No intrinsic value? Let's look at what is and isn't intrinsic.

[Sonic]

Intrinsic basically means inherent. Extrinsic then is value that is placed on it from an outside perspective. Money, in its purest conceptual form, is purely extrinsic. It is a means to an end. The middle man between you and a meal, the meal being intrinsic.

Do precious metals have intrinsic value? Yes and no, depending on your plans with them. If you plan on sitting on a stack to make a future profit, then no, for you the metals are entirely extrinsic. But what if you chose to disinfect a wound using silver? You can even purify water with it. You could be involved in the process of any of the many industrial uses, building solar panels, or whatever else you might be using it for. If that is how you are using it, then for those purposes it has intrinsic value. In this sense, silver has much more intrinsic value than gold.

Paper money has almost zero intrinsic value. I say almost only because you can start fires with it, and maybe some other little practical uses. Digital currency is 0% intrinsically valuable.

So, for most of us here, yes, our precious metals have no intrinsic value for us. We're using it in an entirely extrinsic way, a means to an end. A middle man. But to say that silver simply has zero intrinsic value is overlooking a few things.

 

[elninjo]

Silver is also used in cellphones as a transmitter of electricity and as a thermal-conducting paste for cooling computer CPUs.

Gold is used to treat diseases, such as rheumatoid arthritis and tuberculosis.

So whilst most of us wouldn't use it for that, PM's certainly have intrinsic value.
The argument of intrinsic value of PM's though generally revolves around prepping and the view that PM's have no intrinsic value for that purpose.

Not sayin thats what I think, just saying thats what a lot of people think.

 

[SilverDJ]

Silver is also used in cellphones as a transmitter of electricity and as a thermal-conducting paste for cooling computer CPUs.
Gold is used to treat diseases, such as rheumatoid arthritis and tuberculosis.

The majority of modern electronic devices also use gold. Gold plating on the PCB's mostly.
About 41 mobiles phones will yield you 1g of gold:
http://www.bbc.com/news/blogs-magazine-monitor-28802646
or about 300g from a tonne.

I think about 10% of mined gold is used in industry, probably the majority of it not recycled.

 

[ryan71]

I would not be surprised if, in our future, lead will have the most intrinsic value.

 

[mmissinglink]

Neither silver nor gold have intrinsic value. We unequivocally know this because intrinsic means "unto itself" or "inherent" which is defined as 'existing permanently within something.' What is the definition of value in the context of applying it to a commodity or asset such as gold? "The amount of money that something is worth : the price or cost of something." The only value therefore that silver or gold have ever had and can ever have is the value that people attach to these commodities / assets because gold and silver can neither value themselves nor is the value they have existing permanently in them.

In my view, far too often, some people confuse and mistake intrinsic characteristics or properties with value. Typically, it is these same people whom also conflate the utility of gold or silver (or any metal for that matter) to alleged 'intrinsic value'.

When we talk about the value of gold or silver as an asset or even if we were to describe it as "money", we are specifically referring to its worth to those who desire or value it as such. In the same exact way, anything can have value; pretty seashells, sticks, chocolate diamonds, dog feces, and anything else you can think of. The value that gold, pretty seashells, silver, dog feces, and fiat money have is always extrinsic because the value they have as a commodity or asset is a value that we attach to them and comes from us....it is not intrinsic to those things. For example, right now, you wouldn't pay $160,000,000 AUD or USD for an ounce of common silver blob, right? Why? Is that because A) silver doesn't value itself at that level or because B) you don't? If you answered "B" then you have proved my point because it is you who is attaching a value to that ounce of silver. That's the way it works with the value of any asset or commodity.

Finally, if things like silver, seashells, and sticks really did have an intrinsic value, then you would have to explain precisely what their value was not only 10,000 years ago but 10,000,000 years ago. Afterall, you are the one who is claiming that the value they have is not extrinsic and not what humans attach to these things. And PLEASE do not conflate intrinsic properties or (potential) utility with the worth or value of those things 10 thousand or million years ago because then you wouldn't be supporting your position that they have alleged 'intrinsic value'.

