PP pops up in a boglethread about risk parity

[Kshartle]

In other words, Kshartle, what is subjective cannot be inherent, even if some of inputs that determine its subjectivity are inherent.

If you liked eating a hamburger because it had bison meat, and bison meat is your favorite food in the entire world, that wouldn't make the hamburger inherently good.

I would respond but I don't think I understand your point. It might be clear and I'm just not understanding.

[dualstow]

I think looking at the way "intrinsic" is defined by numismatists is a good starting point. That is, the metal that a coin is composed of rather than the number stamped on the face.
Everything else here is a little too much like Bill Clinton's "depends on what the definition of 'is' is."

That's why a poor person would likely value the Mona Lisa much much less than a wealthy person.

That doesn't make any sense to me at all. Poor people value these paintings highly, too, and some of them steal them in order to become rich.

[Libertarian666]

I think looking at the way "intrinsic" is defined by numismatists is a good starting point. That is, the metal that a coin is composed of rather than the number stamped on the face.

Right. The composition of the coin is an intrinsic property, whereas its value, whether according to a number stamped on it or the value attributed to the metal of which it is composed, is subjective.

[Kshartle]

So either the Mona Lisa has no value, intrinsic value or extrinsic value. Or a 4th possability that I'm missing. Which one is it?

The fourth possibility: that you are setting up a binary choice and then blinding yourself to alternative options. You say, "value is intrinsic or extrinsic!" I say:

1) regardless of whether the value of a thing is intrinsic or extrinsic, it is subjective (you agreed with this)
2) what is subjective cannot be inherent (you have not yet stated your position in this)
3) therefore, value cannot be inherent, since it has been agreed to that it is subjective and something cannot be both subjective and inherent.

If you believe point 3 to be false, then it must be because you disagree that subjectivity and inherency are mutually exclusive. Do you?

Inherent according to Webster's:

involved in the constitution or essential character of something :  belonging by nature or habit :  intrinsic <risks inherent in the venture>

Properties are intrinsic. They are valued subjectively, like anything else. Something that is valued not for it's utility is valued for it's properties. This is the intrinsic value. It is value based on intrinsic properties not extrinsic utility.

Do you think something cannot be valued for it's intrinsic properties beyond it's utility value? If so, let's call a polite end to the discussion.

[Kshartle]

I think looking at the way "intrinsic" is defined by numismatists is a good starting point. That is, the metal that a coin is composed of rather than the number stamped on the face.
Everything else here is a little too much like Bill Clinton's "depends on what the definition of 'is' is."

That's why a poor person would likely value the Mona Lisa much much less than a wealthy person.

That doesn't make any sense to me at all. Poor people value these paintings highly, too, and some of them steal them in order to become rich.

You think a person with $500 to their name values a $500 cell phone the same way they value $500 worth of food?

You think a millionaire isn't more likely to value the cell phone more than the food?

Supply and demand. The greater your personal supply of dollars the less likely you are to value anyone of them.

Maybe this a poor example since half the country will starve for a cell phone at this point.

[Kshartle]

I think looking at the way "intrinsic" is defined by numismatists is a good starting point. That is, the metal that a coin is composed of rather than the number stamped on the face.

Right. The composition of the coin is an intrinsic property, whereas its value, whether according to a number stamped on it or the value attributed to the metal of which it is composed, is subjective.

But the value is based on the intrinsic properties. This is the definition of intrinsic value. Subjectivity has nothing to do with anything.

It's like saying "well if something is worthless to people then it has no value". Well...yeah....do we need to mention that?

[Pointedstick]

Maybe MT will have more luck. I'm bowing out.

[Libertarian666]

I think looking at the way "intrinsic" is defined by numismatists is a good starting point. That is, the metal that a coin is composed of rather than the number stamped on the face.

Right. The composition of the coin is an intrinsic property, whereas its value, whether according to a number stamped on it or the value attributed to the metal of which it is composed, is subjective.

But the value is based on the intrinsic properties. This is the definition of intrinsic value. Subjectivity has nothing to do with anything.

It's like saying "well if something is worthless to people then it has no value". Well...yeah....do we need to mention that?

