Value: The Economisation of Ethics.

Simmels Theory of Value in The Philosophy of Money

Ilja Celine Postel

Abstract
The concept of value has a dual meaning: it can either denote ethical principles, or denote
economic worth. In the more original notion of value, the ethical, two types of value can be
distinguished: intrinsic and instrumental. Something that is valued intrinsic is valued in itself
and something that is valued instrumental is valued for the pleasure it provides. According to
Simmel, values are relative: they consist of relations between valued things. In Simmels
theory of values, values are part of a third world between object and subject. A value is not
a quality of an object: in the physical world there is no logic in how valuable things come into
existence, nature plays no role in the allocation of value to objects. A value neither is a
subjective construction: the individual barely has any power over how objects are values. In
economics, value usually indicates something we value for instrumental reasons. In an
economic society, we acquire things we value by exchange. As the system Simmel describes
is based upon relations, we can exchange valuable things we have for different valuable
things we desire. It is only possible to desire things (and therefore value them) if we have a
certain distance from the object. We cannot coincide with objects if we want to establish their
value, economic demand for certain goods is only possible if we are able to desire these
goods because they are not already in our possession. This exchange Simmel calls the
sacrifice: the economic transaction is always the exchange of two equally valuable things.
Money is introduced into the economy as a means of exchange: it is an expression of value to
make the exchange easier. Money is the autonomous expression of value; it represents the
abstract values in a physical way. By assigning money value as a quality, the risk of an
artificial society emerges: value is no longer an effect of certain qualities found in nature, but
something artificial found the financial world has usurped.

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1. Introduction
One of the most fundamental notions when we think about economics is value: in daily life
we measure things based on the value assigned to them, often either in time or money. Value
is a concept with many aspects, to some extent it is individual (what I value highly is not
necessarily what you value highly), but there are also cultural and global aspects to the
notion. In a world where nearly everything is for sale, it becomes the question how we
establish a price for the objects we are willing to buy or sell. The prices we are willing to pay
for certain scarce goods not only differ personally, but also culturally, since value is a
concept deeply connected with both ethics and tradition. In this paper, however, I would like
to look at the notion of value from a more philosophical-anthropological perspective and go
back to a more fundamental level: what is value and what does it mean for a subject to value
something? I will start with looking at the more fundamental aspects that are particularly
related to ethics and philosophical anthropology and thereafter aim to connect this with the
economic notion of value.
The question as to what value really is, like the question as to what being is, is
unanswerable.1Although these are fundamental philosophical questions, I will aim to at least
clarify the notions with the help of Simmels work The Philosophy of Money2. In this work
he does not only look at money as a neutral means of exchange, but starts out with a
metaphysical analysis of what value means. Simmels theory is a neo-Kantian one and
therefore quite different from the more dynamic views that are dominant today. Using
Simmels analysis of value in the first chapter of The Philosophy of Money as a basis and
occasionally reverting to more fundamental philosophical notions and theories, I hope to at
least clarify the notion of value in (economic) human life by isolating the concept the context
of daily life and look at it from different angles.
In this paper, I will focus on the first chapter of The Philosophy of Money in which
Simmel takes a look at what value is and how value is connected to a currency. I will firstly
explore the difference between intrinsic and instrumental value (the latter being the more
interesting for economics) from a more ethical perspective; and secondly focus on the
relation between values and objects; and values and subjects (are values a human
construction or are they found in the objects?) and finally I will turn to the more economic