Utility 'intrinsic value'
Intrinsic properties 'intrinsic value'

Silver and gold have utility to us and they have intrinsic properties / characteristics, but not 'intrinsic value'.



.

 

[wrcmad]

I would not be surprised if, in our future, lead will have the most intrinsic value.

Then it's shytehouse spot price could be explained away by it being a mere by product of silver mining.

 

[rainy day]

The intrinsic value is it's beauty!

When people use intrinsic to refer to silver and gold they mean generally it is universally valued. Women desire gold and silver and since man is slave to woman's want it has intrinsic value.

 

[Miksture]

In some ways, physical metal has more value to individuals than virtual metal (ie paper or electronic ownership of metals located elsewhere). How? Because there is an aesthetic value as well. Stackers like the look of gold and silver. It gives them a good deal of pleasure. I think that a lot of people overlook that value. It is neither intrinsic nor extrinsic in that it is in the nature of the viewer.

 

[SpacePete]

Finally, if things like silver, seashells, and sticks really did have an intrinsic value, then you would have to explain precisely what their value was not only 10,000 years ago but 10,000,000 years ago.

Why do we have to be able to measure it to know it has or had value?

And in what unit of measurement would you put a value on something that old?

What about buildings that are thousands of years old, do they have no intrinsic value today if we can't estimate value when initially built and utilized?

With the ancient buildings, I think that would be modern day subjective value vs. the intrinsic value of their construction materials.

Anyway, there's more than one definition of intrinsic value depending on which field it is being applied to.

To pick a few (copied from Wikipedia):

In the field of economics, the commodity value of a good is its free market intrinsic value under optimal use conditions. In a free market, the commodity value of a good will be reflected by its price. For example, if an acre of land can yield a net of 100 dollars loss by lying fallow, 50 dollars gain by being planted with corn, and 100 dollars gain by being planted with wheat, then that acre's commodity value is 100 dollars; the farmer is assumed to put his land to best use.

Intrinsic value is an ethical and philosophic property. It is the ethical or philosophic value that an object has "in itself" or "for its own sake", as an intrinsic property. An object with intrinsic value may be regarded as an end or (in Kantian terminology) end-in-itself.

It is contrasted with instrumental value (or extrinsic value), the value of which depends on how much it generates intrinsic value. For an eudaemonist, happiness has intrinsic value, while having a family may not have intrinsic value, yet be instrumental, since it generates happiness. Intrinsic value is a term employed in axiology, the study of quality or value.

In commodity money, intrinsic value can be partially or entirely due to the desirable features of the object as a medium of exchange and a store of value. Examples of such features include divisibility; easily and securely storable and transportable; scarcity; and difficulty to counterfeit. When objects come to be used as a medium of exchange they lower the high transaction costs associated with barter and other in-kind transactions.

In numismatics, intrinsic value is the value of the metal, typically a precious metal, in a coin.

Intrinsic Value: The market value of the constituent metal within a coin.
Legal or Face Value: The legally defined value of a coin relative to other units of currency.
Market Value: The price that a coin will fetch in the marketplace. For most coins in circulation this value is coincident with the face value.

In finance intrinsic value refers to the value of a company, stock, currency or product determined through fundamental analysis without reference to its market value. It is also frequently called fundamental value. It is ordinarily calculated by summing the discounted future income generated by the asset to obtain the present value. It is worthy to note that this term may have different meanings for different assets.

I'm sure there are more.

Also see: Value Theory

Value theory encompasses a range of approaches to understanding how, why and to what degree people value things; whether the thing is a person, idea, object, or anything else.
...
Many people find it useful to distinguish instrumental value and intrinsic values, first discussed by Plato in the "Republic". An instrumental value is worth having as a means towards getting something else that is good (e.g., a radio is instrumentally good in order to hear music). An intrinsically valuable thing is worth having for itself, not as a means to something else. It is giving value intrinsic and extrinsic properties.

