Price is an agreement. Value is what a thing does.

Two questions asked as one

“What is this worth” and “what does this do” sound like one question, and usually arrive at the same answer. When they separate, only one of them keeps being heard.

A note, a coin, a bar of gold - none of them warms, feeds or supports anything. They represent an agreement. The agreement is extremely useful: it lets work be exchanged for work without the two ever meeting. The agreement is real. The point is that it is an agreement, and can therefore move independently of the thing it represents.

Where value comes from

Use determines what a thing is, and what it is determines its value.

A tool that cuts is a cutting tool because it cuts. If it stops cutting it keeps its shape and stops being what it was. A high price can be attached to it; the price will not return the action.

This is an argument about order: price reports value rather than creating it.

Where the two come apart

The separation is never dramatic. It happens quietly, in four familiar places.

When the action stops and the form remains. A process set up to solve something keeps running after the thing is solved. It is still budgeted, still staffed, still in the report. The worth is preserved; what it served is gone.

When the measure replaces the thing measured. A metric is built to describe performance, and then the metric starts being managed. Now there is a precise worth attached to something that has stopped being what was wanted.

When scarcity is mistaken for usefulness. A thing is expensive because there is little of it, not because it does more. Both produce a price. Only one produces value.

When time is what is paid. Someone gives hours, attention and effort - their life’s energy - for a thing whose price is known and whose action was never checked.

What this shares with a standard

I have written elsewhere that a clock counts a chosen movement from a chosen zero, so every time standard is an agreement. A price is the same kind of object.

The agreement is useful, and it can also be tested. A time standard is checked against the world and corrected when it drifts. A price is checked far less often against what the thing actually serves, because the system producing the price asks a different question.

An agreement that cannot be argued with has stopped being an agreement and become an assumption.

What can be checked

Three questions, for anything that carries a price - an asset, a process, a subscription, a role, a tool:

1. What does it do, this week? Not what it is for, and not what it once did.
2. If it stopped, what would feel it, and when? If the answer is “nothing, for two months”, that is a fact about its value rather than about anyone’s patience.
3. What is actually being paid? Not only money: time, attention, and the moves not made because this held the place.

The second question is the sharp one. It tests dependency, which is the only thing that can be measured without first agreeing what something is worth.

The boundary of the claim

This is not a claim that price is an illusion. An accurate price is an achievement, and it is what makes it possible to decide without re-examining everything.

It is also not a claim that all value can be measured. Some things act really and are not measurable, and that is exactly why the second question is the one that carries the weight: what would feel it. Dependency shows itself even where no number does.

And there is no claim here about an economic system. The question is local, and it works precisely where a person can act.

What becomes available

Someone who checks the two questions separately gets something plain: they know what they are holding because it works, and what they are holding because that is what was agreed.

Both sets are legitimate. The expensive thing is losing track of which set a thing is in, because then every decision about what to let go is made on the price - the one figure that reports on the agreement rather than on the action.