George Simmel, The Philosophy of Money (London: Routledge, 1978), pp. 62.
George Simmel, The Philosophy of Money (London: Routledge, 1978).
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aspect of values: determining a scale of values, exchanging valuable goods and money as an
expression of value.
2. Intrinsic and Instrumental Value
In our life we value certain things, but this can have many different meanings: nowadays
value is a dual concept that has both a monetary and an ethical meaning. Value, in the most
original sense, seems to be an ethical term: what I value in life, I consider being good and
desirable. This is the non-economic approach of the notion of value. When I say I value
honesty, I am referring to a virtue of character that I consider to be good and to be preferred
(over dishonesty). These are called the intrinsic goods: things that I consider to be good in
themselves, they do not rely on certain objects or situations to be good, they are good (and
therefore desirable and valuable) as they are. There is no other good to be derived from it, nor
are it the effects that for me are valuable, it is the thing in itself and for itself. In the concept
of value, we can distinguish two kinds of values. Besides these intrinsic values, there are also
instrumental values.
the central question philosophers have been interested in, is that of what is of
intrinsic value, which is taken to contrast with instrumental value. Paradigmatically,
money is supposed to be good, but not intrinsically good: it is supposed to be good
because it leads to other good things: HD TV's and houses in desirable school districts
and vanilla lattes, for example. These things, in turn, may only be good for what they
lead to: exciting NFL Sundays and adequate educations and caffeine highs, for
example. And those things, in turn, may be good only for what they lead to, but
eventually, it is argued, something must be good, and not just for what it leads to.
Such things are said to be intrinsically good.3
Philosophers have been thinking about the intrinsic good for thousands of years. To even
begin analysing what these intrinsic goods may be lies far beyond the scope of this paper. To
follow the general intuition, we could state that the intrinsically good is found in traits such as
honesty, generosity, et cetera: as they lay in the spectrum of ethics most of them are traits
connected to human character or human acting. They are in no way connected to the

Mark Schroeder, "Value Theory", The Stanford Encyclopedia of Philosophy (Summer 2012 Edition), Edward
N. Zalta (ed.), <http://plato.stanford.edu/archives/sum2012/entries/value-theory/>.
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spectrum of economics, since they are not instrumental goods and cannot be bought: it is
impossible to put a price on traits like honesty or loyalty: they are not for sale.
That which is intrinsically good is non-derivatively good; it is good for its own sake.
That which is not intrinsically good but extrinsically good is derivatively good; it is
good, not (insofar as its extrinsic value is concerned) for its own sake, but for the sake
of something else that is good and to which it is related in some way. Intrinsic value
thus has a certain priority over extrinsic value. The latter is derivative from or
reflective of the former and is to be explained in terms of the former.4
In our acting as economic agents, most people desire things for the good they derive from it.
Intrinsic goods are not objects you can buy: they are often abstract concepts such as truth or
respectfulness. The things that are derivatively or instrumentally good, however, can be
good because of what we derive from it and therefore may be things that can be acquired
through economic transactions.
3. Value and Objects
Der Wert entsteht nicht nur aus den Wechselwirkungen zwischen Menschen,
sondern er ist zugleich eine Kristallisation dieser Wechselwirkungen, die die
Gesellschaft als Proze der Vergesellschaftung und allgemeiner als Tausch
ausmachen.5
According to Simmel value does not come into existence through human doing, but is rather
a third world next to the subject and the object. For this reason Simmel describes the
understanding of value as a metaphysical category: a value is something that is between us
and the objects.6 Value is relative. Simmels notion of relative requires some explanation
here. For Simmel, relativity means to have a certain relation to each other, not the relativity
of truth and falsity: da Wahrheit eine Relation von Inhalten zueinander andeutet, deren
keiner fr sich sie besitzt, gerade wie kein Krper fr sich schwer ist, sondern nur im

