The Price of Everything

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28 Responses to “The Price of Everything”

  1. Comedian says:

    Mr. Porter must be one powerful cynic, having written an entire book titled after an Oliver Wilde quote–

    “The cynic knows the price of everything and the value of nothing.”

  2. Anonymous says:

    Imagine my surprise when the subject I was going to bring up in the thread was actually semi-addressed in the exerpt itself. I’ve for a long time been intrigued by the relative price stability of a) cocaine and b) weed. The price of both has remained the same since I was a teenager. Not that I was doing coke as a 13 year old, but I knew a lot of people then who did. A gram is still $100. And a 1/4 ounce of dope is still (approx) 30 bucks (with caveats, of course: sometimes it’s crappy weed, sometimes it’s awesome. And obviously, one can expect to pay hundreds of dollars per quarter for SOME stuff). But I’m still flummoxed over the fact that these prices have been more or less stable during my entire adult lifetime (I’m 45 now). 30 years of price stability? WHAT GIVES???

    Not that I’m complaining :)

  3. adan-nada says:

    Just from the introduction, I’m wondering whether the book is worth reading at all if you’ve other pop economics books.

    Putting aside the issue as to whether price=value, or whether the price is an accurate reflection of the societal cost (something progressive economists have been arguing for), this book seems to just put the proposition that (1) everything has a price/cost, and (2) people make cost/benefit analysis when making choices.

    Isn’t that the whole point of the Freakonomics books? What’s new here?

  4. Anonymous says:

    “The price of garbage provides a guide to civilization. ”

    I like indexing civilization to an economic factor, much more reliable than the old fashioned morality things like how you treat others or stuff like that – and much less likely to make us look barbaric or feel uncomfortable about ourselves.

  5. super_fuzz says:

    Economics was one course I had to take in college that I found I really enjoyed because I found it applies to everything with opportunity costs. Thinking I’d hate it going in turned into loving it getting out of the course.

    On the original green text/ black background page: I personally didn’t have any trouble reading the green text on the black background, but I also was the kid who never cleaned his glasses growing up and could see fine through gunky glasses. So, together the interest in the subject and my high threshold for noise/distraction means you could have done it in blinking comic sans and I’d probably gotten through it – thats an idea for a future feature: readability of text. At what point is text so bad that it stops being text and is art at best or incomprehensible on any level at worst.

  6. Ugly Canuck says:

    AH, the price is one thing, but the bill is something else again. Something of a reckoning, actually…a matter for a poet.

    And so, for your consideration, a poem:

    The Reckoning by Robert William Service

    It’s fine to have a blow-out in a fancy restaurant,
    With terrapin and canvas-back and all the wine you want;
    To enjoy the flowers and music, watch the pretty women pass,
    Smoke a choice cigar, and sip the wealthy water in your glass.
    It’s bully in a high-toned joint to eat and drink your fill,
    But it’s quite another matter when you

    Pay the bill.

    It’s great to go out every night on fun or pleasure bent;
    To wear your glad rags always and to never save a cent;
    To drift along regardless, have a good time every trip;
    To hit the high spots sometimes, and to let your chances slip;
    To know you’re acting foolish, yet to go on fooling still,
    Till Nature calls a show-down, and you

    Pay the bill.

    Time has got a little bill — get wise while yet you may,
    For the debit side’s increasing in a most alarming way;
    The things you had no right to do, the things you should have done,
    They’re all put down; it’s up to you to pay for every one.
    So eat, drink and be merry, have a good time if you will,
    But God help you when the time comes, and you

    Foot the bill.

  7. inkadinka12 says:

    Worst posting EVER. Seems like you really don’t want people to read it given the horrible colors and the inability to comment.

  8. Anonymous says:

    The physical book can be bought for less than the price of the Kindle edition. It can then be sold when done reading it reducing the net cost of the physical edition even further. Of course, that requires clear cutting forests, mulching & bleaching paper, strip mining to make toxic inks and invading 3rd world countries for oil for shipping.

    So the artificially high price of the Kindle edition helps fund war, terrorism, destruction of the environment and all the murder that that entails.

    I hope you’re happy with the price of the Kindle edition and what the results of that choice.

