What is it worth?

In 1989 as a 17 year old college student I had a childish view of what it took to get by in the world. Foolishly, I thought that $150 (7,500 Rs.) was sufficient to spend a month in Greece (it was my own hard earned money and seemed a lot to me at the time). $150, I found out, is not a lot of money. It worked out to about $5 a day. In purchasing power parity terms it was somewhere below $2 a day in an India. What followed was hardly a sightseeing tour but an exercise in subsistence living. For $1 there were hostels that would let you roll out your sleeping bag on their roof. If it rained they would accommodate you in the corridors by the bathrooms. In Athens I could not afford the entrance fee to the Acropolis but discovered that if you climb the hill from behind the Plaka you can scale the wall and see it for free. On my budget bus travel was wildly expensive but if I spent long enough it was somewhat easy to hitch a relatively trustworthy ride. I had to save most of the money for food. On most days I used to buy a loaf of bread, a piece of cheese and a tomato and stretch it out for the day.

For me it was a game, an experiment, but half the world lives in this kind of subsistence paradigm. In rural India, according to the NSSO studies, people use 50 to 70% of their income to buy food, to fuel the survival of the body. My statistics were virtually identical. Aggregated over time about 60% of my daily expenditure was for food. 30% for shelter. The remaining 10% for transport and for one 30 second phone call to my parents from a post office in Thessaloniki (Of course I’m fine, see you in a few weeks. Where am I? What does it matter? OK.. OK..don’t shout, I’m in Thessaloniki). A good part of my day was spent comparing the size and price of loaves of bread and pieces of cheese. Excuse me, please can I have that one instead? (It looks just a tiny bit bigger). At the end of the day I was always a bit hungry so I had an acute sense for the caloric value I needed to derive from the money. Under these constrained circumstances my value judgements were very self-centred and tangible. ‘Value’ was almost entirely a calorie conversion.

When we operate in surplus of subsistence, however, there is a fundamental transition in our valuation paradigms.


Beyond the subsistence paradigm our perceived value becomes increasingly relative and not absolute. What I pay for anything has very little to do with my survival needs. It has everything to do with what other people think and get. Value judgement is no longer individual. It is a complex collective determination. You’ll pay what you think is reasonable by market perception. How much did you get your TV for? OK Sounds about right. You’re happy with what you paid for something until someone has paid less. You’re happy with what you got paid for something until you find out someone got paid more for the same thing. Job seekers set their salary benchmarks based on what their classmates are getting paid, or at least what they think their classmates are getting paid. It rarely has anything to do with an absolute ‘value’ of what they produce. The more geographically extensive the market, the less efficient the information of what others think. Who actually knows what someone or something is worth?

If, beyond survival, ‘value’ is simply collective perception, a construct of our collective mind what do we mean when we talk of creating ‘value’? Is it about enhancing our capabilities of survival? Of our perceived happiness? What is your value paradigm? How do you know what something is ‘worth’?