Value

The tutorial question on ‘how is value produced’ provoked me to think about the answer to this question. People ascribe the value of an object. Depending on the period of time, the cultures of people, the rarity of an item, and many more reasons, these all contributes to demand. Naturally, when an object is high in demand, people ascribe a higher value to it. This leads to the creation of branding. A friend of mine (we shall call him A) once told me he had a friend (B) who worked in the factory producing extremely branded goods (the brand will not be mentioned). B told A that this high quality product has actually very low production cost and he could easily give A several pieces of the product of he wanted some. B said that people buy the brand because it was imported and that it supposedly had good quality even though the quality was really just average. Hence, although the product was produced locally, the company had the product shipped out of the country and back again without the product ever leaving the ship just so that the product would be considered ‘imported’ and more highly sought after. This brings up 3 issues of value which is the intrinsic value of an item, the moral issue of co-creation of a brand of an object as well as the true reason behind the creation of value which is the desire of people to discriminate the wealthy from the poor in order to create a social status differentiation.

Firstly, the intrinsic value of an item is different from the ascribed value of it. An example of intrinsic value could be seen from food. The function of food is to provide one with energy to do work. By this definition, carbohydrates, which can be represented by bread, should be priced above proteins, which can be represented by salmon sashimi if judge by the intrinsic value of an item. Yet, it is common knowledge that salmon sashimi is a Japanese delicacy that one would pay a lot more for compared to bread.

Secondly, the story above clearly brings out a moral issue. Simply because people’s demand and willingness to pay is higher for imported goods, is it then morally correct to send a locally produced good out of Singapore and back again to label it as imported goods? This example is similar to that of perhaps an American brand producing their goods in non-developing countries. Is it ethical then to say that both the design and quality is that of the American brand? The demand of a particular brand is created not only by the company through quality control and other measures, but also by the people who identify with the particular product and hence are willing to pay more as well as play a part in the advertising of a brand making it even more desirable and creating even more demand in the process. It is unfair enough that although a brand is co-created by the company and the people, the people have to pay the extra hidden charge while the company earns the surplus, on top of that, the companies also ‘cheat’ consumers by labeling the goods with one brand but producing it in another area.

Thirdly, the reason behind ascribing values to things is also for wealthy people to attain a higher social status. By ascribing ridiculously high prices to certain brands and advertising these products, people who are able to buy these products would automatically be labeled as wealthy and form a clear distinction from people who cannot afford them. In this way, the wealthy can be acknowledge and given a higher status in society. Hence, value is produced because of people’s need to discriminate each other in terms of wealth to obtain a higher social standing.

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