The value of water: in 2017 Pope Francis had the Vatican fountains turned off when months of unexpectedly dry weather threatened the water supply from the hills to the citizens of Rome.
Today we remember Saint Chad, bishop of Lichfield, who used to stand in cold water to say his prayers. The River Trent and its tributaries were clean then. This post is an extract from an article by Shamus Khan in The Hedgehog Review, Summer 2021. Khan helps us understand entrenched social inequality as well as the power of advertising, product placement and influencing. This paragraph shows that economists don’t always speak the same language as the rest of us, and don’t always value things according to their usefulness. A pause for reflection: how much does it matter to me that children in some parts of our world die because they do not have safe water?
Meanwhile, Fiji water – water imported from Fiji, sells at around £2.00 per litre.
Born to Norwegian immigrants in 1857, Thorstein Veblen was one of several academically inclined children in his family. He studied economics at Carleton College, largely under the tutelage of John Bates Clark, a pioneer of what has become an almost axiomatic concept in economics, “marginal utility.” Veblen would build on Clark’s approach—understanding that the value of an object lies not simply in its “total utility,” that is, its usefulness to the world, but also in its “marginal utility,” the subjective satisfaction it gives to its consumer. If an object’s value were determined by its total utility, water might be the most expensive object in the world, since none of us could survive without it. Yet it is not, in part because there is a lot of it, but also because it provides us with little marginal utility. Companies today that charge a lot for bottled water seek, through marketing, to increase water’s marginal utility, which is to say the sense that we are consuming, with our Fiji water, something special.
And what about the marginal utility of a factory worker who actually makes something useful, but is on the minimum wage?
To support people who are bringing clean water to those who do not yet enjoy it, please go to https://www.wateraid.org/uk