That would be the destruction of MONEY, not of “value”.
And such is intentional to compensate for the directed creation of money.
They create (print) money to give to specific people and then use “consumerism” (wasting) to destroy it.
It has nothing to do with actual value except to those manipulating the game.
But money isn’t destroyed in the transaction. Before, one person has the money. After, another person does. The money is still there. The destruction is of value, in that a good is transferred from a person who values it more to a person who values it less. That inefficient allocation reduces the total value in society (again, in most circumstances).
Nono… Money is measured by value, not the other way around. If you trade money for a value and you don’t get the value, then you have “devalued” the money (aka “destroyed the money”).
Value is not in the goods or money. Value is strictly an issue of human interest.
Paper money is simply printed, having no value.
People desiring to use it in trade is what gives money its appearance of value that is then transformed into value.
It is always contingent on the desire of the people.
In your scenario, a person bought an item with money and thus has an item.
He traded up as far as he is concerned. The item was worth more than the money.
He gives that item to someone as a gift.
The person receiving doesn’t consider the gift worth the money (let’s say).
Thus the item was purchased under false presumptions of its value (its final desirability). The value of the item wasn’t what he thought.
Thus more money was spent on less value. That is called inflation, the devaluing of the money.
You have the same amount of money in circulation, but you have less value being traded with it.
The value of money comes only through what can be done with it.
In a since, you could say, “My $50,000.00 only buys me a worthless car” (although hyperbole).
And perhaps, “If I want to buy a really good gift, I have to spend $100,000.00”.
And “how much I am being paid for my labor is not going to buy me what I want.”
The value is being determined by the receiver of the goods, in this case, the final receiver of the gift.
The more money it takes to satisfy that value, the less value the money represents.
The desire of the receiver never changed, the actual value.
One such transaction doesn’t mean much, but if a million people do similar things, the money itself means less and each purchase requires more money. It takes more money to satisfy the receiver in the trade. More money to represent the same amount of value (desirability). And since the desire is not being satisfied, it grows stronger, INCREASING potential value.
Well, if the person cannot pay the rent or buy food, giving them stuff they can’t eat is kinda rude, but I wasn’t assuming the recipients were impovrished, I was thinking of gift giving in general. So I was thinking that this would improve other facets of the lives of the recipients. Sure, cash is good if the people can’t pay rent or buy food. Otherwise, though, cash might end up being the purchasing of cigarrettes or god knows what and some kind of loss of value.
I don’t see why we would equate “devaluing” money and “destroying” money. It is highly counter-intuitive to sit with a piece of paper in your hand and declare that as you watch it, it is being destroyed by inflation. It’s highly counter-intuitive to start a transaction with $100, end the transaction with $100, and claim that somehow that $100 was destroyed by the transaction.
There is a distinction between inflation and misallocation of resources. This transaction doesn’t add to the total money supply. Nor it doesn’t change how any of the participants view the value of the money: The price at which the transaction should occur would be the same before and after the transaction for all the participants. What changes is just the allocation of resources, and the change is negative.
I’m not sure why I shifted from interpersonal gift-giving to charitable giving, but I now see your point and agree that it solves the problems I lay out. Any person with possessions that they don’t value that would be suitable as gifts will on average improve total social value by gifting them, because at least some of the time the exchange will result in a net increase in value.
Well, counter intuitive or not, it has been going on for thousands of years. Solomon outlawed it, after the fall of the Roman Empire, the Catholics outlawed it, the Chinese never allowed it at (I don’t think), but to the rest of the world it has been the means for control and power.
And by “destroy”, I didn’t mean totally destroyed, just relatively destroyed in that it has less influence.
The “money supply” is only one means to control inflation and deflation. The value of money is determined by the amount of satisfaction it can buy. Merely by creating dissatisfaction, money is devalued because it takes more of it to purchase the same level of satisfaction.
The cycle is simple;
People in a society want for more and more because they sense dissatisfaction. That naturally causes the devaluing of the money. Then the bankers shut off the money supply so as to create deflation and depression. That increases the value of the money and causes people to be satisfied with less… temporarily. Then the cycle is repeated so that the bankers end up with all of the actual wealth as well as control of countries through extortion of their economy (which is why China has never allowed it. “Money is the root of all evil” (sortta)).
