…is worth two in the bush. We have all heard this little quip, made to demonstrate the value of a sure thing as compared to the possibility (though not certainty) of an alternative. In this little quip, one can find the concept of both unit of measure and unit of value.
While the unit of measure (the bird) is not precise, it satisfies the purpose. It offers a common basis for comparison, a commodity that is quantifiable and measurable.
As to the unit of value, the teller of the tale suggests that one bird (with certainty) is worth the possibility (but not certainty) of two birds in the future. But is this certain? It cannot be. It might be for the teller of the tale. But it may not be for anyone else. Some would certainly prefer one option or the other, and not view the two as equal in worth.
Units of measure are objective. This is true for gallons, liters, feet, and meters. It is true for dollars – certainly since 1971. For an advanced, division of labor economy, this is a necessity – one the market will encourage for the purpose of efficiency in trade. While units of measure are objective, they are derived and agreed upon in a subjective manner – people have agreed to that which works, that which facilitates communication and trade.
Units of value, however, cannot be measured – what is the value of 0.3 liters of a good beer? It might be one thing to me and another to someone else. While the unit of measure is certain, the unit of value is subjective – different for each person approaching the bar.
The market approximates this through prices – prices expressed in units of a common measure. Prices are the expression of the value that the countless participants in the market place on a good. Prices give an objective measure to the subjective wants of participants. The offering price by the bartender of €3 for the beer will separate those who value the beer at this amount or more from those who find the value of the beer to be less.
So what of dollars? A dollar is an objective unit of measure – a dollar is a dollar, always itself; a mathematical identity. Certainly since 1971 it has not been definable in any other way. The value of the dollar – that is subjective. It is worth what it is worth to each individual participant in the market.
Measures must be objective if they are to serve a purpose; value, however, will always be subjective – in the eye of the beholder.
A bird in the hand is worth…well, you fill in the rest.