Zimmerman, Michael J., "Intrinsic vs. Extrinsic Value", The Stanford Encyclopedia of Philosophy (Spring
2015 Edition), Edward N. Zalta (ed.), <http://plato.stanford.edu/archives/spr2015/entries/value-intrinsicextrinsic/>.
5
Christian Papilloud, Wert, in Georg Simmels Philosophie des Geldes, ed. By Ottheim Rammstedt (Frankfurt
am Main: Suhrkamp, 2003), pp.168.
6
Ibid.
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Wechselverhltnis mit ein anderem.7 Value, thus, is a metaphysical system located between
the object and the subject based on relations between objects. This way of looking at value
makes intuitive sense: although value is a human concept, it is found in objects and it is a
relation (we can speak of more valuable than and less valuable than).
In a way we can say that values are independent from the subject: value is found in
what we may rename the metaphysical spectrum of values. Since value is something that
belongs to both subjects and objects, it is located in some sort of metaphysical third world
and it is not given in nature: nature seems to be completely indifferent to the value humans
attach to certain objects.8
the relation between these series is completely accidental. With the same
indifference, nature at one time offers us objects that we value highly, at another time
withholds them. The occasional harmony between the series, the realization through
the reality series of demands derived from the value series, shows the absence of any
logical relationship between them just as strikingly as does the opposite case.9
In other words: nature does not care about human values. This seems something unnecessary
to ascertain (that nature doesnt surround around humanity seems common sense: there is no
teleology), but it is not superfluous when we try to follow Simmels theory of what values
actually are. Value is not something that is found in objects since it is not awarded by nature,
but on the other hand it is something that a subject has very little participation in.
Reality and value are, as it were, two different languages by which the logically
related contents of the world, valid in their ideal unity, are made comprehensible to
the unitary soul, or the languages in which the soul can express the pure image of
these contents which lies beyond their differentiation and opposition.10
After establishing that values are not found in objects, we can conclude that being valuable
is not a quality that an object has. In this argument, Simmel follows Kant on how being is not
a quality: if I imagine a thing, the existence or non-existence doesnt add anything new, if it
did, I would be imagining a different thing. In the same way, something is valued because of

Klaus Christian Khnke, Der junge Simmel in Theoriebeziehungen und sozialen Bewegungen, (Frankfurt am
Main: Suhrkamp, 1996), p. 479.
8
George Simmel, The Philosophy of Money (London: Routledge, 1978), pp. 60.
9
Ibid.
10
Ibid, pp. 62.
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its qualities: value is never a quality of the objects, but a judgement upon them which
remains inherent in the subject.11 Just like how being is not a quality but rather the effect of
something having qualities, value is not a quality but rather the effect of an object having
certain qualities or certain qualities appearing together in an object, after which the object
exists in relation to others by virtue of these qualities.
It seems safe to say that, before the twentieth century, most moral philosophers
presupposed that the intrinsic goodness of something is a genuine property of that
thing, one that is no less real than the properties (of being pleasant, of satisfying a
need, or whatever) in virtue of which the thing in question is good.12
The history of philosophy has not always looked at value in the way Simmel has. Although
philosophers engaging in philosophical-anthropology rarely found consent in what an
intrinsic good is, being valuable has been considered a quality or property in older
philosophy, an opinion both Simmel (in his metaphysical approach to values as relations) and
the modern-day economy (with ever-changing values for its goods) have successfully proven
wrong. It seems that one of the effects of capitalism and consumerism (although I have to
note in Simmels time consumerism did not really exist) is exactly the realization that value
cannot be a quality, nor a property in a market-based world where value is a fluctuating
phenomenon.
3. Value and subjects
When it comes to values and the subject, Simmel has an interesting theory. Valuing an object,
in this theory, is only possible if there is a certain distance between the object and the subject:
So long as man is dominated by his impulses the world appears to him as an undifferentiated
substance.13 In other words, as long as we strive towards instant gratification and focus only
on the short moments of pleasure derived from certain products and goods, we fail to value
objects for their exceptional qualities: if we merely eat to fill our stomach, we fail to
appreciate the refined food we may be eating and fail to value it. We need a certain distance
to objects in order to value them: Solange die ungebrochene Einheit zwischen Objekt und

11

Ibid, pp. 63.