The value is based on the intrinsic properties, but it is not itself an intrinsic property, because it requires someone to do the valuing, which intrinsic properties DO NOT require.

[Gumby]

But the value is based on the intrinsic properties.

But, that's just how Metallism bases value of a currency — not necessarily the human race.

When paper currency was first used, metallists explained the use of paper currency by saying that the paper was 'backed' by precious metals, which gave them value.  When the people continued to accept intrinsically worthless paper currency after the elimination of any metal backing, metallists were left with a fundamental problem.

This is the definition of intrinsic value.

Well, you're referring to the Intrinsic Theory of Value.

http://en.wikipedia.org/wiki/Intrinsic_theory_of_value

You can certainly describe the theory to us — or show examples in human history where the theory may have been used — but that doesn't mean that the theory is always followed in all circumstances. Although. normally the Intrinsic Theory of Value refers to the intrinsic value of a business.

[Kshartle]

Right. The composition of the coin is an intrinsic property, whereas its value, whether according to a number stamped on it or the value attributed to the metal of which it is composed, is subjective.

But the value is based on the intrinsic properties. This is the definition of intrinsic value. Subjectivity has nothing to do with anything.

It's like saying "well if something is worthless to people then it has no value". Well...yeah....do we need to mention that?

The value is based on the intrinsic properties, but it is not itself an intrinsic property, because it requires someone to do the valuing, which intrinsic properties DO NOT require.

Everything requires someone to do the valuing. All value is subjective.

Value is not an intrinsic property. Nothing has the property of value.

Things do have other properties. Humans value these properties. Sometimes the properties do not have extrinsic value. They have value not because they lend themselves to utility. Their value stands alone and people value the properties anyway.

This is the meaning of intrinsic value.

If I defined intrinsic value as "The value that humans subjectively place on the properties of something that have no utility other than their desirability", would that suffice?

Do you agree that some things have properties which people value even though they have no apparent utility? There are many things that have these properties. Some of them have utility value as well. You must agree that gold is not the current price it is based on utility right? Again what utility does the Mona Lisa have? What does she achieve? Beauty is not a property. It's a subjective judgment based on the properties.

[Kshartle]

But the value is based on the intrinsic properties.

But, that's just how Metallism bases value of a currency — not necessarily the human race.

When paper currency was first used, metallists explained the use of paper currency by saying that the paper was 'backed' by precious metals, which gave them value.  When the people continued to accept intrinsically worthless paper currency after the elimination of any metal backing, metallists were left with a fundamental problem.

This is the definition of intrinsic value.

Well, you're referring to the Intrinsic Theory of Value.

http://en.wikipedia.org/wiki/Intrinsic_theory_of_value

You can certainly describe the theory to us — or show examples in human history where the theory may have been used — but that doesn't mean that the theory is always followed in all circumstances. Although. normally the Intrinsic Theory of Value refers to the intrinsic value of a business.

No one is talking about currencies and what people are normally referring to isn't relevant. None of that is what anyone is talking about. We're talking about whether or not something can have intrinsic value. That is, value beyond it's utility value. I think the answer is blazingly obvious but perhaps not so.

[dualstow]

This is probably my last post in this thread, too, but here goes. I un-nested the quotes.

That's why a poor person would likely value the Mona Lisa much much less than a wealthy person.

That doesn't make any sense to me at all. Poor people value these paintings highly, too, and some of them steal them in order to become rich.

You think a person with $500 to their name values a $500 cell phone the same way they value $500 worth of food?

You think a millionaire isn't more likely to value the cell phone more than the food?

Supply and demand. The greater your personal supply of dollars the less likely you are to value anyone of them.

Maybe this a poor example since half the country will starve for a cell phone at this point.

As long as a medium of exchange is in place, I think $500 is $500.
If a starving person acquires a painting with an auction price of millions, maybe he will visualize that in chicken wings or banquets.
If a rich person acquires the same painting, maybe he will visualize it in gem-encrusted cell phones.
(Maybe in an apocalyptic setting with no trade, a starving person wouldn't value the painting so much, but still, some of the poor love art as much or more as many of the rich).

