Is a product really worth what someone will pay for it?

I recently had reason to compare the work of people at opposite ends of the work-related pay scales that our society has developed.  At one extreme are those who do high level roles within organisations and at the other end are people who care for the sick, elderly, disabled and otherwise vulnerable in our society.  The former tend to earn large amounts of money.  For example, the high-level executive earning a six-figure salary or even the Chief Executive earning millions.  The latter often earn minimum wage or not much more.

Millions?, you might ask.  What can anyone do in a year to justify an annual salary of millions?  It may seem obvious why the work of a Surgeon or an Airline Pilot may justify a six figure salary.  However, with respect to many of those who earn much more for their role in large organisations their work is often nebulous, e.g. in reality leadership may be dependent to some extent on the performance of deputies.  Becoming a Surgeon or an Airline Pilot requires achieving clear markers and maintaining an objectively measured level of performance.  For other organisational roles, gaining the position may be grounded on “networking” skills and there is much media evidence of performance not being commensurate with reward.

What is the relevance of all of this to a PhD researcher considering their future career.  Well, a fundamental consideration is the salary and other rewards associated with any given opportunity.  The examples I refer to above are at the extremes, either very well paid or very poorly paid.  The point I strive to make is that the relationship between pay and “contribution to society” is not always clear.  Within the context of expectations, one’s own and key others such as parents, contemporaries etc…, salary is a consideration when considering a future career direction.  Should I go for something I am passionate about, which is not relatively well paid or should I go for something better paid but may not be my heart’s desire.

Salary is often associated with status, which may impact how the world views us, the kind of house we live in and even the mate we attract.  However, when old age comes the only one who will have travelled any person’s life-road is that person.  Rather than close this blog input myself I will leave you with one of my favourite poems, “The Guy in the Glass”, by Dale Wimbrow.

When you get what you want in your struggle for self,
And the world makes you King for a day,
Then go to the mirror and look at yourself,
And see what that guy has to say.

For it isn’t your Father, or Mother, or Wife,
Who judgement upon you must pass.
The feller whose verdict counts most in your life
Is the guy staring back from the glass.

He’s the feller to please, never mind all the rest,
For he’s with you clear up to the end,
And you’ve passed your most dangerous, difficult test
If the guy in the glass is your friend.

You may be like Jack Horner and “chisel” a plum,
And think you’re a wonderful guy,
But the man in the glass says you’re only a bum
If you can’t look him straight in the eye.

You can fool the whole world down the pathway of years,
And get pats on the back as you pass,
But your final reward will be heartaches and tears
If you’ve cheated the guy in the glass.

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Martin Coffey

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Career Management Skills Developer, Researcher Development Team.

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2 responses to “Is a product really worth what someone will pay for it?”

  1. Bill Greene

    It would seem to me that the free market (based on the aggregated individual decisions of dozens to millions of people) is the only sure way to arrive at the actual value of any item or activity that can be monetized. When I apply for a job, the market has already valued that activity, according to what employers are willing to pay for an employee in that position. The same goes for other items — when I look for a toaster, the market has already valued that item, according to what most people are willing to pay for it. There is no “intrinsic” value in any item *or* activity, and its value is certainly not determined by the labor required to produce it (except as an initial cost that must be factored in on the way to arriving at the final price). Is the CEO of Coca-Cola worth a $14.6 million salary? Not in my opinion — but the people who run the company obviously think he’s worth a lot more than what I think he is. Is a 1914 Patek Philippe Pocket Watch worth a $1 million price tag? Not in my opinion — but the people who appraise items on Antiques Roadshow obviously think it’s worth a lot more than what I think it is.

    All of this applies in like manner to the purchase of an item (price), the selling of one’s time to an employer (wage rates), or to the lending of money (interest), or to any other transaction involving goods or services. Value is subjective; there is no such thing as a “just” price that can be arrived at scientifically or politically. As economist F.A. Harper noted, Vilfredo Pareto (who is best known for the “80/20 rule”) gave “a vivid illustration of the marvelous way the free market resolves the complexity of varied values and widely differing opinions of persons in the market place. He calculated that for a small, simple society of only 100 persons trading only 700 goods and services, it would require the solution of 70,699 simultaneous equations in order to equate supply and demand in the manner the free market does so easily. If one recalls how difficult is the task of solving only two or three simultaneous equations in algebra class, he will appreciate the task of solving 70,699! Not only that, but the equations keep changing all the time for any number of reasons, including the ‘whims’ of every trader. Yet this complex equation is easily solved by free exchange among persons who may be unable to count and who may not even read in some instances.”

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