I’m talking specifically about your decision to equate devaluation and destruction. We agree the money isn’t destroyed, right? Because the money is the money is the money. It’s just devalued. The value goes away. The money stays. Right? Why would we describe a situation where the quantity of money stays constant and the value decreases by saying that the money is destroyed?
I can see how inefficiency is inflationary, but it seems to go through demand: things get worse, so it costs money to get back to where we were, whereas before where we were was free (roughly speaking). And perhaps the decision to call it inefficient vs. inflationary is just one of style. But how does it being inflationary mean that it is not inefficient, and how does the sum total of value decreasing not equate to a loss of value?
To take a step back, how is what you’re saying any different from what I describe in the OP? Suppose we call a net decrease in value a “destruction of money,” and we describe the whole transaction as inflationary rather than inefficient: do you then agree that gifts are inflationary and destroy money?
Just to add a tangent (apologies):
bank loans all devalue. They increase the amount of money in circulation since the banks create the money they loan out of thin air (since we’ve had fiat banking). More money in circulation, less value per dollar. So anything that reduces loans reduces a process of devaluation at least in that way.
For the same reason we might talk about your reputation being destroyed when you still have one… or your marriage, or your appearance, your relationship with your child,…
Value is formed by demand which is formed from desire (the seeking of satisfaction).
Value is imbued into the item desired. The money is merely a transfer vehicle.
Any time you satisfy a desire, you lose value whether by gift or purchase.
If you give a gift that did not satisfy the desire, then you increased value because you still have the original desire but now have another demand (for a garage sale).
“inefficiency is inflationary” ==> “inflationary mean that it is not inefficient”
One of us is getting lost in the logic here.
I am wondering what it is that you are really calling value when you say that it is lost in giving a gift.
Forgive my markups, I am just trying to make sense out of that part of the OP.
Are you trying to say that prior to the sale, the item had value in terms of potential money exchange (because the seller thinks in terms of the money being the value) and also some real desirability (actual value) whereas after the sale and giving, the item no longer has desirability/value?
The item didn’t have such desirability in the first place. Someone merely thought that it did and thus traded money. It would be like spending $100 for a nail because you thought that it was special but actually wasn’t. It is a loss in perception of value by discovering that it wasn’t special. How does that translate into “loss of value”?
The seller thought the item was worth something.
The purchaser thought the item was worth something.
The purchaser discovered that the item wasn’t worth what he thought.
The purchaser got screwed.
The seller got temporary use of money.
It seems that you are saying that if something is mis-purchased (bought under false presumptions), value is lost.
The value of the deception?
What actual value is being lost??
Re Destruction, let’s compare lighting a dollar bill on fire to printing a new dollar bill. Suppose I have a fiat currency in an economy where the total money supply is two dollars. In situation A, I light one of the dollars on fire, which increases the remaining dollar’s buying power (because the money supply decreases). In situation B, I instead print a new dollar bill, which decreases the buying power of the other bills. If I understand you right, you want to describe situation A as a creation of money and situation B as a destruction of money. It’s really just a matter of labeling, but it seems strange to me. Money is a tangible (or at least a discrete) entity. We don’t say that the chair is destroyed when I want to stand, or that my car is destroyed when I’d rather walk. We can apply to money the same linguistic tics we apply to reputations and relationships, but there’s a lot about reputations and relationships that suggests we shouldn’t. Most importantly, we can literally destroy money, we can’t literally destroy a reputation or a relationship, we only figuratively destroy it.
And I am wondering the same about you. Whatever value is, it seems like a net increase in well-being is valuable. When I exchange money for goods voluntarily, I do so because the exchange makes me better off. I value the good more than I value the money I trade for it, and the total value of my possessions increases. It seems crazy to say that a poor country whose citizens are starving has more value in its economy because they want for more.
I object to some of your changes:
“of” → “in”: I don’t mind the change, but it does not change the meaning of the sentence.
“if it is desired by anyone”: Acceptable.
“money is the median of exchange, not the value itself”: Acceptable.
“not true. The money has devalued due to being ineffective in the long run”: We aren’t looking at the long run here, but at a one-off exchange. At most, the change in the value of the money as a result of the transaction is marginal. This is a comparison of the total value before and after a transaction, and for those purposes it is accurate to say that the value of the cash before and after the transaction is roughly equal.
