It is common today to use the price of a product or service as shorthand for its value. There is reason for this substitution, but it can be misleading as well, and too often leads people to ignore crucial questions about value in critical thinking and decision-making. In this course we will explore the distinction between:
What people happen to want, prefer, or value and
What people should want, prefer or value.
Observing peoples’ choices often puts us in a good position to understand why they do things they do and also helps us make sense of how markets work, how prices arise, and how various incentive structures influence our behavior. Thinking about what people should value, in contrast, is the necessary first step in evaluating what people do, making sense of how markets should work and what is involved in their failure, interpreting when a price reflects the true value of a product or service (or not) and designing incentive structures to encourage citizens to make the right choices.
Lord Darlington, in Oscar Wilde’s “Lady Windemere’s Fan” warned against being someone “who knows the price of everything and the value of nothing.” In this course we will investigate the degree to which price and value are related. One theme we will be pursuing is that a society’s choices, as reflected through the pricing system of markets, often differ from what seems truly good, or just, or right. In light of this contrast, we will examine how and when economic, social and political systems can work to take advantage of, or even forge, a connection between what people choose and what they should value.