[Gumby]

We're talking about whether or not something can have intrinsic value. That is, value beyond it's utility value. I think the answer is blazingly obvious but perhaps not so.

The answer is no. Not without a market (run by humans) to determine that value.

[Libertarian666]

But the value is based on the intrinsic properties. This is the definition of intrinsic value. Subjectivity has nothing to do with anything.

It's like saying "well if something is worthless to people then it has no value". Well...yeah....do we need to mention that?

The value is based on the intrinsic properties, but it is not itself an intrinsic property, because it requires someone to do the valuing, which intrinsic properties DO NOT require.

Everything requires someone to do the valuing. All value is subjective.

Value is not an intrinsic property. Nothing has the property of value.

Good, so we agree on that.

Things do have other properties. Humans value these properties. Sometimes the properties do not have extrinsic value. They have value not because they lend themselves to utility. Their value stands alone and people value the properties anyway.

This is the meaning of intrinsic value.

If I defined intrinsic value as "The value that humans subjectively place on the properties of something that have no utility other than their desirability", would that suffice?

Do you agree that some things have properties which people value even though they have no apparent utility? There are many things that have these properties. Some of them have utility value as well. You must agree that gold is not the current price it is based on utility right? Again what utility does the Mona Lisa have? What does she achieve? Beauty is not a property. It's a subjective judgment based on the properties.

Yes, beauty is not a property but an evaluation, so again we are in agreement.

As to whether gold or the Mona Lisa have properties that are valued even though they have no apparent utility, I suppose that depends on your definition of "utility".

My definition is of utility is the ability to provide a service that anyone wants.

My opinion is that gold is undervalued currently, according to my estimate of its ability to preserve wealth across a financial singularity, an event that I consider vastly more likely than does almost anyone else.

As for the Mona Lisa, her utility is to please those who look at her.

[Kshartle]

This is probably my last post in this thread, too, but here goes. I un-nested the quotes.

That's why a poor person would likely value the Mona Lisa much much less than a wealthy person.

That doesn't make any sense to me at all. Poor people value these paintings highly, too, and some of them steal them in order to become rich.

You think a person with $500 to their name values a $500 cell phone the same way they value $500 worth of food?

You think a millionaire isn't more likely to value the cell phone more than the food?

Supply and demand. The greater your personal supply of dollars the less likely you are to value anyone of them.

Maybe this a poor example since half the country will starve for a cell phone at this point.

As long as a medium of exchange is in place, I think $500 is $500.
If a starving person acquires a painting with an auction price of millions, maybe he will visualize that in chicken wings or banquets.
If a rich person acquires the same painting, maybe he will visualize it in gem-encrusted cell phones.
(Maybe in an apocalyptic setting with no trade, a starving person wouldn't value the painting so much, but still, some of the poor love art as much or more as many of the rich).

I'm not sure what your point is. Is it that people don't change how they value things based on how much money they have?

[Kshartle]

As for the Mona Lisa, her utility is to please those who look at her.

The point is that the beauty is based on intrinsic qualities and not an external utility. People want to possess her not because they do anything with her, just to have her. I suppose looking at her can be interpreted as doing something.

What do you do with a gold coin that sits in your safe, waiting for nothing but the day you trade it to someone else so it can sit in their safe, because now you more highly value what you can get for it? It sits in your safe and does nothing, but you hold it because everyone knows it has value, for it's properties. It can accomplish this just as a nugget. Interestingly, making it a coin enhances the value of the intrinsic properties by proving they exist and verifying the weight to facilitate the judgement.

This is just our sticking point. That is the very definition of intrinsic value. Value for it's own sake and not anything else you can do with it.

I think we're beaten this to death, revived it and beaten it again.

[Kshartle]

We're talking about whether or not something can have intrinsic value. That is, value beyond it's utility value. I think the answer is blazingly obvious but perhaps not so.

The answer is no. Not without a market (run by humans) to determine that value.

Well lucky for us we live in a world with humans and will always live in a world with humans so it's pointless to mention the other.

It only takes two to make a market.