  9. MilliePlateaux says:

    I hope the formatting is bad on this because it keeps loading to some external? site (but boing boing?) that has neon glowy lime green letters on a black background. This makes my eyes crazy with after-image feedback so that I cannot even see the letters. Then you have to trick the page to get *here* to leave a message. Hopefully this is a bug and not someone’s idea of “cool TRON design” ugh.

  10. Astragali says:

    I ended up copying the text into MS Word to be able to read it without going nuts. As for “tricking” the page… I eventually worked out that I should just click the stop button on the browser – though you have to get the timing just right.

    Anyway, onto article-relevant content: Were cities in Europe really constrained by history? King Louis XVI took a long time to flee, but the man was prone to indecision and depression. Hardly a worthy subject for comparison.

    I’m more inclined to suspect (though, as always, I’m happy to be proven incorrect) that although cost played a part, space would have been at least an equal factor. According to Wikipedia, you could fit the whole of Europe’s area into the present-day United States, and there are far more countries within Europe (and more territories still in 1791). While it’s true to state that the size of the American territory in the same year was only about a third of the present-day landmass, it’s still bigger than any single country within the Old World. And the Americans were forging across their territory with (probably) similar technology.

    The people didn’t have the room to manouevre that the Americans did, relative to the population at the time.

    • Yamara says:

      The arguments seem to pretend to a coherence around price being the center of the human universe, but it’s really as you say, Astragali, space is the major factor in nations and their economies. I would stress that time is the major factor affecting the decisions of individuals: The speed of immigrating one’s children, the time spent driving to work, hourly wages or weekly salaries.

      Space and time. That is to say, opportunity. Saying these scenarios are about “price” seems an attempt to disguise that.

      Porter mentioned Nixon’s War on Drugs, but doesn’t seem to have thought Nixon’s price controls worth mentioning as relevant in his intro. They failed–failed infamously, except that no one in major media brings them up any more.

      Price is usually arbitrary but discoverable. That’s what a marketplace is. Opportunity is usually available but either disguised–or withheld. That’s what vested interests do.

      Withheld opportunities are what’s plaguing the world economy today.

      • nate_freewheel says:

        It really is just a lens that we can use to examine economics. No single lens can provide a truly informed perspective. Take this for what it is– a fascinating perspective on global econ.

  11. Anonymous says:

    Combine this with ‘Predictably Irrational’ and you have some required reading for every human being living in the commercial world.

    I’ll be adding this to my order list!

  12. cenoxo says:

    Capitalism: where everything is permitted, but nothing is free.
    Communism: where everything is free, but nothing is permitted.

  13. scottfree says:

    Mr. Porter has never heard the wolf cry to the blue horn moon or asked the grinning bobcat why he grins, I can tell.

    In the first place, it’s remarkable to me that the ‘price of everything’ is discussed as though it represents some amazing development in human history. That every thing>/> has a price, or if it doesn’t will, is absolutely true, however consider what needed to happen for that state of things to come about: in the 17th century, every thing did not have a price, it was possible for peasents to have a level of self-sufficiency through generating subsistence from land owned by no one, thus preserving a portion of their life for something other than earning and spending. Don’t get me wrong, I would never trade my PS2 for the life of a peasent, but it bears reflecting on that the ‘price of everything’ is contingent in the first place on the alienation of regular people from what they need to survive, meaning if one prefers to live another day, one must work some crap job, or more precisely, sell one’s time and labour-power to whoever is gracious enough to buy it.

    So, forgive me, Mr. Porter, your argument that all things have prices is correct, but I think you’re a bad person for making a virtue out of barbaric necessity. Not that I imagine you care.

    Additionally, despite this big book you’ve written about it, you don’t seem to know what a ‘price’ actually is, as demonstrated by your exploitation of a linguistic coincidence: that ‘cost’ or ‘price’ can mean both ‘amount of money needed to exchange for something’, when talking about a commodity and ‘consequence(s)’ when talking about an action. These are not the same thing. The most fundamental feature of price is that it sets things up as equivalents. It means one can compare apples and oranges, if one wants to: apples are €1.50 per kilo, say, and oranges are €2.00 per kilo. Apples are cheaper. One can compare space shuttles to aquaducts to cakes to unicycles. All of these are very different things, but because they have a price, they have a basis of equivalence: a unicycle is worth maybe 20 cakes. But when I make a decision, the consequences of either choice are not equivalent. If I choose between going on a date with an attractive woman or going skiing, I cannot say ‘Eight dates with an attractive woman are worth one ski holiday’. That’s absurd. The consequences of each choice are not only unpredictable but incomperable, because they lack the notion of equivalence.

