What’s it called if I buy something like a sandwich, then consume it, and the net worth of society has now shrunk by 1 sandwich? Versus buying something that keeps its value.

Question

Maybe a better example would be a country getting leveled in a war. All of the money is still there, but now everyone is poor and has no net worth. How does that work?

It seems kind of like losing that amount of money, even though we didn’t?

In: 3475

Answer 1

You purchased a sandwich, so the value contained in the sandwich is still circulating in society in the form of money. It didn’t go away, it just got transmuted. And if you are a worker, consuming the sandwich is a form of productive consumption, because it gives you the energy to produce commodities that contain a greater total amount of value than that sandwich (to ELI5 that last bit, the calories in 1 sandwich could give you the energy to make another 50 sandwiches, which could then each be sold for the same price as the original sandwich – your labor is what creates value). Of course, you could also consume the sandwich unproductively, by using the energy to play video games or something. Still, that wouldn’t change the fact that the value in the sandwich is still out there, circulating as money, and other people are also out there creating more value by making more sandwiches, etc. New value is always entering circulation.

The question about a city being leveled in war is a different issue. See, value (how much money you can exchange a commodity for) is inextricably bound up with *use-value*, an object’s ability to be useful to someone for something. Use-value is based on the physical characteristics of the object. A building is has use-value while it’s standing, because people can live and/or work in it, or use it to store things. Once it’s been bombed to rubble, it has no use-value, and so the value originally contained in it is gone. It can’t be sold for the price of a building, because it can’t do building things. To further illustrate, you bought the sandwich in the first example because it has the use-value to you of nourishing your body. But say that as the guy from the sandwich shop was just about to wrap it up for you, a cockroach fell from the ceiling into your sandwich. Now, it no longer has the use-value of being nutritious, because there’s a potential disease vector in it, and the sandwich guy has to throw it out. The value that’s in it is gone, wasted, because the use-value is gone.