Measuring Worth Is a Complicated Question
Intrinsic things are priceless: the love of your life, or a beautiful sunset. There is no objective way to measure these, nor should there be.
The worth of monetary transactions is also difficult to measure. While a price, wage, or other kind of transaction can be recorded at a precise point in time, the worth of the amount must be interpreted. The father of economics, Adam Smith, discussed this very question in one of the most important books in economics, The Wealth of Nations (1776):
“The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it… But though labour be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly estimated… Every commodity, besides, is more frequently exchanged for, and thereby compared with, other commodities than with labour.“
One can imagine that a hamburger of the same price is “worth” more to a starving homeless person than to a very wealthy one. An allowance of five pennies a week was worth more to a child in 1902 than it is to a child today. We do acknowledge though, as Oscar Wilde pointed out in his famous quip, money worth and intrinsic worth are not necessarily same.
“Cecil Graham: What is a cynic?
Lord Darlington: A man who knows the price of everything, and the value of nothing.
Cecil Graham: And a sentimentalist, my dear Darlington, is a man who sees an absurd value in everything and doesn’t know the market price of any single thing.”
—Oscar Wilde, Lady Windermere’s Fan, 1892.
It can be more difficult when the question is to determine the “historical” worth of something.
The price, even deflated for inflation, is not enough. Was Andrew Carnegie richer than Bill Gates?
Did Babe Ruth make more than LeBron James? Was the cost of a loaf of bread more then than now?
These questions all depend on the context and the comparators on this web site enable users to make their own comparisons. We discuss these issues more in the essay Measures of Worth, which provides a methodology for deciding which measure of worth is appropriate
for the subject at hand.
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