All action involves the employment of scarce means to attain the most valued ends…the ends [we choose] are the ones [we] value most highly — Murray Rothbard

This post is the second in a series on free market money, a.k.a (some) cryptocurrencies. In the previous post I gave a comprehensive working definition for “money”. Let’s now look at some related topics.

Most people acquire money through work, so I’d like to start with a brief discussion about work itself. We have to understand the nature of work in order to appreciate the value of money (i.e. your favorite cryptocurrency in the future, hopefully).

After a brief chat about work, we’ll talk about value, and price, and don’t you dare try to conflate those two. If we’re sloppy about our conceptions of value and price, we’ll get this whole free-market money thing wrong.

Work

Why did you go to work today?

Fine, maybe you didn’t go to work today, or perhaps you didn’t work at all today, or any time recently. But chances are you, you’ve done it sometime in your life. Let me ask another way: Why do you “work” at all (regardless of when and where)? Wait, what even is “work”?

I’ll cut to the chase: work, like all economic action, is an exchange. You exchange something you value less for something you value more. It isn’t a place, a block of time, or a specific activity— it’s an exchange, an action taken with a specific goal (end) in mind.

In general, man can choose to spend his time in one of two ways: leisure or labor. While leisure is considered an end in itself — something we enjoy (“consume” in economic parlance) for its own sake — labor is a means to an end, an exchange of time and biological effort for a good. That last part is important. It is what distinguishes an activity alone, with “work”. There’s a difference between running for the fun of it, and running for a living (as a professional athlete). The difference is your purpose.

“Work”, is just the colloquial term for labor as described above.

Value

Why did you go to work today?

I’m asking again because you didn’t really think about it last time. You just plowed ahead and kept reading. Give it some thought, then read on…

To answer the question — and yes, I can answer that question for you, even though I don’t know you — you worked today (or whenever) because you valued the thing you got in return more than the work.

You valued it. See that emphasized d? It’s not important because of past tense, but because it’s a verb. Value is something you do, as a rational human being (and yes, all economic human action is rational, if you have a problem with that take it up with the Austrians).

Value can also be a noun, but that’s not how you should think of it. Think of it as a verb and your life will be better. But to satisfy you sticklers, value-the-noun is just the result of value-the-verb. Something has (a) value because someone gave it (a) value.

One more thing about value: it’s not a cardinal concept, it’s a rank, an ordinal concept. You may be able to sum values in mathematics, but you don’t in economics; you can’t add your values together. You can’t say I value one Mozart concert 6.27 units and a stick of string cheese 4.18 units to arrive at a total value of 10.45 units for eating string cheese during a Mozart concert. You can say that you value a Mozart concert more than (or less than) a stick of string cheese. You can order them. That’s all.

Price

I get it. You just want your favorite crypto to go to the moon. Well, I have good news for you. Although prices cannot be predicted through calculation, there is a direct relationship between value and price. Namely, all other things being equal, as people value thing A over thing B, the price of A does (necessarily) increase in terms of B.

That little “all other things being equal” part might bug you. What good is it if I can only use it in a lab, rather than the non-ceteris-paribus real world? The thing is, when you choose a certain action you define its value in that instance. You valued it, and thus it has that value.

The one thing you can control is your choices, your actions, and that’s what matters because that’s what gives things value. Hence my statement from the last post that “Your favorite cryptocurrency will not become money by accident — it must be willed to become such.”

The same applies to price. If you want the price of your favorite crypto (money) to rise, you must make specific choices, take specific actions. That’s what gives it value, and hence, price. Price is just the ratio of two items A/B, the exchange of two things valued in certain proportions.

I’ll give recommendations in later posts about specific actions you can take to give your crypto a higher price. For now, let’s go back to where we started.

Looking ahead

Why did you go to work today?

You went to work to exchange something. Most likely you gave your time and talents, for money. What kind of money? Free-market money, or nation-state money? That too was a choice, a very important choice, with accompanying values and resulting prices.

In a later post we’ll look at the extreme importance of the labor market, specifically why it is so important to price in terms of the money you value the most.

But before we dig into that, we’ll talk more about this so called “money” foisted on humanity by the nation states of the world. One thing is sure, you didn’t go to work today to be robbed, but that’s what happened.