American Platinum Eagle
The American Platinum Eagle is the official platinum bullion coin of the United States. In 1995, Director of the United States Mint Philip N. Diehl, American Numismatic Association President David L. Ganz, Platinum Guild International Executive Director Jacques Luben began the legislative process of creating the Platinum Eagle. After over two years of work, the 99.95% fine platinum coins were released by the United States Mint in 1⁄10, 1⁄4, 1⁄2 and 1 troy oz denominations. In late 2008, the fractional denominations were discontinued, leaving only the one ounce denomination; the Platinum Eagle is authorized by the United States Congress, is backed by the United States Mint for weight and purity. Proof versions of the coins are intended for coin collectors and sold directly to the public whereas the bullion versions are sold only to the Mint's authorized buyers; the proof American Platinum Eagles are unique in the fact that they are the only U. S. bullion coins. Bullion versions are minted with the same design every year.
While minted, the uncirculated Platinum Eagles matched the proof designs and were struck on burnished coin blanks with a "W" mint mark signifying West Point, further distinguishing them from the bullion versions. The 1⁄10, 1⁄4, 1⁄2 troy oz coins are identical in design to the 1 troy oz coin except for the markings on the reverse side that indicate the weight and face value of the coin; as is the case with bullion coins, the face values of these coins are their legal values reflecting their issue and monetized value as coins. They are legal tender for all debts private at their face values; these face values do not reflect their intrinsic value, much greater. The 1 troy oz coin's face value of $100 is the highest to appear on a U. S. coin. The U. S. Government, has taken the position that paying debts with such coins at their face value, where the face value is lower than its intrinsic value, will implicate money laundering and tax evasion statutes; the specifications of each denomination are presented below: All denominations of the proof American Platinum Eagles carry a yearly design.
These coins are the only U. S. bullion coins that change designs every year. Since 1998, each design aside from the 2017 reverse commemorating the 20th anniversary of the program, has been part of a themed series: 1998–2002: The Vistas of Liberty series featured reverse designs depicting a bald eagle in a different landscape of the United States, in a different region of the country. 2006–2008: The Foundations of Democracy series featured reverse designs representing the three branches of government. 2009–2014: The Preamble to the Constitution series explored the core concepts of American democracy by highlighting the Preamble to the United States Constitution. The themes for the reverse designs for this program are inspired by narratives prepared by former Chief Justice of the United States, John Roberts, at the request of the United States Mint. 2015–2016: The Torches of Liberty series featured reverse designs from the Artistic Infusion Program which represent the "nation's core values of liberty and freedom".
2018–2020: The Preamble to the Declaration of Independence series features obverse designs portraying Lady Liberty and handwritten single-word inscriptions from the Declaration of Independence in addition to a new common reverse design. It is the first series to vary obverse designs, all created concurrently by the same designer, rather than reverse designs. On November 28, 2007, the U. S. Mint announced the American Eagle 10th Anniversary Platinum Coin Set. Intended to commemorate the 10th anniversary of the Platinum Eagle's 1997 launch, the set contained two half-ounce Platinum Eagles, one matching the 2007 proof strike from earlier in the year and the other carrying an enhanced reverse proof finish with the same design; this first offering of a reverse proof version of the Platinum Eagle followed the prior year's release of similar sets for the American Silver Eagle and American Gold Eagle's 20th anniversary. In addition to being accompanied by a certificate of authenticity, the coins were encased in a domed mahogany box designed to display the coins at an angle.
The set's release on December 13, 2007 at a price of $1,949.95 with a seven-day one-set-per-household limit was met with strong collector interest. First week sales reached 14,682 units half of the maximum ordered mintage of 30,000 units. However, due to fluctuations in the price of platinum, the Mint suspended sales on February 13, 2008, resumed sales about a month at $2,649.95. The increased price constituted a larger premium, around $635, above spot; the following months brought a decline in platinum's price below $1,000 per troy oz, precipitating further suspensions and a final price of $1,249.95. When sales were ended in December 31, 2008, over a year after its initial release, the Mint reported total sales of 19,583 units; the figures listed below are the final audited mintages from the U. S. include coins sold both individually and as part of multi-coin sets. Since 2009, only the $100 denomination has been offered. Bullion Platinum Eagles were not issued from 2009 to 2013. In 2015, due to an insufficient quantity of blanks, no bullion Platinum Eagles were issued.