Zimmerman, Michael J., "Intrinsic vs. Extrinsic Value", The Stanford Encyclopedia of Philosophy (Spring
2015 Edition), Edward N. Zalta (ed.), <http://plato.stanford.edu/archives/spr2015/entries/value-intrinsicextrinsic/>.
13
George Simmel, The Philosophy of Money (London: Routledge, 1978), pp. 70.
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Subjekt andauert, kann den Dingen keinerlei Wert verliehen werden.14 If we remember that
value is defined as an effect of certain qualities, it follows that we can only value objects if
we have the distance to perceive the specific qualities of an object: to value an object, the
subject cannot coincide with this object.
value does not originate from the unbroken unity of the moment of enjoyment, but
from the separation between the subject and the content of enjoyment as an object that
stands opposed to the subject as something desired and only to be attained by the
conquest of distance, obstacles and difficulties.15
It is not exclusively the fact that we do not coincide with an object that allows us to value it.
It is the desire of something that you cannot (directly) have that leads to seeing it as valuable:
Objects are not difficult to acquire because they are valuable, but we call those objects
valuable that resist our desire to possess them.16 If we only aim at fulfilling our direct
desires with whatever is available, without having any preference of what gives us pleasure,
things that take effort (time or money) to attain will not be valued for their specific qualities.
Furthermore, if a subject constantly resides in this unbroken unity of enjoyment of an
object, it is only the pleasure derived from it that will be experienced by the subject, not the
specific qualities some objects have over others. If we would apply this statement to
intersubjective relations, we could argue that a man only chasing physical pleasures may not
value different kinds of women for their specific characteristics, but only for the physical
pleasure they bring.
The differences in valuation which have to be distinguished as subjective and
objective, originate from such variations in distance, measured not in terms of
enjoyment, in which the distance disappears, but in terms of desire, which is
engendered by the distance and seeks to overcome it. At least in the case of those
objects whose valuation forms the basis of the economy, value is the correlate of
demand. Just as the world of being is my representation, so in the world of value is
my demand.17

14

Christian Papilloud, Wert, in Georg Simmels Philosophie des Geldes, ed. By Ottheim Rammstedt (Frankfurt
am Main: Suhrkamp, 2003), pp. 170.
15
George Simmel, The Philosophy of Money (London: Routledge, 1978), pp. 66.
16
Ibid, pp. 67.
17
Ibid, pp. 69.
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The relationship Simmel sketches between the subject and the object makes it easy to think
that values are purely subjective (I value what I desire), but one should be cautious in
thinking this. As I explained earlier, values are found in a metaphysical spectrum, a kind of
third world between the objective and the subjective. In economics, however, these values
become objectified, as there is little power for the subject in determining value.
Just as we represent certain statements as true while recognizing that their truth is
independent of our representation, so we sense that objects, people and events are not
only appreciated as valuable by us, but would still be valuable if no one appreciated
them.18
Value is found as a relation between all physical objects and qualities in the world. A
person not valuing particular objects and their qualities does not undo the entire system of
values in the world. The relations that constitute value do exist independent from subjects:
just as statements remain true if there is no one to find out their truth, things remain valuable
even if there is no specific subject currently desiring it.
the world is valuable no matter whether these values are experienced consciously or
not. This extends all the way down to the economic value that we assign to any object of
exchange, even though nobody is willing to pay the price, and even though the object is
not in demand at all and remains unsaleable.19
4. Economic Value
If one turns to a dictionary to discover the meaning of value, the nouns and verbs lead us to
two main understandings of the concept: firstly, the ethical approach I have explained in the
second paragraph (the intrinsic good) and secondly the notion of value that is connected to
economics more closely (the instrumental good). From a strict economic perspective, value
can be described as the worth of a certain good for an economic agent.
That which is extrinsically good is good, not (insofar as its extrinsic value is
concerned) for its own sake, but for the sake of something else to which it is related in
some way. For example, the goodness of helping others in time of need is plausibly

18
19

Ibid, pp. 67.

Ibid, pp. 67.
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thought to be extrinsic (at least in part), being derivative (at least in part) from the
goodness of something else, such as these people's needs being satisfied, or their
experiencing pleasure, to which helping them is related in some causal way.20
These extrinsically or instrumentally good things are valued for the effect that is derived from
them, and the economic concept of value then becomes the relation of value to other objects.
Value is the price that I want to pay for a product of which I derive a certain pleasure, or the
amount of free time I want to give up in order to adopt a certain lifestyle. The objectified
value is the correlate of the demand for a certain product: market prices rise if economic
agents value something highly and thus the objective value rises.
In the context of economics, we consider value to be the worth I assign to
something, or, a more visual description: the price tag I attach to something. I may be
willing to pay more for an HD TV because I value the bright colours and it gives me a more
pleasurable entertainment experience, but it is directly clear that this kind of valuing (I desire
the entertainment experience, so I buy a more expensive TV) is wholly different from
valuing something intrinsically (I value honesty since the truth is good in itself). To say that
we value luxury goods as being intrinsically good would make our entire ethical system look
like a joke.
It may be said, therefore, that the value of an object does indeed depend upon the
demand for it, but upon a demand that is no longer purely instinctive. On the other
hand, if the object to remain is an economic value, its value must not be raised so
greatly that it becomes an absolute. The distance between the self and the object of
demand could become so large through the difficulties of procuring it, through its
exorbitant price, through moral or other misgivings that counter the striving after it
that the act of volition does not develop, and the desire is extinguished or becomes
only a vague wish.21
The distance between subject and object that establishes value, at least in an
economic sense, has a lower and an upper limit; the formula that the amount of value

