The price-value paradox | Daniel Susskind, Abby Innes, Richard Kibble, and Will Hutton
67Daniel Susskind, Abby Innes, Richard Kibble, Will Hutton discuss the advantages and limits of the price mechanism.
When it comes down to it, does price really have anything to do with value?
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From fabulous houses to glamorous holidays, superyachts to personal helicopters, we often assume expensive things are the most desirable and the market accurately determines the true value of things. But others point to the truism that relationships are the most important factor in our lives, and love and friendship are free. From swimming in the sea to climbing a mountain, from carrying a child on our shoulders to sharing a sunset with a lover, price they argue is no guide to life. As Oscar Wilde remarked, "a fool is someone who knows the price of everything and the value of nothing". Price, as can be seen from tulips and bread, is a matter of fashion and availability than of underlying value.
Should we conclude that price has nothing to do with value and give up the idea that the expensive is desirable? Should we construct an economy whereby the things that really matter have an equal footing with items that are currently highly-priced? Or is this a romantic illusion, and the price mechanism an extraordinarily powerful and effective means of assessing the value of everything?
In collaboration with Deloitte.
#economics #finance #costofliving
Will Hutton is a leading political economist, author and journalist. Throughout his career, he has gone from being an investment banker in the City, to holding the Economics editorship of the Guardian and BBC2 Newsnight and the Principal of Hertford College Oxford. Daniel Susskind is an associate member of the Economics Department at Oxford University specialising in growth and the impact of AI. His most recent book Growth: A Reckoning challenges the way we think about growth. Richard Kibble is a Deloitte Partner and former banking executive. Abby Innes is an Associate Professor in Political Economy at the LSE focusing on how the UK’s economy mirrors the Soviet Union. Her work blends the philosophy of science, economics, and history. Hosted by the BBC's Roger Hearing.
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00:00 Introduction
00:22 What is value?
03:35 Do markets democratise value?
05:45 There are essentially two types of value
08:08 The gamification of life and society
09:14 Can everything be quantified by the price mechanism?
11:16 The origins of GDP
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