The Essence of Value:

Understanding Economics Through Menger's Lens

Ever wondered why a diamond is more valuable than water, even though water is essential for survival?

Welcome to the world of Value Economics, a concept molded by Austrian economist Carl Menger.

🔷 The Man Behind the Theory: Carl Menger

He's the genius who revolutionized economics in the late 19th century.

Menger moved us from a focus on the 'inherent' value of goods to 'subjective' value, which relies on human perception.

🔷 What is Value?

According to Menger, value isn't inherent in goods.

It's a subjective assessment we make, based on the importance of those goods for our lives and well-being.

It's a judgment call.

🔷 Economic Goods vs. Non-Economic Goods

Economic goods are scarce, thus in high demand.

Non-economic goods, like air, are plentiful and not competitive.

The keyword here is scarcity. #BTC

🔷 The Utility Factor

Utility is how good an object is at satisfying human needs.

It's the game-changer that transforms something from 'meh' to 'must-have.' 👌

🔷 Marginal Analysis: The Game-Changer

Menger introduced marginal analysis to help us understand the importance of a 'unit' of a good. It revolutionized how we prioritize our needs over a multitude of goods. 🧮

🔷 The Dance of Scarcity

Scarcity forces us to make choices.

We prioritize goods that are scarcest but give us the highest utility.

It's like choosing between that last slice of pizza 🍕 and a salad 🥗 when you're super hungry.

🔷 Value in a Fluid World

The world changes, and so does the value of goods.

Example: oil

It was a nuisance until we found its utility in powering engines.

🔷 Subjective Value: It's All in Your Head

Your needs dictate the value of goods.

It's your world; goods just live in it!

Value arises and disappears with your changing needs and circumstances.

🔷 The Economic Impact

Understanding value helps us make choices that shape our world, from production to consumption, and even to global economics. 💪

♦️ The Mengerian Reset Plan

Recap:

1️⃣ Question the Utility: Assess the real need for goods in your life.

2️⃣ Scarcity Check: Prioritize what's scarce and essential.

3️⃣ Subjective Valuation: Be conscious of your needs.

4️⃣ Marginal Analysis: Understand the worth of each additional unit.

5️⃣ Make Informed Choices: Let the understanding of value guide your decisions.