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Sovereign (British coin)
The sovereign is a gold coin of the United Kingdom, with a nominal value of one pound sterling. Struck from 1817 until the present time, it was a circulating coin accepted in Britain and elsewhere in the world. In most recent years, it has borne the well-known design of Saint George and the Dragon on the reverse—the initials of the designer, Benedetto Pistrucci, may be seen to the right of the date; the coin was named after the English gold sovereign, last minted about 1603, originated as part of the Great Recoinage of 1816. Many in Parliament believed a one-pound coin should be issued rather than the 21-shilling guinea struck until that time; the Master of the Mint, William Wellesley Pole, had Pistrucci design the new coin, his depiction was used for other gold coins. The coin was unpopular as the public preferred the convenience of banknotes, but paper currency of value £1 was soon limited by law. With that competition gone, the sovereign not only became a popular circulating coin, but was used in international trade and in foreign lands, trusted as a coin containing a known quantity of gold.
The British government promoted the use of the sovereign as an aid to international trade, the Royal Mint took steps to see that lightweight gold coins were withdrawn from circulation. From the 1850s until 1932, the sovereign was struck at colonial mints in Australia, in Canada, South Africa and India—they have been struck again in India since 2013 for the local market; the sovereigns issued in Australia carried a unique local design, but by 1887, all new sovereigns bore Pistrucci's George and Dragon design. Strikings there were so large that by 1900, about 40 per cent of the sovereigns in Britain had been minted in Australia. With the start of the First World War in 1914, the sovereign vanished from circulation in Britain, replaced by paper money, it did not return after the war, though issues at colonial mints continued until 1932; the coin was still used in the Middle East, demand rose in the 1950s, which the Royal Mint responded to by striking new sovereigns in 1957. It has been struck since both as a bullion coin and, beginning in 1979, for collectors.
Though the sovereign is no longer in circulation, it is still legal tender in the United Kingdom. There had been an English coin known as the sovereign, first authorised by Henry VII in 1489, it had a diameter of 42 millimetres, weighed 15.55 grams, twice the weight of the existing gold coin, the ryal. The new coin was struck in response to a large influx of gold into Europe from West Africa in the 1480s, Henry at first called it the double ryal, but soon changed the name to sovereign. Too great in value to have any practical use in circulation, the original sovereign served as a presentation piece to be given to dignitaries; the English sovereign, the country's first coin to be valued at one pound, was struck by the monarchs of the 16th century, the size and fineness being altered. James I, when he came to the English throne in 1603, issued a sovereign in the year of his accession, but the following year, soon after he proclaimed himself King of Great Britain and Ireland, he issued a proclamation for a new twenty-shilling piece.
About ten per cent lighter than the final sovereigns, the new coin was called the unite, symbolising that James had merged the Scottish and English crowns. In the 1660s, following the Restoration of Charles II and the mechanisation of the Royal Mint that followed, a new twenty-shilling gold coin was issued, it had no special name at first but the public soon nicknamed it the guinea and this became the accepted term. Coins were at the time valued by their precious metal content, the price of gold relative to silver rose soon after the guinea's issuance. Thus, it came to trade at 21 shillings or sixpence more. Popular in commerce, the coin's value was set by the government at 21 shillings in silver in 1717, was subject to revision downward, though in practice this did not occur; the term sovereign, referring to a coin, fell from use—it does not appear in Samuel Johnson's dictionary, compiled in the 1750s. This economy was disrupted by the Napoleonic Wars, gold was hoarded. Among the measures taken to allow trade to continue was the issuance of one-pound banknotes.
The public came to like them as more convenient than the odd-value guinea. After the war, Parliament, by the Coinage Act 1816, placed Britain on the gold standard, with the pound to be defined as a given quantity of gold; every speaker supported having a coin valued at twenty shillings, rather than continuing to use the guinea. The Coinage Act did not specify which coins the Mint should strike. A committee of the Privy Council recommended gold coins of ten shillings, twenty shillings, two pounds and five pounds be issued, this was accepted by George, Prince Regent on 3 August 1816; the twenty-shilling piece was named a sovereign, with the resurrection of the old name promoted by antiquarians with numismatic interests. William Wellesley Pole, elder brother of the Duke of Wellington, was appointed Master of the Mint in 1812, with a mandate to reform the Royal Mint. Pole had favoured retaining the guinea, due to the number extant and the amount of labour required to replace them with sovereigns.