Intrinsic and instrumental goods are not mutually exclusive categories. Some things are both good in themselves, and also good for getting other things that are good. "Understanding science" may be such a good, being both worthwhile in and of itself, and as a means of achieving other goods.
http://en.m.wikipedia.org/wiki/Value_theory#Intrinsic_and_instrumental_value

 

[elninjo]

Neither silver nor gold have intrinsic value. We unequivocally know this because intrinsic means "unto itself" or "inherent" which is defined as 'existing permanently within something.' What is the definition of value in the context of applying it to a commodity or asset such as gold? "The amount of money that something is worth : the price or cost of something." The only value therefore that silver or gold have ever had and can ever have is the value that people attach to these commodities / assets because gold and silver can neither value themselves nor is the value they have existing permanently in them.

In my view, far too often, some people confuse and mistake intrinsic characteristics or properties with value. Typically, it is these same people whom also conflate the utility of gold or silver (or any metal for that matter) to alleged 'intrinsic value'.

When we talk about the value of gold or silver as an asset or even if we were to describe it as "money", we are specifically referring to its worth to those who desire or value it as such. In the same exact way, anything can have value; pretty seashells, sticks, chocolate diamonds, dog feces, and anything else you can think of. The value that gold, pretty seashells, silver, dog feces, and fiat money have is always extrinsic because the value they have as a commodity or asset is a value that we attach to them and comes from us....it is not intrinsic to those things. For example, right now, you wouldn't pay $160,000,000 AUD or USD for an ounce of common silver blob, right? Why? Is that because A) silver doesn't value itself at that level or because B) you don't? If you answered "B" then you have proved my point because it is you who is attaching a value to that ounce of silver. That's the way it works with the value of any asset or commodity.

Finally, if things like silver, seashells, and sticks really did have an intrinsic value, then you would have to explain precisely what their value was not only 10,000 years ago but 10,000,000 years ago. Afterall, you are the one who is claiming that the value they have is not extrinsic and not what humans attach to these things. And PLEASE do not conflate intrinsic properties or (potential) utility with the worth or value of those things 10 thousand or million years ago because then you wouldn't be supporting your position that they have alleged 'intrinsic value'.

Utility 'intrinsic value'
Intrinsic properties 'intrinsic value'

Silver and gold have utility to us and they have intrinsic properties / characteristics, but not 'intrinsic value'.



.

The concept of intrinsic value is based in ethics and is a rationalisation of value being absolute to an object or a concept like happiness, pleasure or pain.

Since intrinsic value of something is measured in absolutes ie assessed as having that value by a valuer then that value is as we say, in the eyes of the beholder. The concept of intrinsic value is a philosophical argument only.

how do we measure value? Intrinsic or otherwise.

 

[BeHereNow]

Value is subjective, first, last and always.
The meaning of any word or term is a philosophical argument.

No thing, idea, concept, has objective value.

 

[mmissinglink]

Why do we have to be able to measure it to know it has or had value? .

If you read my argument above as to what value means in the context of attaching worth to an asset or commodity (which is exactly what we do to assets like silver and gold) then you'd understand why those who are claiming that gold / silver has intrinsic value would have to say exactly what that value is at any point in the past. That's because to have a value not dependent on you or I or anyone whom attaches a value to gold, it would have to have a value unto itself (intrinsic) and therefore if that's your claim, then you'd have to support that claim with evidence. The only evidence I see in establishing an alleged 'intrinsic value' of gold would have to be to provide the specific value gold had at 10,000,000, 10,000, 1,000, 100, 10 years ago and any other point before, in between, or after than. Otherwise you have not shown intrinsic value exists.

And in what unit of measurement would you put a value on something that old?

