Nov 26, 2021
Value, Birbal and Happiness
The idea of value is complicated. Here I refer to value not from an ethical point of view but that of a ‘value’ that gets derived from tangible things. Value and price are dissimilar. The theoretical value of a vanilla option (financial derivative) is its Black-Scholes formula whereas its price is what gets transacted in the capital market. Of course, while financial options are driven by more rigid logic, the same cannot be said about other things in life. If the difference in price and value of, say, a call option were too digressive, then market forces will step in to profit from it. However, when it comes to matters of personal choice value and price go, well, not hand in hand.
In the court of the emperor Akbar, Birbal was a central figure who was the chief advisor to the king. In an apocryphal story, the king draws a line on the floor and asks if the drawn line can be shortened without rubbing out its ends. The astute Birbal immediately draws a longer and a parallel line right next to the king’s original one and remarked that without rubbing the original line he was able to shorten it!
The concept of value, price, and happiness are all linked in a convoluted way to those drawn lines! Last week I persuaded my younger son to take a walk in the supermarket for the fun of it. But being the typical six-year-old, he made sure that I took him to the toy shop first to address his ‘lack-of-toys’ issue. While we were strolling by the various shelves of the shop, his eyes fell upon a big remote-operable car. The car was priced at £50 and that seemed to be expensive to me. Moreover, I know from the past that his affinity to this particular object would follow an exponentially decaying rate with time, and that by the end of the first week, the said car could have been either broken or dumped in the attic.
Now I had to use my skills to dissuade him from making me buy that car. But an immediate refusal to buy would have been disastrous as his tantrums might have ruined the fellow shoppers’ brief moments of happiness. Therefore, I used a better ruse: A lure of a bigger/better toy. He agreed and we trotted around the other aisles of the shop and suddenly he stopped and started quivering. He spotted one of his favourite toys: A box of play dough. These are multi-coloured dough that could be moulded into many shapes and forms. This toy was priced at only £5 but for his eyes, this was far more valuable than the more expensive car he chose initially. Jumping with absolute delight he made me buy that and thanked me profusely for my kind gesture. Value and price were dissimilar when the context hovered around personal choices. Perhaps a minimalist is happier than an aquisitive. I will leave the esteemed reader with one of my favourite quotes of Steinbeck: “Anything that just costs money is cheap!”
What do you value?