Formal instruction to the Mint came with an indenture dated February 1817, directing the Royal Mint to strike gold coins weighing 7.988 grams, to say, the new sovereign. The Italian sculptor Benedetto Pistrucci came to London early in 1816, his talent opened the doors of
Ruthenium
Ruthenium is a chemical element with symbol Ru and atomic number 44. It is a rare transition metal belonging to the platinum group of the periodic table. Like the other metals of the platinum group, ruthenium is inert to most other chemicals. Russian-born scientist of Baltic-German ancestry Karl Ernst Claus discovered the element in 1844 at Kazan State University and named it after the Latin name of his homeland, Ruthenia. Ruthenium is found as a minor component of platinum ores. Most ruthenium produced is used in thick-film resistors. A minor application for ruthenium is as a chemistry catalyst. A new application of ruthenium is as the capping layer for extreme ultraviolet photomasks. Ruthenium is found in ores with the other platinum group metals in the Ural Mountains and in North and South America. Small but commercially important quantities are found in pentlandite extracted from Sudbury, Ontario and in pyroxenite deposits in South Africa. Ruthenium, a polyvalent hard white metal, is a member of the platinum group and is in group 8 of the periodic table: Whereas all other group 8 elements have 2 electrons in the outermost shell, in ruthenium, the outermost shell has only one electron.
This anomaly is observed in the neighboring metals niobium and rhodium. Ruthenium does not tarnish unless subject to high temperatures. Ruthenium dissolves in fused alkalis to give ruthenates, is not attacked by acids but is attacked by halogens at high temperatures. Indeed, ruthenium is most attacked by oxidizing agents. Small amounts of ruthenium can increase the hardness of palladium; the corrosion resistance of titanium is increased markedly by the addition of a small amount of ruthenium. The metal can be plated by thermal decomposition. A ruthenium-molybdenum alloy is known to be superconductive at temperatures below 10.6 K. Ruthenium is the last of the 4d transition metals that can assume the group oxidation state +8, then it is less stable there than the heavier congener osmium: this is the first group from the left of the table where the second and third-row transition metals display notable differences in chemical behavior. Like iron but unlike osmium, ruthenium can form aqueous cations in its lower oxidation states of +2 and +3.
Ruthenium is the first in a downward trend in the melting and boiling points and atomization enthalpy in the 4d transition metals after the maximum seen at molybdenum, because the 4d subshell is more than half full and the electrons are contributing less to metallic bonding. Unlike the lighter congener iron, ruthenium is paramagnetic at room temperature, as iron is above its Curie point; the reduction potentials in acidic aqueous solution for some common ruthenium ions are shown below: Naturally occurring ruthenium is composed of seven stable isotopes. Additionally, 34 radioactive isotopes have been discovered. Of these radioisotopes, the most stable are 106Ru with a half-life of 373.59 days, 103Ru with a half-life of 39.26 days and 97Ru with a half-life of 2.9 days. Fifteen other radioisotopes have been characterized with atomic weights ranging from 89.93 u to 114.928 u. Most of these have half-lives that are less than five minutes except 105Ru; the primary decay mode before the most abundant isotope, 102Ru, is electron capture and the primary mode after is beta emission.
The primary decay product before 102Ru is the primary decay product after is rhodium. As the 74th most abundant element in Earth's crust, ruthenium is rare, found in about 100 parts per trillion; this element is found in ores with the other platinum group metals in the Ural Mountains and in North and South America. Small but commercially important quantities are found in pentlandite extracted from Sudbury, Canada, in pyroxenite deposits in South Africa; the native form of ruthenium is a rare mineral. 12 tonnes of ruthenium are mined each year with world reserves estimated at 5,000 tonnes. The composition of the mined platinum group metal mixtures varies depending on the geochemical formation. For example, the PGMs mined in South Africa contain on average 11% ruthenium while the PGMs mined in the former USSR contain only 2%. Ruthenium and iridium are considered the minor platinum group metals. Ruthenium, like the other platinum group metals, is obtained commercially as a by-product from nickel, copper, platinum metals ore processing.