20

Zimmerman, Michael J., "Intrinsic vs. Extrinsic Value", The Stanford Encyclopedia of Philosophy (Spring
2015 Edition), Edward N. Zalta (ed.), <http://plato.stanford.edu/archives/spr2015/entries/value-intrinsicextrinsic/>.
21
George Simmel, The Philosophy of Money (London: Routledge, 1978), pp. 72.
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equals the degree of resistance to the acquisition of objects, in relation to natural,

productive and social opportunities, is not correct.22
Even in the metaphysical approach to value Simmel provides, there is room for supply and
demand. It is distance that creates the desire for something, but a distance too large will
diminish the desire and what is left is a vague wish. This is where we find the supply and
demand: if the price is set too high, the desire of an economic agent will fade, and it is only a
vague wish that will remain. There is an upper limit to the price I am willing to pay for
something I value in order for it to stay a lively desire. This also explains why there is a
market for certain luxury goods that seem entirely unnecessary to the average individual: the
well-off parts of society manage to keep their desires alive because the sacrifices they need to
make to acquire a certain good are relatively much smaller. For these reasons, although the
metaphysical system of values consists of relations, they are not always consistent. Some
things may be so rare in nature that they would remain undesired if a subject would be asked
to pay the price that would logically follow from the other market prices set. In other words,
if scarce goods become unsellable because there is no demand for them (the desire for these
objects is a mere vague wish), prices will drop to the level where there is demand.
Simplifying this notion, I will add the following example: at the moment I may desire
to move back to Amsterdam after receiving my degree in Philosophy, but as soon as I realize
that I could only afford to live in a cupboard in a city with such high rents, I may start to
desire a nice studio in the cheaper suburbs and my desire of an apartment by the canals
becomes a vague wish I occasionally daydream about. This is an example of how a high
demand (and as a result skyrocketed rents) will lead for some subjects to no longer desire
certain things. Following the logic of scarcity, some villages may be so small that, if the
system of valuing would be consistent, real estate would be so expensive that the villages
would remain empty. Obviously, this is not the case and a lower non-consistent value is set.
5. Exchange and sacrifice
Die Logik des Opfers erlaubt zu verstehen, wie Wert am Aufbau der Persnlichkeit
und der sozial-kulturellen Welt teilnimmt, wie er uns die Pluralitt der Gegenstnde in
deren Begehren, Auswhlen und Gebrauchen erffnet. Die Opferbeziehung in bezug
auf Wert macht einen Proze der Personalisierung aus, die den einzelnen dazu fhrt,
22