“to be” → “that was”: This is a different statement, and even if true, it is irrelevant. Here, we’re looking at the value of the product to the recipient. The reason the good has lost its resale value is that an individual is likely incur more cost selling the product than they are likely to receive for it (e.g., if their time is worth $10/hour, and it takes an hour to sell something for $5). Thus, I do mean the price “to be” received.
In this case, the value lost is the value of the item to the seller. The loss in value is the result of the inefficient allocation of the item, from someone who values it to someone who does not (this assumes that the item is simply discarded. As several have pointed out, if the item is donated or re-gifted, the value is not zero).
I ask again, James, do you see yourself to be challenging the claim that gifts negatively affect society?
Moreno, we seem to be mostly tangents at this point, so no apologies necessary. Tangents are probably where I learn the most, since I’ve usually made up my mind about the OP.
Re bank loans, don’t they increase demand in proportion to the increase in supply? As the money is created, so is debt that the borrower must pay off. So they have increased short-term money supply, but also increased longer-term liabilities. If the interest rate on the loan is set properly to offset the time-value of money, isn’t the net effect a wash?
Most definitely and certainly provably… although any proof requires the ability for the listener to comprehend the logic involved.
In effect, you are advocating a law against giving gifts.
I can easily surmise why you would be, but with me you are seriously arguing with the wrong person.
I am not a big fan of tyranny.
I’m not advocating a law; we can agree that there are many reasons why a law against giving gifts would be a bad idea. It would be a bad idea even given the loss of value I describe, because it would be costly to enforce, it would require a great reduction of personal liberty to police, and it would decrease respect for the law if only because it would be widely ignored.
Rather, I mean only to point out the social harm that results from gifting. If there is any consequence to be drawn from that, it is the individual decision not to buy gifts and to discourage others from gifting because most of the time doing so will make society as a whole worse off.
Yes, I understand the promotional. I just don’t understand the excuse yet.
You should be able to explain a loss in value without using money at all since money merely complicates the matter.
If I own a book and I give it to a friend, in what way has anything lost value?
From the perspective of both parties, they traded up.
Should I charge you for this conversation?
Isn’t the exchange in a discussion merely giving and taking?
Or are you saying that all discussion is a loss in value (although on some forums… 
).
We can’t really ignore money, because the money is part of the transaction. As Moreno pointed out, a gift of a possession that I don’t want any more does not produce the loss, and everyone is made better off. But the situation you quote me describing is not that situation. Rather, it is a situation where a the gift giver starts with money and ends with nothing, the recipient ends up with a good, and the seller ends up with the money.
A comparable situation that does not involve money is one in which a person greatly values a book, and gives it to someone who does not value it as much. Prior to the exchange, the giver has the book, which she values at X, and the recipient has nothing. After, the giver has nothing, and the recipient has Y<X. The loss in value is the difference between Y and X.
Again, as Moreno points out, giving goods that one no longer wants is quite efficient. Even if Y is quite low, if X=0 there is a net gain in value.
On the other hand, buying a gift is generally not efficient. This is the case I describe in the OP. To describe the same situation without money, you’d need to substitute some other kind of exchange, such as a barter. Thus, good A is traded form person 1 to person 2 for good B which is then given to person three. If person 1 and person 2 value goods A and B respectively more than person 2 and person 3 value goods A and B respectively, value is lost. I don’t think the considerations that make the loss of value more likely are mitigated by talking about barter instead of money, but money makes the situation much simpler by making the value of good A constant.
I disagree that money makes this conversion easier. And it is also misleading.
To establish value there must be 2 things;
A) a desire for goods
B) goods suitable to the desire
In order to destroy value, you must destroy one of those two things.
You can block the exchange, making the exchange medium increase in value.
That is what the banks do so as to extort wealth.
Over time, that can destroy the desire and thus the value.
You can destroy the goods such as to make them unsuitable.
Or you can make something else more desirable, destroying the value of the first goods.
If you satisfy the desire, there is no longer element A and thus no longer value in B.
But at that point B has served its purpose. Are you saying that is “destroying value”?
But if someone obtains an item so as to give it as a gift, the item possesses the value due to the giver’s desire to give it.
If he then gives it, it has served its purpose and the givers desire has been satisfied, but perhaps not the recipient.
The recipient perhaps never wanted the gift in the first place and thus the only value that the goods had were granted by the giver and as a gift. That value was satisfied.