So then you agree that things can have intrinsic value. Good.

[dualstow]

I'm not sure what your point is. Is it that people don't change how they value things based on how much money they have?

No that is not my point. When this thread first got derailed, it happened by way of gold. Back in reply #12, you had this to say:

If they are aware of gold and can't understand why it has value then they don't understand the basic concept of why humans value certain things. Even if they don't value it they should be able to recognize why others would value it. If not they are missing a fundamental understanding of economics and human decision making.

The 'it' is gold, but it may as well be a painting. Even art thieves, be they rich or poor, be they art-lovers or completely neutral on the subject, recognize why others would value it, and they know that they could fence for cash to buy gold, food or cell phones.

{And of course this thread has since gotten carried away, delving into utility and much more than the $ amount stamped on a coin vs the coin's metallic composition}.

[Kshartle]

Even art thieves, be they rich or poor, be they art-lovers or completely neutral on the subject, recognize why others would value it, and they know that they could fence for cash to buy gold, food or cell phones.

You recognize why someone would value the Mona Lisa at 70 million or whatever? I don't. I recognize that they do, but not why. The second part of your statement is just that they recognize the price. Well, everyone recognizes the price. That recognition has nothing to do with affluence.

However, if everyone on Earth were poor, the Mona Lisa aint gonna fetch as much as she does in a world with rich people, since poorer people would value other things for the money so much more. No one would trade that equivalent amount of stuff for a little painting of a not-so-attractive (my opinion, I've seen it in person) woman if they didn't have gobs of money to cover all their other more important desires.

Imagine convincing an entire town of poor people to pool their money to buy the Mona Lisa to put her in the town square. They gave up all that money they could have used to buy food, horses, homes, whatever so they can look at her. Only someone extremely wealthy would do this because they have different values.

When I fly to Cali from Florida I can afford first-class every time, but I always go coach. I value the other things I could buy with the difference in price so much more. Now if I were a millionaire I would buy the first-class ticket. Not because I couldn't afford it before, but because I value my comfort on the flight so much more now.

Does that make sense?

[dualstow]

It makes sense, but these personal valuations that individuals place on things seems to be a side note. I don't understand what it has to do with the meaning of intrinsic. It's ok. Doesn't matter.

[Kshartle]

It makes sense, but these personal valuations that individuals place on things seems to be a side note. I don't understand what it has to do with the meaning of intrinsic. It's ok. Doesn't matter.

They don't really. I just made a comment about how the price was a product of the subjective value of ML to some and that was supported by wealthy people's value differences. I was just reinforcing the idea that value is subjective and you quoted it saying it didn't make much sense (the wealthy value difference vs poor).

I probably didn't express my idea clearly or with enough explanation.

[Gumby]

So then you agree that things can have intrinsic value. Good.

Uh, no. You're on your own on this one. I know you hate it when people use sources to back up their arguments (which is odd when you think about it), but can you actually find any sources that back up your argument?

[Kshartle]

We're talking about whether or not something can have intrinsic value. .

Not without a market (run by humans) to determine that value.

Kind of implies that with humans they can. You can see where your statement could lead to some confusion. You are contradicting yourself.

It's like me asking "Can a bird fly"? And you reply..."Not without air to provide lift". Well we have air so then yes they can fly according to you.

[Gumby]

We're talking about whether or not something can have intrinsic value. .

Not without a market (run by humans) to determine that value.

Kind of implies that with humans they can. You can see where your statement could lead to some confusion. You are contradicting yourself.

It's like me asking "Can a bird fly"? And you reply..."Not without air to provide lift". Well we have air so then yes they can fly according to you.

You are misunderstanding me. A business can have intrinsic value (that's the real definition of "intrinsic value" in the world of finance) but not a shiny rock in my opinion. Sorry, KShartle.

What you've done us taken your metallistic views and hijacked the real (finance) definition of intrinsic value to apply it to gold

[Kshartle]

A business can have intrinsic value (that's the real definition of "intrinsic value" in the world of finance) but not a shiny rock in my opinion. Sorry, KShartle.

What value can a shiny rock have, in your opinion?