Everything we value in our life is a product of an exchange in resources. In other words, anytime there is an exchange (trade) value has been created, defined, or acknowledged (*poof* like magic). There are six resources that manifest value through some means of exchange:
1. Capital
2. Ideas
3. Objects
4. Labor (Time)
5. Services (Wisdom)
6. Relationships
All of these resources have their own markets (literal or figurative) that form economies for each. These resources bring value to our lives every day, and every day we have an economic impact on one or more of these markets whether it’s realized or not. Value is what enriches our lives and makes life worth living. Everybody has different values in their life, but they all derive from one of these six resources, and are the result of an exchange that took place.
1. Capital
2. Ideas
3. Objects
4. Labor (Time)
5. Services (Wisdom)
6. Relationships
All of these resources have their own markets (literal or figurative) that form economies for each. These resources bring value to our lives every day, and every day we have an economic impact on one or more of these markets whether it’s realized or not. Value is what enriches our lives and makes life worth living. Everybody has different values in their life, but they all derive from one of these six resources, and are the result of an exchange that took place.
Capital
Our first resource for exchange is capital. This is simply currency (in one form or another), a universal tool for trade that has perceived value. Here is an example of a capital market defining value in an exchange:
People value a swimsuit more during the summer time than they do during the winter, so the amount of capital (currency) that defines the value of the swimsuit is determined by the demand of the market, and fluctuates depending on the economic season.
Capital is a resource mostly used as a tool to create value, exchange for value, and measure value.
Ideas
Within our thoughts, lies the ability to brainstorm new ideas. Ideas, on their own, do not hold any value. It’s not until ideas are met in an exchange, is when value is created:
· An artist brings their imagination to life on a canvas, in a story, etc.
· An inventor creates a prototype/blueprints
· An entrepreneur creates a business plan
· Contracts, Agreements, Bonds, Stocks, etc.
These examples are of ideas (as thoughts), being exchanged for a cause of action. The effect of the action is the creation of new value, in the form of intellectual property. Ideas, in the form of thoughts, can be exchanged as well. The act of exchanging ideas with people creates value that defies the laws of mathematics (sort of):
“If you have an apple and I have an apple and we exchange apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.” -George Bernard Shaw
Objects
Similar to currency, objects can be used as a tool for trade, but unlike currency the value is more intrinsic. These are the products, commodities, assets, and materials we trade or consume in one form or another. The value derives from the ability of these objects to sustain life itself, or sustain a specific lifestyle’s past, present, or future:
· Real Estate
· Precious Metals, Fossil Fuels, minerals, diamonds, coal, etc.
· Food, Drinks, Consumables, (Products of Agriculture & Science)
· Items of Ownership and Material Possessions of market value (products of technology/engineering)
· Keepsakes and “One of a Kinds” (any material possessions of personal value)
· And more…(Perhaps you could think of objects I failed to cover/classify)
Pawn shops, swap meets, farmer’s markets, are all examples of how exchange of objects can create value. I also thought, say you are trying to hang a portrait but only had a wrench, and your buddy was trying to fix a leaky sink but only had a hammer. I know it’s a cheesy example, but you see how each individual had an object that could be considered an asset to the other? By exchanging these objects value can be created; your portrait has given the wall aesthetic value, and your buddy has increased the functional value of his sink. Now, try to image this exchange on a larger scale within society: farmers, manufacturers, distributors, truckers, vendors, agents, brokers, etc. Every day, value is being created through the exchange of objects.
Labor
I always think of labor as an exchange of one’s time in order to serve a specific function or complete a task in which the end result is some measure of value. This resource is also used to measure the strength of the job market (http://www.bls.gov/). Jobs are one example of labor as a resource, being exchanged to create value, but labor could also come in the form of a gesture. When a parent cares for their child, making meals, raising, playing, they are spending time. Some may refer to this example as a “labor of love”, and the value created from this particular exchange dovetails with relationships.
Services
The difference between service and labor (as a resource), is that labor is used to complete a specific task or serve a specific function, whereas services solve problems or meet market demands in order to provide value. The best way to illustrate what I mean is to think of the labor resource as more of a human entity, and the services resource as more of a corporate entity. Examples of service creating value:
Problem = Many people are getting sick and are rendered “out of commission”, civilization is surely to decline if this persists.