I think that you have to define “value” better for your argument because there seems to be too many issues not being addressed concerning when something has value and how much.
If I buy a book and it’s not as good as I’d hoped, it’s disappointing, but it doesn’t have any harmful effect on the economy as opposed to me enjoying it (apart from recommendations I now won’t give to friends). The same applies to buying books for someone else, albeit with a higher chance that it will be unappreciated. But value to a person doesn’t equate to general use-value; a book has pretty much the same general utility whether I like it or not.
So if a publisher sells 2,000 books a quarter, but 4,000 in the fourth quarter with the extra purely due to the Christmas surge, then the extra 2,000 books are surely just a part of the aggregate societal value of the Christmas gift-giving tradition. By the exchange of presents, you create an enjoyable family bonding period (that’s the theory, at least 
); what’s more, there may very well be social status costs for not ‘joining in’, and social gains from being seen as generous, thoughtful, caring and so on. Human society has running costs far over and above physical infrastructure maintenance.
James, are you including the money itself as a good when you say that value requires a desire for goods? Money certainly has value, even if only as a means of exchange.
I think you are right to focus on what destroys value. You also make the interesting point that destruction of the value in one context may increase the value of other goods. I will deal with these points together, because I think that identifying what is “destroying value” will show that the value is not displaced. Only_Humean, I think this will be relevant to your points as well, and I will tie it in explicitly where appropriate. I’ll start with another example.
Instead of talking about books or consumer goods, look at some more basic resource like gas (‘petrol’ in the queen’s english). I hope it’s beyond argument that if we pour the gas on the ground, society has lost something (note that this does not require accounting of environmental effects or anything like that; for a stupid illustration, we might have used that gas to power a tractor to harvest crops, and we get more from the crops than we do from the gasoline-soaked earth). But what about in a situation where we aren’t simply pouring out the gas, we’re deciding between using it to harvest crops, or using it to power a light bulb. How do we decide this? In a market economy, the decision is made by who is willing to pay more. If harvesting crops produces more value, then someone looking to use the gas to run a tractor will be willing to pay more for the gas. If powering a light bulb produces X value, and powering a tractor produces Y > X, the gas will sell at a price Z such that X < Z < Y. But if gas purchased at Z is then used for powering a lightbulb, society yet again loses something. We’ve established that powering a light bulb only will only get us X value, and we put in Z value.
To see that this is a net loss, replace the [easier] dollar values with some other basic resource, like person-hours. Let’s say it takes T person hours to harvest a unit of crops without gas, S person hours to produce gas, and R person hours to harvest a unit of crops with gas, and that these values are further constrained by the relation S + R < T (that is to say, it takes fewer hours to produce gas and use it to harvest crops than it does to harvest crops without gas). Producing gas, then, saves us person hours when we use it to harvest crops.
Now, the easy case is where powering a lightbulb for a unit of time costs less in person hours than does producing gas and using the gas to power the lightbulb. In that case, it’s clear that using gas to power the lightbulb results in a net loss of person-hours. A slightly harder case is where using gas to power a lightbulb is more efficient (i.e. uses fewer person-hours than does powering a lightbulb without gas), but not as much more efficient as harvesting a unit of crops with the same amount of gas. If we use the gas to power a lightbulb, we lose the difference in person-hour gains between the lightbulb use and the harvesting use of that gas. Society loses those person hours. As a result, the person-hours spent producing the gas are worth less to society; part of their value is destroyed.
To say that value is destroyed is then just to say that society is made worse off. Whenever resources are wasted, society is made worse off. That’s true whether the waste is complete or partial. The situation doesn’t change when we’re talking about exchanging money for resources rather than resources for resources, because the money is just an abstraction of the value of resources. If I can sell my person-hours for money and use the money to buy gas, it doesn’t matter if I’m selling my person hours to someone who will use them for gas production or website administration, I can still use them to buy gas.
