Price Vs. Value

“A cynic is someone who knows the cost of everything and the value of nothing.”

-Oscar Wilde

I recently watched an episode of one of the great sit-coms of the 2000s, Arrested Development. In this episode, the spectacularly crass character, Gob Bluth (played by the fantastically hilarious Will Arnett), boasts with insulting frequency about his “$6,000 suit.” It’s clear to the audience that the only thing he truly knows about the suit is its price tag, mentioning it in an attempt to belittle his employees.

This got me thinking…

We use dollars as a measure of quality when we lack a true understanding of the quality of an item. If I bought a Lamborghini, I could laud it for its speed, its horsepower, its magnificent interior, or its iconic shape. Yet, typically, all I hear bragged about it is its price tag. If I wore an Armani suit, I could highlight its fine silk lining, its high thread count, or its attentive tailoring. But, as we so often hear, the wearer boasts only about how many treasury coupons they traded for it. $6,000 doesn’t actually tell me anything about the suit itself. It’s typically a reliable indicator of quality, but it’s important to remember that it’s just a number assigned by the trends of a market, the amount of coupons needed for an agreeable exchange with a merchant.

When we understand the true value of a thing, we don’t need to translate that value into terms of coupon exchange. What if we spoke this way with things like vacations? We say it was a “beautiful week” not a “$5,000 week.” Of course, it’s well-understood that a trip to Mykonos will run you a pretty buck and a half, but it’s not the defining feature of the thing. It’s simply a translation. Take another example: an old oak tree may be so valued that people might pay $50,000 to save or transplant it. We wouldn’t call it a $50,000 oak. Its value lies not in the bank notes traded for the labor and materials. That’s simply the price of human services. Its value lies within its comforting shade, its gorgeous, twisting branches, its support of life in its ecosystem.

While having a numerical standard for measuring costs is helpful in a large-scale society, relying too heavily on this system of measurement can lead to a misunderstanding of inherent value, as we now see.

We use the term “priceless” to describe this inherent value, as a way of saying that the value method we’re accustomed to (pricing) fails at a certain point. It’s our way to remind each other to exit the lens of price every once in a while; to jerk us out of our social habit of pricing everything. If we weren’t so apt to forget this intrinsic merit, we wouldn’t even need the term, but apt we are.

It reminds us that the value in things simply defies numbers.

I hope your week is priceless.

-John