Money

Great segment. And this failure to understand the role of money as a store of value is what trips up the Modern Monetary Theory (MMT) folks. They almost sound convincing until you really look into it.

Bill very nicely and quickly dealt with debunking the labor theory of value. And he kind of implied that value was totally subjective, but perhaps that could have been emphasized a little more.

But something the guys might explore further still is what I call the “persistence of value”. If you buy a new TV, it retains its value beyond the time and effort to make it, so the manufacturer can continue to add more value (wealth) to the economy by making more TVs before the value of that first TV obsolesces. This is why physical manufacturing and the process skills to do it are so important and “valuable”. And of course there is the national security side of that, too.

In contrast, most, but not all, services consume their value during the performance thereof. Think of staff at the restaurant, or the value of publishing newspapers [ok, I know!!]. Their value is mostly consumed shortly after their service is finished. Thus, these services must be continually repeated to keep adding value to the economy. Perhaps some residual value remains as a favorable impression at the restaurant, so you would go back there again. And eventually the newspapers become historical repositories of a sort. Whereas, legal services and some insurance services, and similar administrative efforts, might retain their value for a very long time (keeping you out of jail; yearly property insurance; contracted services for the length of the contract, etc.).