During electrorefining of copper and nickel, noble metals such as silver and the platinum group metals precipitate as anode mud, the feedstock for the extraction. The metals are converted to ionized solutes by any of several methods, depending on the composition of the feedstock. One representative method is fusion with sodium peroxide followed by dissolution in aqua regia, solution in a mixture of chlorine with hydrochloric acid. Osmium, ruthenium and iridium are insoluble in aqua regia and precipitate, leaving the other metals in solution. Rhodium is separated from the residue by treatment with molten sodium bisulfate; the insoluble residue, containing
Gold coin
A gold coin is a coin, made or of gold. Most gold coins minted since 1800 are 90–92% gold, while most of today's gold bullion coins are pure gold, such as the Britannia, Canadian Maple Leaf, American Buffalo. Alloyed gold coins, like the American Gold Eagle and South African Krugerrand, are 91.7% gold by weight, with the remainder being silver and copper. Traditionally, gold coins have been circulation coins, including coin-like dinars. Since recent decades, gold coins are produced as bullion coins to investors and as commemorative coins to collectors. While modern gold coins are legal tender, they are not observed in everyday financial transactions, as the metal value exceeds the nominal value. For example, the American Gold Eagle, given a denomination of 50 USD, has a metal value of more than $1,200 USD; the gold reserves of central banks are dominated by gold bars, but gold coins may contribute. Gold has been used as money for many reasons, it is fungible, with a low spread between the prices to sell.
Gold is easily transportable, as it has a high value to weight ratio, compared to other commodities, such as silver. Gold can be re-coined, divided into smaller units, or re-melted into larger units such as gold bars, without destroying its metal value; the density of gold is higher than most other metals. Additionally, gold is unreactive, hence it does not tarnish or corrode over time. Gold was used in commerce in the Ancient Near East since the Bronze Age, but coins proper originated much during the 6th century BC, in Anatolia; the name of king Croesus of Lydia remains associated with the invention. In 546 BC, Croesus was captured by the Persians; the most valuable of all Persian minted coinage still remains the gold drams, minted in 1 AD as a gift by the Persian King Vonones Hebrew Bible new testament. Ancient Greek coinage contained a number of gold coins issued by the various city states; the Ying yuan is an early gold coin minted in ancient China. The oldest ones known are from about the 5th or 6th century BC.
Larger units such as the various talent measures were used for high value exchanges. The German gold mark was introduced in 1873 in the German Empire, replacing the various local Gulden coins of the Holy Roman Empire. Gold coins had a long period as a primary form of money, only falling into disuse in the early 20th century. Most of the world stopped making gold coins as currency by 1933, as countries switched from the gold standard due to hoarding during the worldwide economic crisis of the Great Depression. In the United States, 1933's Executive Order 6102 forbade the hoarding of gold and was followed by a devaluation of the dollar relative to gold, although the United States did not uncouple the dollar from the value of gold until 1971. Gold-colored coins have made a comeback in many currencies. However, "gold coin" always refers to a coin, made of gold, does not include coins made of manganese brass or other alloys. Furthermore, many countries continue to make legal tender gold coins, but these are meant for collectors and investment purposes and are not meant for circulation.
Many factors determine the value of a gold coin, such as its rarity, age and the number minted. Most gold coins minted since the late 19th century are worth more than spot price, but many are worth more. Gold coins coveted by collectors include the Aureus and Spur Ryal. In July 2002, a rare $20 1933 Double Eagle gold coin sold for a record $7,590,020 at Sotheby's, making it by far the most valuable coin sold up to that time. In early 1933, more than 445,000 Double Eagle coins were struck by the U. S. Mint, but most of these were surrendered and melted down following Executive Order 6102. Only a few coins survived. In 2007 the Royal Canadian Mint produced a 100 kilograms gold coin with a face value of $1,000,000, though the gold content was worth over $2 million at the time, it is 3 centimetres thick. It was intended as a one-off to promote a new line of Canadian Gold Maple Leaf coins, but after several interested buyers came forward the mint announced it would manufacture them as ordered and sell them for between $2.5 million and $3 million.