Since I am not making the claim that gold or silver has intrinsic value (a worth that would require no people) I am not the one who has to decide what unit of measure...that's for those who claim that gold/silver has intrinsic value to decide. But without the establishment of precise values before humans began to attach value to these things, then the "gold/silver has intrinsic value" claim falls flat on its face because there's no evidence provided for it having intrinsic value. (That doesn't at all mean that gold or silver had no intrinsic properties) That's been the point; without humans attaching an extrinsic value to gold, fiat money, sticks, chocolate diamonds, pretty seashells, silver, dog feces, etc, etc, etc, etc, etc then these things have no intrinsic value. They get their value from us, whether collectively or individually, its us....that's extrinsic, not intrinsic.

Utility 'intrinsic value'
Intrinsic properties 'intrinsic value'

What about buildings that are thousands of years old, do they have no intrinsic value today if we can't estimate value when initially built and utilized?

The value they had or have, whether thousands of years ago or today, is a value that humans attach to the buildings. That value has always been and always will be an extrinsic value. Utility (the usefulness of the thing being utilized) may be used to determine value / worth, but utility 'intrinsic value'. So, for example, you may say that the tiny 5,000 year old dilapidated stone building is useful to you because you can turn it into a small museum and make money collecting proceeds and ergo you can then say that small building has value to you....but it may not to me or to 8 billion other people. The value that building has is the value you attach to it...it's an extrinsic value because without you attaching value to it, it has no value unto itself. The same thing can be said for anything at all. The value the thing has is the value we extrinsically attach to it. Without us, the thing only has potential utility and intrinsic properties or qualities, but never intrinsic value...value comes from us.



.

 

[Sonic]

Bullion Baron took the words out of my...hands. Mmissinglink is correct to the extent of his definition of value, but then you can break down that word too. The very fact that these metals are useful to us makes them valuable. If they served no other purpose but money, then their value would be purely extrinsic, but that is not the case.

 

[elninjo]

We unequivocally know this because intrinsic means "unto itself" or "inherent" which is defined as 'existing permanently within something.'

Inherent is defined as
Existing as an essential constituent or characteristic; intrinsic.
http://www.thefreedictionary.com/inherent

Intrinsic is defined as
1. Of or relating to the essential nature of a thing; inherent.
http://www.thefreedictionary.com/intrinsic

1.
belonging to a thing by its very nature:
the intrinsic value of a gold ring.
http://dictionary.reference.com/browse/intrinsically

belonging to or part of the real nature of something/somebody
http://www.oxfordlearnersdictionaries.com/definition/english/intrinsic

Intrinsic Value in Ethics is defined as...

Intrinsic value is an ethical and philosophic property. It is the ethical or philosophic value that an object has "in itself" or "for its own sake", as an intrinsic property. An object with intrinsic value may be regarded as an end or (in Kantian terminology) end-in-itself.
http://en.wikipedia.org/wiki/Intrinsic_value_(ethics)

Intrinsic Value in Finance is defined as..
In finance intrinsic value refers to the value of a company, stock, currency or product determined through fundamental analysis without reference to its market value. It is also frequently called fundamental value. It is ordinarily calculated by summing the discounted future income generated by the asset to obtain the present value.. It is worthy to note that this term may have different meanings for different assets.
An intrinsic theory of value (also called theory of objective value)
http://en.wikipedia.org/wiki/Intrinsic_value_(finance)

Defining "intrinsic value" is and has long been a very debatable issue as is "subjective value" vs "objective value"

 

[mmissinglink]

Just because it has become customary or conventional at some point 2 minutes ago or 100 years ago to use a term in a certain way, doesn't mean that I have to agree with its use. I don't accept convention when convention is wrong.

I am open to the usefulness or utility of something like gold being described as a "fundamental value" but it doesn't make sense to call that utility "intrinsic value" because value is what something is worth to you or I. Without you and I, the value of that thing to us is an empty set. Sure, there's intrinsic properties that don't require us and there's even potential utility that doesn't require us. But value is what something is worth....that's always extrinsic because we always have to have a valuer...you and I.

