Consider two kinds of value: Monetary Value (henceforth, M) and Trascendental Value (V).
By, Transcendental Value I mean only: value that transcends Monetary Value.
Consider a gift given from a mother to a child. The mother doesn't care about the M Monetary Value, the child may perceive the gift as sentimental in value. That value (by both parties) is V Transcendental in the sense above.
These kinds of interactions are very common (and constitute a major facet of meaningful personal relationships). In fact, a feature of friendships (for example) is that people are often offended when M becomes entangled with the friendship V (see: "The unacceptability of money as a gift" as an example of this kind of research).
Warren Buffet puts this distinction between Monetary Value and [what I call Transcendental Value here to emphasize value or worth that exceeds both monetary pricing valuations and utilitarian "utility"] quite well: "Price is what you pay, value is what you get".
I assert that while these kinds of interactions are incredibly common (to the extent that most people likely engage in them several times daily) they are almost unaccounted for in most modern economic theories. Why? And, what would be the impact if they were?
Air is so abundant it is usually free.
Recently, entrepreneurs have made millions bottling air and selling these to the Chinese.
Here, we see a radical divergence of M and V. We observe that M will often follow V where there (at least intuitively) seems to be an abundance of V not yet tracked by M.
Where there's V and it exceeds M, M will follow V.
We've seen movies where scientists become stranded on planets and items of little to no worth suddenly become the most important.
Here, we see how M and V diverge. These are not mere inefficiencies but substantive misalignments in terms of what matters.
Air is mostly free on Earth (save for the example above). What happens if you're below the ocean (or, say, deep in space) and you need an extra supply of oxygen?
In that scenario, are we to say that M suddenly sky-rockets? Or, that there's a fundamental misalignment of V and M?
What are the economic implications of not correctly tracking V?
I can think of a few real-world scenarios where these kinds of considerations have already had a major policy impact:
But, money, we're told is a store of value and an index of value. M has money as its units of evaluation. But, where does M come from anyway?
Remember: money systems are created by laws - in the United States it's the Coinage Act of 1792. In other words, it's a major mistake to think that "money" (in some vague sense) is the most valuable thing because money is dependent on the laws and enforcement systems that make it possible in the first place.
Let's re-ask these questions until we get a firm set of answers:
Is it possible that many highly valuable interactions are swept under the rug and not accounted for within market systems today?
If V isn't appropriately tracked by M, what then? What does that mean?
If saving a life is infinitely valuable V, why are first-responders some of the lowest paid M (at least here in Seattle)?
Food for thought. Perhaps the focus on M in matters of governance prevents us from adequately considering V?