OH, that ‘harder’ example is where I think your book example falls. If you spend money (or resources) on a book thinking that you will get more value from the book than the value of the money you’re spending, it actually does destroy value when you end up getting less. Someone has spent person-hours creating that book, and when you buy it you reimburse her for her time. If the book is shitty, you are reimbursing her for wasted resources, and encouraging her to waste more hours creating shitty books. Since you are more likley to misappraise the goodness of a book to someone than that person is himself, you are more likely to waste value by gifting a book than by giving the person the money that you would have spent on the book. That higher probability is a greater risk of waste, so the value extracted from the good has to be reduced by the increased risk of that good being wasted. Thus, like when you use gas to power a lightbulb rather than to harvest crops, you waste, and destroy value, when you give gifts because of the difference in likelihood that the gift will not be of sufficient value. (Your other comments go to social bonding and similar effects of gifting, which I think I adequately respond to in the OP; please let me know if I’ve misunderstood).
Books are an interesting and noteworthy example on which to drill down, since they are non-rivalrous, and because the ‘value’ you’re extracting from them is pleasant leisure:
The non-rivalrousness means that the price is a little fuzzier than when you’re talking about a good where each instance of the good can be readily mapped to the resources that go into it. Because each copy of the book costs only a small amount once the writing is complete, there’s less loss when someone who doesn’t like the book ends up with it. With rivalrous goods like a shirt, the fact that I have the shirt (or the gas or the person-hour) means that it can’t be had by anyone else. It can be more readily wasted by misallocation than can a non-rivalrous good. There is still waste with the non-rivalrous good to the extent that each copy of the good has a price (which some intellectual property skeptics would challenge anyway).
The fact that the value you’re extracting is pleasure means that you’re essentially seeking social waste anyway. But presumably you value your leisure time, it somehow does something for you, and so to spend that on a book that you dislike is to waste that resource, and perhaps you’ll need to spend more leisure time on another book in order to compensate (or you’ll just be grumpier when you return to your socially-productive tasks, still a cost).
So, it seems like in this thread we’ve identified some classes of gifts that maybe we can agree are better than others in terms of their social effects (again, ignoring the positive effects of social bonding etc. that come from the gift-giving event):
I get what you’re saying here, but you seem to be drastically unappreciative of the value of surprise.
Sentimental value comes from the formulation of memories. That is someone exercises creative thinking towards another’s interests and thinks, “Hey, this would be an interesting offshoot.”
This is especially the case in a market with specialization of labor where people who work in different sectors might be familiar with techniques or components that could serve as shortcuts in other sectors. Specialization makes surprises easy to come by because people are focused in tunnel vision in order to be efficient, so having one’s horizon widened comes with great awe.
If you’re struggling to find friends who are good at this, then you probably need more heritage, narrative, or storytelling in your social circle where friends have a general understanding of what it takes to craft nuances without mimicking the exact same nuances across culture.
That way, people can exchange gifts which represent nuances you wouldn’t ordinarily think of.
While I acknowledge that there is an interpersonal dimension to gift-giving which produces social value through improved trust, reliance, etc., I don’t think I am underestimating its effects (to the extent that I am offering a concrete estimate at all).
In particular, my criticism is applicable to compulsory gift-giving occasions like holidays and birthdays. This consideration seems a strong response to the claim that the surprise is sufficient to offset the waste. Much of the surprise of gift-giving is lost when the receipt of a gift is demanded. Moreover, the fact that a gift must be purchased will tend to reduce the degree to which the gift is thoughtful, sentimental, or surprising: as I argue in the OP, these are generally not criteria that can be forced, nor that can be repeated with equal effect. Moreover, since these occasions result in many gifts, only a small percentage of the gifts will actually create the memories that seem to underly the value you are describing.
Again, I don’t mean to deny that there are social benefits from gift giving, but rather that the net effect is negative. At the very least, I hope to make clear the ways in which gift-giving destroys social value and create economic waste. If you are not convinced that the net effect is negative, do you at least accept the ways in which the perceived benefits are offset by the loss of value I describe?
Maybe the waste of compulsory gift-giving wouldn’t be inconsiderate if people brought “Christ” back into Christmas. 
I get what you’re saying. It’s the commodification of holidays that pressures people into making haphazard decisions. People don’t celebrate holidays with meaning, so surprises don’t happen since they lack intuitive due diligence and duty of care. Instead, people are just buying something to keep up with the Joneses.
The problem is modern society refuses to acknowledge the necessity of heritage to create endogenous economy. You can have all the technology, infrastructure, and savings in the world. If you have nothing to do with it, all you get is a mindless broken window fallacy where people are pushing natural resources around for no purpose.