If we want to express that gold and silver have great utility or usefulness to humans, then we should express it exactly that way...not that these things have alleged intrinsic value.

Anyway, we should probably respectfully agree to disagree because I am firm in my position on this.

Neat discussion.



.

 

[alor]

the permanent head damage of intrinsic value

PHD of intrinsic value LOL !

 

[Sonic]

I'm enjoying the discussion as well. I think we're starting to find some middle ground. So the perceived value of something comes down to what it is worth to an individual. If we're talking worth in a purely economical way then the fundamental value of said thing may be worth said amount for said individual. If metals are extrinsic then what are some examples of things that have intrinsic value? Food? If we're again going off what it is financially worth to someone, then it has value. If we're going off what it is actually worth to the person (a meal) then it has value in that sense too. You can use precious metals in these examples as well.

 

[mmissinglink]

I'm enjoying the discussion as well. I think we're starting to find some middle ground. So the perceived value of something comes down to what it is worth to an individual. If we're talking worth in a purely economical way then the fundamental value of said thing may be worth said amount for said individual. If metals are extrinsic then what are some examples of things that have intrinsic value? Food? If we're again going off what it is financially worth to someone, then it has value. If we're going off what it is actually worth to the person (a meal) then it has value in that sense too. You can use precious metals in these examples as well.

I don't disagree that value can not have different meanings in different contexts. So when most people talk about the value of an asset or commodity like an ounce or kilo of silver or gold, they are usually referring to the worth of that unit. The worth, because most people who buy, sell, or hold bought pm's for a while will eventually have to sell that metal in a denominated currency like the AUD or USD or whatever currency of the seller's choosing. Doomsdayers who believe in a global currency meltdown have different ideas...but these folks are the minority based on my experience.

So we can say that in most cases the "value" of pieces (bars, rounds, whatever) of gold and silver is a matter of what they are worth in the marketplace. That definition of value has to be extrinsic...determined by whomever is desiring to own it. The fact that silver or gold has usefulness to some humans today is just that. Dog feces, pretty seashells, fiat money, and chocolate diamonds may have usefulness to some people too. ANYTHING can have usefulness to people at different times. Does that mean that I should express that utility in all those things as "intrinsic" worth or value? I don't think so because the worth that is attached to any and all of these things is requiring people like you and I...and to me that's an extrinsic factor...the blob of silver and the pile of dog feces have no value unto them self other than the worth we attach to them. The fact that they may have utility to you or I or someone else is not a matter of their own worth.

If silver has intrinsic properties, then we can express that as such but I don't see how it makes much sense to conflate that to meaning it has intrinsic worth / value.

If I were to say I value that blob of silver or that pile of dog feces, does that mean that both are definitively "valuable" or that both definitively have alleged "intrinsic value"? The fact that they have different intrinsic properties does generally have a bearing on their perceived value but those intrinsic properties are not the value itself. The value is what we give these things...that's extrinsic, even though the properties are intrinsic.



As for the value of food which is required and necessary for life / to exist, I think it may fall under a different meaning of "value" because the context may be different. I will get back to this discussion, urgent things require my attention.


.

 

[Sonic]

I can see your point of view but within the context you're using, I cannot think of anything that has intrinsic value. Maybe the word was never intended to be used for physical items. If that's the case then we shouldn't use the word extrinsic either. If some "thing" is extrinsic then other things would have to be intrinsic. If we're talking the financial worth or value of a thing to a person or an economy, then all things are extrinsic. I dunno, I think we're just going round and round now.

 

[BeHereNow]

I would use the term to say things have intrinsic value to individuals, but that does not give them some universal value. When stackers use the term, they mean universal value, as I understand it.
A wedding ring of a grandparent might have great intrinsic value to me, for others, just another bling.
Holy relics of various religions have intrinsic value to certain groups within the religion, to others, nothing special.