    Additionally, if you think a poor Indian child rummaging through a rubbish tip for a bite to eat represents a choice, then, Mr. Porter, I don’t know what to say. You think she should have studied harder in school maybe? The contradiction stares you in the face and you ignore it. She goes to the rubbish tip because she has no other choice, just as none of us have a choice whether or not to sell our labour. Death or life is not a choice.

    Please allow me, however, to compliment you on your writing style. Let’s not mince words: it’s a very boring subject. And yet one seems to be able to read your work without too much bother. It’s written as though to be read by complete idiots and yet somehow that makes me feel flattered rather than patronised. All the more pity then, that your argument is wrong.

    • imag says:

      Thank you, scottfree, for pointing out what needed to be pointed out.

      The reduction of the world to prices is not new. It’s affect is also not new; it makes people unhappy.

      This kind of thinking also leads to the presumption that price = value, a presumption which can be horribly wrong. This kind of thinking is what leads an investment banker to buy up a company like Mervyns, sell off all the stores and property which Mervyns had built up over the years to a created company, then lease Mervyns its own property at outrageous rates, sucking over 50 years of accrued value out of the company. 50 years worth of internal investment and capability and employees were sucked out in a matter of years – and I’m sure the investment bankers said they were creating value. The problem is, before them we had a functioning store with employees and capability and future potential for profits. After them, they had a one-time cash fix. Their business model is to use the cash to buy and clean out new companies. It’s sick thinking, and it’s bringing down our whole economy.

      Here’s a homework assignment for the author. Try reading The Gift http://www.powells.com/biblio/7-9780307279507-3. It’s about the gift culture: it’s history, it’s separation from money culture, it’s connection with with art and interpersonal connection. There are things which can’t be bought, because if they are, it changes them. Try some non Wall Street thinking on for size and see what you think. Come join us in the real world.

      There is no appropriate price for your appreciation of a leaf, or of your wife’s laughter. The fact that you can find a way to experimentally put a price on those things doesn’t make that price any more valid than any number of other forced cost/benefit decisions your brain can make, and for the most part, the cost/benefit approach is not how we make the vast majority of our decisions. Reading up on neural network theory might help there.

      Or perhaps I’ve somehow gotten this all wrong from your article. Apologies if so.

    • bkad says:

      I think I understand what you’re saying Scott, about comparing non-equivalent consequences of decisions being nonsensical, but I disagree. Everything we do involves resource allocation decisions (whether those resources are time, money, youth, physical labor, etc.). Allocating those resources is a transaction — even if no goods or services are involved — and can be associated with a price. The consequences of dating vs skiing are not as transparently comparable as apples and oranges, but we can design a metric that makes them comparable. Economics is human decision making, and humans can choose how to assign value.

      Skiing and dating are certainly different activities, but I can imagine benefits to each, and costs in time and money. I could define a weighting function. Use probability theory to assign values to uncertain payoffs and costs. I could arrive at final numbers. Would I have anticipated all consequences? Probably not. But I’m likely to do better in the decision making than if I hadn’t tried to assign a ‘price’ (in hours and dollars).

      Of course, who cares about my decision so ski or date? But pricing abstract decisions matters a great deal on a state/government level. How do you compare initiatives? How do you allocate limited government resources? How do you balance costs of legislation (be they direct costs in taxes, indirect economic impacts, or abstract limitations on freedoms) with benefits? You can assign a price.

      We have to be able to do this (how can you make responsible decisions without numbers?). It is unpleasant, though, because at some point you/the government has to be the hard-ass that says, “according to this mathematical formula we came up with, it is not a good use of resources to save your kid’s life”. Which governments and voters already do, to say nothing of doctors, insurance companies, and triage nurses. But most of us feel more comfortable not thinking about how we put prices on our neighbors’ lives, education, and health.