Demand = Hospitals be built as a place to provide health services for sick/injured
Result = Value is created by restoring health to many people.
Wherever there are problems that need solving, there exists opportunities to create value. I use time as a measurement of labor, and wisdom as a measurement for services. I use wisdom, because anybody can gain the knowledge to understand a service, but unless they possess the wisdom to discern the application of a service to solve problems or meet demand, they most likely will be found in the labor pool spending their time performing tasks or serving a specific function. For instance, instead of healing many people, they heal only one at a time.
Our first resource for exchange is capital. This is simply currency (in one form or another), a universal tool for trade that has perceived value. Here is an example of a capital market defining value in an exchange:
People value a swimsuit more during the summer time than they do during the winter, so the amount of capital (currency) that defines the value of the swimsuit is determined by the demand of the market, and fluctuates depending on the economic season.
Capital is a resource mostly used as a tool to create value, exchange for value, and measure value.
Ideas
Within our thoughts, lies the ability to brainstorm new ideas. Ideas, on their own, do not hold any value. It’s not until ideas are met in an exchange, is when value is created:
· An artist brings their imagination to life on a canvas, in a story, etc.
· An inventor creates a prototype/blueprints
· An entrepreneur creates a business plan
· Contracts, Agreements, Bonds, Stocks, etc.
These examples are of ideas (as thoughts), being exchanged for a cause of action. The effect of the action is the creation of new value, in the form of intellectual property. Ideas, in the form of thoughts, can be exchanged as well. The act of exchanging ideas with people creates value that defies the laws of mathematics (sort of):
“If you have an apple and I have an apple and we exchange apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.” -George Bernard Shaw
Objects
Similar to currency, objects can be used as a tool for trade, but unlike currency the value is more intrinsic. These are the products, commodities, assets, and materials we trade or consume in one form or another. The value derives from the ability of these objects to sustain life itself, or sustain a specific lifestyle’s past, present, or future:
· Real Estate
· Precious Metals, Fossil Fuels, minerals, diamonds, coal, etc.
· Food, Drinks, Consumables, (Products of Agriculture & Science)
· Items of Ownership and Material Possessions of market value (products of technology/engineering)
· Keepsakes and “One of a Kinds” (any material possessions of personal value)
· And more…(Perhaps you could think of objects I failed to cover/classify)
Pawn shops, swap meets, farmer’s markets, are all examples of how exchange of objects can create value. I also thought, say you are trying to hang a portrait but only had a wrench, and your buddy was trying to fix a leaky sink but only had a hammer. I know it’s a cheesy example, but you see how each individual had an object that could be considered an asset to the other? By exchanging these objects value can be created; your portrait has given the wall aesthetic value, and your buddy has increased the functional value of his sink. Now, try to image this exchange on a larger scale within society: farmers, manufacturers, distributors, truckers, vendors, agents, brokers, etc. Every day, value is being created through the exchange of objects.
Labor
I always think of labor as an exchange of one’s time in order to serve a specific function or complete a task in which the end result is some measure of value. This resource is also used to measure the strength of the job market (http://www.bls.gov/). Jobs are one example of labor as a resource, being exchanged to create value, but labor could also come in the form of a gesture. When a parent cares for their child, making meals, raising, playing, they are spending time. Some may refer to this example as a “labor of love”, and the value created from this particular exchange dovetails with relationships.
Services
The difference between service and labor (as a resource), is that labor is used to complete a specific task or serve a specific function, whereas services solve problems or meet market demands in order to provide value. The best way to illustrate what I mean is to think of the labor resource as more of a human entity, and the services resource as more of a corporate entity. Examples of service creating value:
Problem = Many people are getting sick and are rendered “out of commission”, civilization is surely to decline if this persists.
Demand = Hospitals be built as a place to provide health services for sick/injured
Result = Value is created by restoring health to many people.
Wherever there are problems that need solving, there exists opportunities to create value. I use time as a measurement of labor, and wisdom as a measurement for services. I use wisdom, because anybody can gain the knowledge to understand a service, but unless they possess the wisdom to discern the application of a service to solve problems or meet demand, they most likely will be found in the labor pool spending their time performing tasks or serving a specific function. For instance, instead of healing many people, they heal only one at a time.
