A PCT view of money

3. The Value of Money

Money has value, but only in the context of the goods and services for which it can be traded. The physical manifestation of money may be coin or pieces of paper. They have value, too, but the value of a physical manifestation is independent of the value of the money it represents. A coin, for example, may be used to enhance a piece of jewellery or to hold down some paper against a mild breeze; varicolored paper money may be used as wallpaper. But a “dollar” has no intrinsic value. Just as the value of a piece of steak to Bill the butcher is lower than it is to hungry Sam the hairdresser, so the value of a dollar to a millionaire is usually less than it is to someone on welfare.

This last statement is not always true. If the millionaire has almost enough money to be able to trade for some goods or services, each extra dollar might be very valuable. Without it, the millionaire is unable to do or get something he wants very much; with it, he can satisfy this great desire. To get the necessary dollar, the millionaire might trade something that under normal circumstances would seem to be of great value. The dollar at that moment has this great value, but usually it has a very small value to the millionaire. Sometimes the reverse can happen. A dollar may sometimes have very small value to someone on welfare, if at that moment they are feeling well fed, warm, and with someone they love.

The key to value is control. An item can have value because in itself it satisfies some want (in the terms of Perceptual Control Theory, its acquisition reduces the error in some perceptual control system) or because it gives the person freedom to control better a variety of things. A haircut may have the former kind of value: the person had hair longer than desired, and the haircut reduced the hair’s length to what its owner wanted. Health and strength have the second kind of value, since a strong healthy person can do more different things than can a sickly, weak person. Money also has the second kind of value, in that the possessor of much money can trade it for a variety of goods and services unobtainable by a poor person.

If value relates to a measure of control, and is also a perception, it follows that what a person is perceiving relates to how the person perceives their ability to control their own circumstances. That is an aspect of imagination, of self-perception, and may well be available only to humans and their close relatives. The person perceives how their life would be changed by making a trade; every trade involves giving away something that has value (reducing the person’s ability to control), and getting something that has value (enhancing the person’t ability to control).

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