      • scottfree says:

        Thank you, bkad, for your response, and it’s a gracious person indeed who is so curteous on the internet.

        I’m glad also that you appreciate my point about the barbarity of this world where life itself has a price and decisions are made every minute of every day as to whether someone will live or die based on their ability to generate wealth for someone else. I absolutely agree we all feel more comfortable not thinking about it, but it wasn’t me who brought it up, and I hope you share my conviction that this is not necessary and it is the task of humanity to discover how to abolish these conditions. At any rate, it is the ‘game’ I hate, not the ‘playa’.

        Even if you do not share this conviction, I think we agree that markets have pervaded our lives in advanced industrial societies (one can even say ‘post-industrial’ these days) to a scarcely credible extent. But I wonder, is it as total as you say? We are skimming the edges of a philosophical debate, which we will do well do avoid. You say:

        Skiing and dating are certainly different activities, but I can imagine benefits to each, and costs in time and money. I could define a weighting function. Use probability theory to assign values to uncertain payoffs and costs. I could arrive at final numbers. Would I have anticipated all consequences? Probably not. But I’m likely to do better in the decision making than if I hadn’t tried to assign a ‘price’ (in hours and dollars).

        I find this tautological. I would summarise your argument:’If one uses the conservation of dollars and hours as the criteria of one’s decisions (through various models) than one is likely to make decisions which conserve dollars and hours’. But I do not go on dates or go skiing in order to conserve hours and dollars, I go on dates and go skiing to have fun, which is irreducible to hours and dollars, or even particularly quantifiable.

        The condition of something entering the market and receiving the princely title ‘price’ is its commensurability with all the other things on the market. Virtually all items of consumption and utility are found only on the market. As a result, the business of going about life itself will tend to be mediated by the market. But I insist, being mediated by is not the same as reducible to!

        I would argue that one sets about life on a quest to experience pleasure, or at least, avoid pain. One learns very early on that money provides access to articles useful for this quest. But again, access to a thing is not identical to the thing itself, and that the thing itself is again separate from the enjoyment of it. Your theory is based on obscuring each of these distinctions, and it is the clarity of these distinctions which allows me to make decisions about how to enjoy life best.

        Well, that may seem overly philosophical, but you ask ‘how do we make responsible decisions without numbers?’ and you know, maybe I’m old fashioned, but there’s this body of knowledge about precisely the answer to this question: it’s called ‘ethics’.

        You bring up the usefullness of your theory for governments, but that is not relevant: what governments set out to do — govern, order, manage — is very different from what a person sets out to do — enjoy life.

        Anyway, we’ll have to meet again sometime, and see who’s won at life.
        x

        • AnthonyC says:

          “But I do not go on dates or go skiing in order to conserve hours and dollars, I go on dates and go skiing to have fun, which is irreducible to hours and dollars, or even particularly quantifiable.”

          You can’t assign a number to fun, but you do have a sense of which of two options will provide you with more fun. Moreover, you have a sense of how much money and time you are willing to spend in order to have that much fun. For $50 I can have a nice dinner, go to the movies, and have drinks with some friends for an evening. This costs $50 and ~6 hours. Or I can buy a new PS3 RPG for $50, and spend about 50 hours playing it. It cannot do both using the same dollars or hours. The price exists, even if it is hidden.

          • scottfree says:

            AnthonyC,

            What fun you must be, running around with your TI-89 in hand, constantly making calculations. Do not be too proud of this technological model you’ve constructed; the ability to construct complex decision making models is insignificant next to the power of the mind to enjoy what it is not meant to and not enjoy what it is.

            Please understand what I argue price is: in order to have a price, something must be commensurable to all other things that have a price. In this sense, yes, 10 beers at a bar (at $5 each) are worth 1 video game (at $50). But one never knows how much one will enjoy those things. One can only say that the ‘price’, meaning approximately ‘how one feels about it later’, of one’s actions is hidden in the sense that it is unknowable until after the action. ‘Present mirth hath present laughter/ What’s to come is still unsure.’

