The second principle is that all value is relative. In a material sense, one man’s trash is another man’s treasure. At a more personal level, how we choose to spend our free time and energy also reflects differences in value. Whether we choose to play or watch sport, to be with family or friends, to watch a movie, read a book, or play computer games. All of these choices reflect our values, and all of these choices have an economic impact.
But we are all subject to circumstances. Indeed there is a considerable amount of research supporting the overriding impact of circumstances on the choices we make. There are two key sets of circumstances that frequently override personal preferences.
The first of these is needs based. Those who have studied the social sciences would be familiar with Maslow’s hierarchy of needs. For economic purposes these can be simplified to three tiers:
- survival,
- stability, and
- the pursuit of happiness.
Survival is prioritised ahead of stability, which is prioritised ahead of the pursuit of happiness. This will be explored in more detail in later chapters when we explore the collective effort being applied to activities within these tiers and how they have a major impact on the health of an economy.
The second of these is life stage. This is a relatively simple concept. What you value as a young child is different to what you value as a teenager. This changes again as you move through life as a young adult, as a single person, as part of a relationship, as a parent. It changes when you are part of the workforce, and when you retire. The collective impact of these different values, and how long we spend in each of these life stages, also has a significant impact on the economy.