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This only because humans need water to live, and they are the ones performing the valuation. There is nothing "intrinsic" about it. Water has very large demand
by dwaltrip 13y ago
This only because humans need water to live, and they are the ones performing the valuation. There is nothing "intrinsic" about it. Water has very large demand that is extremely entrenched due to its biological importance. This is unlikely to change, and this confusingly may seem like some sort of intrinsic value. But it isn't.
Value is an extrinsic property, meaning it stems purely from entities outside of the object itself. If humans evolved to not need any water, then perhaps they wouldn't value it at all. How can the intrinsic value of object A depend on the nature of some external object B?
- rantanplan 13y agoYou would have saved a lot of typing if you had just read the definition of "intrinsic value" as a finance term. Basically in your first paragraph you explained why it has intrinsic value. You obviously brought a philosophical argument to an economics debate :P This is EC-101
- dwaltrip 13y agoHaha ok glad we are on the same page now. I was originally responding to a comment about the intrinsic value of gold. How does one apply http://en.m.wikipedia.org/wiki/Intrinsic_value_(finance) http://en.m.wikipedia.org/wiki/Intrinsic_value_(finance) to gold? It produces no cash flow or income. This is why I used a philosophical approach :p
- rantanplan 13y agoHeh, approaching economics from a philosophical standpoint is the road to madness. I'd argue that sociology is a better approach to understanding economics, but then I would have fallen into your trap; because then we'd have a philosophical discussion :P I'm far from an expert in economics, but if you're interested in the (very dirty)history of gold, the wikipedia page of the "Gold Standard" is a good start. Time to sleep :)