As of May 3, 2007, there were five orders. One of these coins has been stolen. Austria had produced a 37 centimetres diameter 31 kg Philharmonic gold coin with a face value of €100,000. On October 4, 2007, David Albanese stated that a $10, 1804-dated eagle coin was sold to an anonymous private collector for $5 million. In 2012 the Royal Canadian Mint produced the world first gold coin with a 0.11–0.14ct diamond. The Queen’s Diamond Jubilee coin has been crafted in 99.999% pure gold with a face value of $300. Precious metals in bulk form are known as bullion, are traded on commodity markets. Bullion metals may be minted into coins; the defining attribute of bullion is that it is valued by its mass and purity rather than by a face value as money. While obsolete gold coins are collected for their numismatic value, gold bull
Store of value
A store of value is the function of an asset that can be saved and exchanged at a time, be predictably useful when retrieved. More a store of value is anything that retains purchasing power into the future; the most common store of value in modern times has been money, currency, or a commodity like a precious metal or financial capital. The point of any store of value is risk management due to a stable demand for the underlying asset. Money is one of the best stores of value because of its liquidity, that is, it can be exchanged for other goods and services. An individual's wealth is the total of all stores of value including both monetary and nonmonetary assets. Monetary economics is the branch of economics. Storage of value is one of the three accepted functions of money; the other functions are the medium of exchange, used as an intermediary to avoid the inconveniences of the coincidence of wants, the unit of account, which allows the value of various goods, services and liabilities to be rendered in multiples of the same unit.
Money is well-suited to storing value because of its purchasing power. It is useful because of its durability; because of its function as a store of value, large quantities of money are hoarded. Money's usefulness as a store of value declines if there are significant changes in the general level of prices. So if inflation rises, purchasing power declines and a cost is placed on those holding money. Workers who are paid in a currency, experiencing high-inflation will prefer to spend their income instead of saving it; when a currency loses its store of value, or more when a currency is perceived to lose its future purchasing power, it fails to function as money. This causes people to use currencies from other countries as a substitute. According to the Cambridge cash-balance theory, represented by the Cambridge equation, money's ability to store value is more important than its function as a medium of exchange. Cambridge claims; this is contrary to Fisher economists' belief that demand arises because money is needed for exchange.
Examples for stores of value other than money are: Bonds - value is guaranteed by a legal contract Collectibles, e.g. original art by a famous artist or antiques such as ancient artifacts or ancient coinage Gemstones Gift economy relationships – value is stored as social reputation Labor notes Livestock ownership and control Fine wine Precious metals – ownership in gold, silver and palladium Real estate – ownership in actual deeds in protectable controllable land Stored-value cards – value is physically stored on the cards in the form of binary coded dataWhile these items may be inconvenient to trade daily or store, may vary in value quite they lose all value. It need not be a capital asset at all have economic value, not known to disappear in the worst situation; the disadvantage for land and property as a store for value is that it may take time to find a buyer for those assets. In principle, this could be true of any industrial commodity, but gold and precious metals are favored, because of their demand and rarity in nature, which reduces the risk of devaluation associated with increased production and supply.
Insofar as an investment is speculative, it should not be considered a store of value because it lacks stability. An asset should only be considered a store of value. At various times throughout history and nations have famously made the mistake of believing that they could "store value" in speculative instruments, misunderstanding that ones personal choice to invest in a speculative asset does not automatically convert that asset into a proper and predictable store of value. Examples of assets that are not traditionally considered stores of value: Stocks – A share of ownership of a publicly-traded company Cryptocurrencies – digital currencies Wiens, Elmer G.. "Linguistic and Commodity Exchanges". First Nations Studies. Examines the structural differences between barter and monetary commodity exchanges and oral and written linguistic exchanges
Rhodium
Rhodium is a chemical element with symbol Rh and atomic number 45. It is a rare, silvery-white, corrosion-resistant, chemically inert transition metal, it is a member of the platinum group. It has only one occurring isotope, 103Rh. Occurring rhodium is found as the free metal, alloyed with similar metals, as a chemical compound in minerals such as bowieite and rhodplumsite, it is one of most valuable precious metals. Rhodium is found in platinum or nickel ores together with the other members of the platinum group metals, it was discovered in 1803 by William Hyde Wollaston in one such ore, named for the rose color of one of its chlorine compounds, produced after it reacted with the powerful acid mixture aqua regia. The element's major use is as one of the catalysts in the three-way catalytic converters in automobiles; because rhodium metal is inert against corrosion and most aggressive chemicals, because of its rarity, rhodium is alloyed with platinum or palladium and applied in high-temperature and corrosion-resistive coatings.
