More on the value of things.
1914-D Lincoln penny from ebay.
As regular readers may know, I am (for some unknown reason) interested in how the value of things changes over time, and how symbolic value and intrinsic value can exist in the same object – yet move in completely different directions.
For me, this comes to a head when thinking about currency and in particular coins. As you may have seen, it now costs more to produce the penny than the penny is worth. It occurs to me that there are several different scales of value at work in a penny.
1. Cost of production
2. Value of materials
3. Redemption or face value
4. Actual economic value.
While it may seem, at first that #3 is a constant – that a penny is always worth a penny, even this is not guaranteed. Some early pennies are now worth hundreds of dollars. And, it’s clear that all of the other scales of value can drift over time. Manufacturing can become more or less expensive, materials can become rare or abundant, and the economic value of a penny is totally dependent upon inflation or deflation.
To some extent, his is true for any kind of money and so our economic system is based on a set of symbols that are entirely changeable from one day to the next, and which are open to too many different axes of change.
They are also axes that move in opposite directions. Inflation raises the price of materials and the cost of production while reducing the economic value. Eventually this is a divide by zero scenario where the value of a penny is infinitely small and the cost of materials and production is infinitely high. At that point it will be smarter to melt the pennies down than it will be to spend them.
What does this have to do with marketing? I don’t know.