Taking the examples of a carefully-crafted wedding ring that is melted back into raw materials, or a once-valuable house that is demolished on account of political contrivances, while these may indeed represent a loss of value, the process of new value created is ongoing.
What baffles me is how we assign value to something. We convince ourselves that by shaping materials we’ve added value - the amount to be determined how and by whom? - but by allowing materials to revert to raw form, the value goes away. The purported image of the Virgin Mary on a piece of toast sold for how much?!!! The determining factors must include uniqueness, scarcity, and objective benefit to the purchaser(s).
How does one make a living from words? The words must bestow some benefit to the hearers, so much so that they will part with their substance to receive them, both retroactively and in advance. Fascinating.
A lot of this to me is like smoke and mirrors. I am a true simpleton insofar as I readily accept what the Psalmist writes: “The earth is the LORD’S, and all it contains, the world, and those who dwell in it.” So “ownership” and “value” and “waste” are things I view with curiosity and experience concretely at the same time. Thanks for pointing me to that article. I’ve read a few others of yours and have been much edified.
Thanks for your kind compliments; much appreciated!
I think the answer to the question you pose is that it’s in the hands of the free market. The invisible hand, so to speak.
It doesn’t matter whether you or I think this car is worth $25K or $35K or $95K, the question is whether someone will spend his own money on it. And if he will, then his purchase is what defines how much value the carmaker has added to the raw materials he purchased to manufacture it.
And that’s one of the reasons why the same number of companies are more financially productive in a boom year than in a lean year; it’s not enough to make a product, someone has to choose to buy it. And what they choose to spend is what defines how much money you’ve made; how much value you’ve created.
This is the key reason why the traditional Keynesian economic model is so wacky; it pretends that economic activity is predictable by formulas. In fact, it’s the Misesian or “Austrian School” that really makes sense, because this is the economic theory that acknowledges the fact that economics is a social science, not a hard science. All economic activity is based on human choices. (and libertarian economic theory is to empower those humans, both as producers and consumers, to have as free a range of choices as possible!)
Cheers,
JFD