White gold is plated with a thin rhodium layer to improve its appearance while sterling silver is rhodium-plated for tarnish resistance. Rhodium detectors are used in nuclear reactors to measure the neutron flux level. Rhodium was discovered in 1803 by William Hyde Wollaston, soon after his discovery of palladium, he used crude platinum ore obtained from South America. His procedure involved dissolving the ore in aqua regia and neutralizing the acid with sodium hydroxide, he precipitated the platinum as ammonium chloroplatinate by adding ammonium chloride. Most other metals like copper, lead and rhodium were precipitated with zinc. Diluted nitric acid dissolved all but rhodium. Of these, palladium dissolved in aqua regia but rhodium did not, the rhodium was precipitated by the addition of sodium chloride as Na3·nH2O. After being washed with ethanol, the rose-red precipitate was reacted with zinc, which displaced the rhodium in the ionic compound and thereby released the rhodium as free metal. After the discovery, the rare element had only minor applications.
The first major application was electroplating for decorative uses and as corrosion-resistant coating. The introduction of the three-way catalytic converter by Volvo in 1976 increased the demand for rhodium; the previous catalytic converters used platinum or palladium, while the three-way catalytic converter used rhodium to reduce the amount of NOx in the exhaust. Rhodium is a hard, durable metal that has a high reflectance. Rhodium metal does not form an oxide when heated. Oxygen is absorbed from the atmosphere only at the melting point of rhodium, but is released on solidification. Rhodium has both lower density than platinum, it is not attacked by most acids: it is insoluble in nitric acid and dissolves in aqua regia. Rhodium belongs to group 9 of the periodic table, but the configuration of electrons in the outermost shells is atypical for the group; this anomaly is observed in the neighboring elements, niobium and palladium. The common oxidation state of rhodium is +3, but oxidation states from 0 to +6 are observed.
Unlike ruthenium and osmium, rhodium forms no volatile oxygen compounds. The known stable oxides include Rh2O3, RhO2, RhO2·xH2O, Na2RhO3, Sr3LiRhO6 and Sr3NaRhO6. Halogen compounds are known in nearly the full range of possible oxidation states. Rhodium chloride, rhodium fluoride, rhodium fluoride and rhodium fluoride are examples; the lower oxidation states are stable only in the presence of ligands. The best-known rhodium-halogen compound is the Wilkinson's catalyst chlorotrisrhodium; this catalyst is used in the hydrogenation of alkenes. Occurring rhodium is composed of only one isotope, 103Rh; the most stable radioisotopes are 101Rh with a half-life of 3.3 years, 102Rh with a half-life of 207 days, 102mRh with a half-life of 2.9 years, 99Rh with a half-life of 16.1 days. Twenty other radioisotopes have been characterized with atomic weights ranging from 92.926 u to 116.925 u. Most of these have half-lives shorter except 100Rh and 105Rh. Rhodium has numerous meta states, the most stable being 102mRh with a half-life of about 2.9 years and 101mRh with a half-life of 4.34 days.
