In money news an article about money "Time to End Monopoly of the Dollar" by Julie Crawshaw gives a good idea of how we value a dollar. We place a value on this paper and use it to purchase goods and services. As the years go on the value of that dollar becomes less and less. It creates a way for things to be priced and valued at more then they are actually worth. With placing a value on the dollar we have create a false idea of how much something should be.
According to Locke money represents labor value. The value of labor that was put into an object to create something that consumers want to purchase is the value that it should be old for in the market. Money according to Locke is stored up labor value and since money can't spoil people can acquire as much as they please. So who really gets to decide the price tag placed on the product?
Today we place a value on the dollar but the real value is in the labor. Things should be priced according to the amount of labor put into it, with the dollar value. If the value is in the dollar are we paying for the dollar or the labor? Or with the value of the dollar in a decline are we paying for both? Locke would say that men have agreed on the use of money so the unequal possessions are ok! People work to gain money and so what they acquire and are willing to pay is in the hands of the consumer.
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I'm not sure what it is that you're saying here. In reality, a dollar is worth the few cents, if that, that the ink and paper it costs to manufacture it are worth. The reason we say a dollar is worth a dollar is because we, as the market, have confidence in it. We have established the value of a dollar in our collective minds, and therefore it is worth what we believe it to be worth. I think that this is exactly what Locke meant when he says we humans consented to the use of money. A dollar is worth a couple cents, but we have agreed that it represents one hundred cents.
ReplyDeleteRegardless of a dollar's purchasing power in the market, which is subject to the economic cycle (peak, recession, depression, recovery), the dollar still represents how much we value the labor that it represents. When someone is hired they might make 45,000 and in a recession they might make 40,000 for the same job, but that salary still represents the value that your employer believes your labor is worth, regardless of the economic situation of the economy. So, what I'm saying is that the value of your labor is not what changes, the value of what your labor is believed to be worth is what fluctuates, and that is in accordance with what the value of a dollar is believed to be.
So, I guess what I'm saying is that a dollar is always worth a dollar. No one would ever give 5 dollars for 1 dollar, and no one would ever accept 10 cents for 1 dollar. But, someone might give you one dollar to go get them a Pepsi, because they believe that is what your labor is worth. If there was massive inflation, they might give you ten dollars to go get that same pepsi. The only reason the amount of money is different is due to what we believe that money is worth, not due to any change in the value of the labor which it represents.
Thanks for the psot! In Locke's view, money is a medium to store labor. I think it's muck more easier to count the money, instead of valuing the labor. For example, A puts one hour labor on planting while B puts one hour on hunting but gets nothing. Are their labor/value equal to the same amount of dollars? In terms of the problem of value decreasing in your post, i think you mean "inflation". For what it happend, financial analysts may tell you coz too much money in the market so the price goes up. Well. in other view, dose it mean too many people're working too hard to put their labors on? Very intereting post.
ReplyDeleteI think the dollar has its value because we decided to give it a value. I agree with you that the value of the dollar is falsified by people because its not worth anything since its regular paper. As my economics teacher once told us that the dollar has value because are government tell us it has value and we people believe it making the whole idea true. Money was invented to store labor so that it could be used later for exchanges. Unfortunately as the world progresses, people praise money more over labor when both were suppose to be equal. Money can be printed, but labor can't. Its a skill that a person has that according to Locke will always be of greater importance than money since it cant be made instantly.
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