            Consider cheese cake. You are at a coffee shop which sells cheese cake for $2 a slice. You buy a slice. It is delicious. You buy another. It is delicious. You buy another. It is still delicious. You buy another. It is still delicious but you vom. The last slice cost the same as the first and yet you do not enjoy it at all, which is also to say, from a certain point of view, $8 worth of cheese cake is less enjoyable than $6 worth. No matter how many people there are, there is always a point where more cheese cake is less enjoyable. This was sometime a paradox but now the argument gives it proof: price is a measure of something other than the enjoyability of the thing it describes or more relevant to the discussion, the use of a thing is qualitatively different from and incomparable to the price of a thing.

            Now, according to some thinkers, there is an exception to this, and these exceptions are more and more prevalent in the domain of cultural commodities. Often when buying cultural commodities, lacking any criteria for aesthetic appreciation (the enjoyment of culture), the purchaser will assume that the more expensive cultural commodity is the better. In this case, the price is actually performative of the enjoyability. It goes for classical concerts, fine wine, visual art &c. and it really is a remarkable phenomenon. Under those circumstances, there is a relationship between the price of something and its enjoyability, and your models apply, but as a society, we would tend to regard that sort of thing as really rather vulgar and uncouth.

    • Anonymous says:

      >> If I choose between going on a date with an attractive woman or going skiing, I cannot say ‘Eight dates with an attractive woman are worth one ski holiday’. That’s absurd.

      When you choose between the two, you put relative values on them. You price them. Presumably you’d rather have both, but that’s not the choice you are being offered.

      In this way, India chooses a society in which little girls work as rag pickers over one where they are ground up to become fertilizer. Presumably, they would prefer a society where neither happens, but they choose withing real world constraints of their resources.

      In the Western world we too have to chose between unpalatable choices given our constraints. We can either have (for example) lower drug use, or a low prison population. It’s not my personal pick, but through some complex mechanism, our society has priced these two options and picked one.

      Fortunately, as time passes those constraints change and societies have better and better options to pick from. We can all hope that the rag picker’s great granddaughter gets to choose between a ski vacation and an eight date hottie some day.

    • pepe4 says:

      Absolutely brilliant, well said … I couldn’t help this gnawing feeling inside when I first heard the title of the book and then subsequently hearing Mr. Porter on NPR and Bloomberg presenting his work … my gut asked: what do you mean by ‘The Price of Everything’? Oh, I see, it’s because the millions of little girls and boys digging through Larry’s toxic waste don’t have enough greenbacks to pay someone else to do it for them … slow me, guess I skipped Econ 101 :))

  14. Mark Frauenfelder says:

    Sorry folks. I am trying to fix the problem.

  15. Anonymous says:

    “The five cents I could get for an empty PET bottle at the supermarket’s recycling kiosk are not worth the trouble of redeeming it.”

    Odd stance this. And one taken by many people. We, in the Western world, have a serious problem when we are prepared to pay a price for something that has significant consequences. All well and good to pontificate on a blog regarding ‘price’ and ‘cost’ but, based upon this ‘throwaway’ comment in the article I would have to assume that any intent or attempt at hipster greenness and integrity through commenting upon this subject flies out of the window. Similarly, the PET bottle. Rather sad approach to how many live their lives.

    • AnthonyC says:

      The alternative to bringing my bottles to the grocery store is not littering, or sending them to the landfill. It’s using my town’s curbside recycling program. They still get recycled, I just don’t get my nickels. Oh, except that lots of recyclables get collected curbside which don’t have deposits I can redeem them for at the grocery store.

  16. MrJM says:

    Thanks for fixing the formatting. I was coming back to post a complaint (I know — who gives a shit?) but saw that it had been remedied.

    So may I humbly suggest that you bump this item back to the top to give folks a second bite at this tasty apple?

    Thanks again for the fix!

  17. mathdemon says:

    Something’s gone bad with the whole layout. (And green on black? No, no, no!) If you wanna know how I managed to comment, send a buck to AAAAAAAAAAAARRRRrrrrrrrrrgggghhhhhhhhhh…….

  18. Anonymous says:

    I feel sad that any previous error in formatting stopped people from reading this article. It is REALLY REALLY INTERESTING! The page looks fine to me and the points it raises about how COST drives BEHAVIOUR is really food for thought!
    Thank you for posting this!!

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