In isotopes weighing less than 103, the primary decay mode is electron capture and the primary decay product is ruthenium. In isotopes greater than 103, the primary decay mode is beta emission and the primary product is palladium. Rhodium is one of the rarest elements in the Earth's crust, comprising an estimated 0.0002 parts per million. Its rarity affects its use in commercial applications; the industrial extraction of rhodium is complex because the ores are mixed with other metals such as palladium, silver and gold and there are few rhodium-bearing minerals. It is found in platinum ores and extracted as a white inert metal, difficult to fuse. Principal sources are located in South Africa. Although the quantity at Sudbury is small, the large amount of processed nickel ore makes rhodium recovery cost-effective; the main exporter of rhodium is South
Value (economics)
Economic value is a measure of the benefit provided by a good or service to an economic agent. It is measured relative to units of currency, the interpretation is therefore "what is the maximum amount of money a specific actor is willing and able to pay for the good or service"? Among the competing schools of economic theory there are differing theories of value. Economic value is not the same as market price, nor is economic value the same thing as market value. If a consumer is willing to buy a good, it implies that the customer places a higher value on the good than the market price; the difference between the value to the consumer and the market price is called "consumer surplus". It is easy to see situations where the actual value is larger than the market price: purchase of drinking water is one example; the economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, extend that definition to goods which can be exchanged.
From this analysis came the concepts value in value in exchange. Value is linked to price through the mechanism of exchange; when an economist observes an exchange, two important value functions are revealed: those of the buyer and seller. Just as the buyer reveals what he is willing to pay for a certain amount of a good, so too does the seller reveal what it costs him to give up the good. Additional information about market value is obtained by the rate at which transactions occur, telling observers the extent to which the purchase of the good has value over time. Said another way, value is how much a desired object or condition is worth relative to other objects or conditions. Economic values are expressed as "how much" of one desirable condition or commodity will, or would be given up in exchange for some other desired condition or commodity. Among the competing schools of economic theory there are differing metrics for value assessment and the metrics are the subject of a theory of value.
Value theories are a large part of the differences and disagreements between the various schools of economic theory. In neoclassical economics, the value of an object or service is seen as nothing but the price it would bring in an open and competitive market; this is determined by the demand for the object relative to supply in a competitive market. Many neoclassical economic theories equate the value of a commodity with its price, whether the market is competitive or not; as such, everything is seen as a commodity and if there is no market to set a price there is no economic value. In classical economics, the value of an object or condition is the amount of discomfort/labor saved through the consumption or use of an object or condition. Though exchange value is recognized, economic value is not, in theory, dependent on the existence of a market and price and value are not seen as equal; this is complicated, however, by the efforts of classical economists to connect price and labor value. Karl Marx, for one, saw exchange value as the "form of appearance" of value, which implies that, although value is separate from exchange value, it is meaningless without the act of exchange, i.e. without a market.
In this tradition, Steve Keen makes the claim that "value" refers to "the innate worth of a commodity, which determines the normal ratio at which two commodities exchange." To Keen and the tradition of David Ricardo, this corresponds to the classical concept of long-run cost-determined prices, what Adam Smith called "natural prices" and Karl Marx called "prices of production." It is part of a cost-of-production theory of price. Ricardo, but not Keen, used a "labor theory of price" in which a commodity's "innate worth" was the amount of labor needed to produce it. "The value of a thing in any given time and place", according to Henry George, "is the largest amount of exertion that anyone will render in exchange for it. But as men always seek to gratify their desires with the least exertion this is the lowest amount for which a similar thing can otherwise be obtained."In another classical tradition, Marx distinguished between the "value in use", labor cost which he calls "value", "exchange value".
By most interpretations of his labor theory of value, like Ricardo, developed a "labor theory of price" where the point of analyzing value was to allow the calculation of relative prices. Others see values as part of his sociopolitical interpretation and critique of capitalism and other societies, deny that it was intended to serve as a category of economics. According to a third interpretation, Marx aimed for a theory of the dynamics of price formation, but did not complete it. In 1860, John Ruskin published a critique of the economic concept of value from a moral point of view, he entitled the volume Unto This Last, his central point was this: "It is impossible to conclude, of any given mass of acquired wealth by the fact of its existence, whether it signifies good or evil to the nation in the midst of which it exists. Its real value depends on the moral sign attached to it, just as as that of a mathematical quantity depends on the algebraic sign attached to it. Any given accumulation of commercial wealth may be indicative, on the one hand, of faithful industries, progressive energies, productive ingenuities: or, on the other, it may be indicative of mortal luxury, merciless tyranny, ruinous chicanery."
Gandhi was inspired by Ruskin's book and published a paraphrase of it in 1908. Economists su
