situations; I find myself doing so.

WalterBright 4y ago
> You're conflating price and value. The negotiated final price is the value. > When the oil futures went negative, it wasn't the case that the value of oil was negative The value of the futures is different than the value of the oil itself. Besides, the end result of a future is taking delivery. Most futures contract buyers have no intention of taking delivery, and have no way to take delivery. That explains the negative value of those futures. > I'd expand that you actually have to define what value means to you, relative to the context in which the discussion is taking place. You'll likely find yourself considering value from different perspectives in different situations That doesn't change at all the fact that the value is determined by what someone is willing to pay for it. That value is different for different people, as you say.
- maxbond 4y ago
  What I meant was, the definition of value is different for different people, as well as yourself in different situations. The magnitude of that value will also differ, of course. You're free to define value to always be price, it's a matter of opinion and by my own logic it's a valid thing to do, but separating the two concepts makes things much clearer when market effects distort the price of something who's value doesn't seem to have changed.
  - WalterBright 4y ago
    Yes, every item has different value to every person. > market effects distort the price of something who's value doesn't seem to have changed. This is still making the mistake that value is independent of what people are freely willing to pay for it.
    - maxbond 4y ago
      This is just a very narrow frame to view these concepts from. It's not per say wrong, it's a useful model much of the time, but it's silly to insist that it is the only way to look at things and will needlessly cut off useful avenues of analysis. For instance, things can have value, even if they are never a part of a transaction. My work ethic has economic value to me, and if I were to lose it my income would be reduced by 100%, but it's impossible for me to sell it because it is impossible for anyone else to possess it; it's price is undefined. Similarly, no one has ever paid the algae and plants to produce oxygen, and no one has ever paid the sun to shine. But without these ecosystem services, the GDP of the world would be reduced by 100%. If these examples are too abstract for your taste, there are many other examples. No one pays for volunteer work (by definition), but there's lots of volunteer work that, if people stopped doing it, our society would grind to a halt. One example is open source software; most of the work which goes into it is unpaid, yet our industry cannot function without it. Another is parenting; most people aren't compensated for having & raising children - indeed, it costs them huge amounts of money - but there is no economy without people performing this function. I submit there are more things in the economy than are dreamt of in this philosophy.

WalterBright 4y ago

> You're conflating price and value. The negotiated final price is the value. > When the oil futures went negative, it wasn't the case that the value of oil was negative The value of the futures is different than the value of the oil itself. Besides, the end result of a future is taking delivery. Most futures contract buyers have no intention of taking delivery, and have no way to take delivery. That explains the negative value of those futures. > I'd expand that you actually have to define what value means to you, relative to the context in which the discussion is taking place. You'll likely find yourself considering value from different perspectives in different situations That doesn't change at all the fact that the value is determined by what someone is willing to pay for it. That value is different for different people, as you say.

maxbond 4y ago
What I meant was, the definition of value is different for different people, as well as yourself in different situations. The magnitude of that value will also differ, of course. You're free to define value to always be price, it's a matter of opinion and by my own logic it's a valid thing to do, but separating the two concepts makes things much clearer when market effects distort the price of something who's value doesn't seem to have changed.
- WalterBright 4y ago
  Yes, every item has different value to every person. > market effects distort the price of something who's value doesn't seem to have changed. This is still making the mistake that value is independent of what people are freely willing to pay for it.
  - maxbond 4y ago
    This is just a very narrow frame to view these concepts from. It's not per say wrong, it's a useful model much of the time, but it's silly to insist that it is the only way to look at things and will needlessly cut off useful avenues of analysis. For instance, things can have value, even if they are never a part of a transaction. My work ethic has economic value to me, and if I were to lose it my income would be reduced by 100%, but it's impossible for me to sell it because it is impossible for anyone else to possess it; it's price is undefined. Similarly, no one has ever paid the algae and plants to produce oxygen, and no one has ever paid the sun to shine. But without these ecosystem services, the GDP of the world would be reduced by 100%. If these examples are too abstract for your taste, there are many other examples. No one pays for volunteer work (by definition), but there's lots of volunteer work that, if people stopped doing it, our society would grind to a halt. One example is open source software; most of the work which goes into it is unpaid, yet our industry cannot function without it. Another is parenting; most people aren't compensated for having & raising children - indeed, it costs them huge amounts of money - but there is no economy without people performing this function. I submit there are more things in the economy than are dreamt of in this philosophy.