Ibid.
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sich selbst als Ich zu konzipieren, zu benennen und die Existenz von ueren Dingen
anzuerkennen, die nicht zu diesem Ich gehren.23
To gain whatever we desire, we need to exchange: our modern society is deeply economic,
and our desires are rarely fulfilled for free. Value leads to the Erfahrung des Opfers: we
give up things we value for other things that we desire more.24 This can, in modern society,
be as simple as giving up time (by working) to acquire the means to usurp things we desire
(these means being money, so we can buy things). For Simmel, value and sacrifice are
closely linked: we always need to sacrifice something in order to fulfil a desire (and
appropriate something we value). Analogously to the upper price limit that a good has, I
may not want to sacrifice all my time by working three jobs in order to be able to afford
something I desire, I may settle for something similar which does not require a sacrifice as
big, or I will let my desire for a certain good fade to a vague wish.
The metaphysical spectrum of values leads to a Logik des Tausches25, in which we
objectify the value of something. Value, as I have already described above, is
fundamentally abstract: it is not a quality, but rather an effect of qualities that exists in
relations. In order to attain what we value, we trade. It is in this trading that the sacrifice will
be experienced and that value will be objectified: it is in trade that an economy comes into
being and an objective value will be established.
In an economy of trade value is no longer experienced as subjective: although the
price of an object is a product of supply and demand, the individual does not have any real
influence on the value (in this case the price) of a certain product. According to Simmel,
values are part of the metaphysical spectrum of values and therefore never purely subjective.
In establishing an economy a certain market value is set and therefore the objective value
becomes known to man. However, in exchanging goods and striving to fulfil ones desires, a
subject can subjectify the objectified values. I can choose to exchange a certain amount of
time for a certain amount of money by working a certain job and I can choose to exchange
this money for certain things I value. Although I do not set the value of an object myself, I
have the power to make the values my own and adjust my attitude towards these values.26

23

Christian Papilloud, Wert, in Georg Simmels Philosophie des Geldes, ed. By Ottheim Rammstedt (Frankfurt
am Main: Suhrkamp, 2003), pp. 170-171
24
Ibid.
25
Ibid, pp. 171.
26
Ibid, pp. 171.
11

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6. Exchange and money

In essence, history has seen a battle between moneys role as a store of value (which
requires a restricted supply) and its role as a means of exchange (which can require
the creation of more money).27
To make the exchange easier, we no longer exchange goods directly. Over the past thousands
of years we have created the habit of using some kind of currency: from shells and rare
spices to precious metals, in history humanity has used a wide variety of objects to not only
exchange goods, but also to express value.
When we think about how we come to the moment of exchange of what is considered
to be valuable, we realize that this is not an easy task and often even an unpleasant one if we
cannot make use of our modern monetary system. In a society as complex as ours, based on a
global economy, it is extremely hard (if not impossible!) to imagine going back to a world
where we exchange goods to fulfil our desires without currency. The introduction of money
seems to be one of the reasons our current economic system, based on consumerism and
individual choice, can flourish today: exactly because we use a neutral currency, an
individual is able to choose from a wide range of similar products to fulfil our particular
desire on a certain moment.
If the economic value of objects is constituted by their mutual relationship of
exchangeability, then money is the autonomous expression of this relationship.
Money is the representative of abstract value.28
Currency is, as Simmel describes it, pure exchangeability: it is the only thing that makes it
possible to exchange as easily as we do today. Obvious is that it creates a more global market
(if I want to acquire a good, I can exchange it with money and I dont need to find someone
27

The Economist, Means of exchange in The Economist <http://www.economist.com/news/books-andarts/21643036-monetary-systems-have-always-been-imposed-sovereign-means-exchange> [consulted on

29/07/2012]
28
George Simmel, The Philosophy of Money (London: Routledge, 1978), pp. 120.
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who needs whatever else I may be offering); furthermore it allows us to create a clear and
transparent system to express value, since all value will be expressed in one and the same
currency. Relations in terms of value between different objects are complicated to express
without a common unit to express these values. Thanks to the introduction of money, the
metaphysical spectrum of values becomes transparent and objects become comparable.
Das Geld Symbolisiert die Relativitt des Werts, indem es sich als der einzige Wert darstellt,
von dem die anderen Werte mehr und mehr abhngen.29 In other words, the role of money is
not limited to being a means of exchange. If we remember Simmels definition of relativity,
consisting of relations, it becomes clear that when we think of the economic definition of
value (the price tag), one of the key advantages of having a currency is exactly that one can
express these values in a clear and distinct way. Using money to both express value and serve
as a means of exchange, makes that money also carries this value, but without the initial
qualities of the object that caused the value.
Wie Geld Relation hat und ist, hat Geld Wert und ist Wert in der modernen
monetren Gesellschaft. In diesem Sinne ist Geld das Symbol fr jene Austausbarkeit
und daher fr jene Wechselbeziehungen zwischen Menschen und Dingen.30
In the beginning of this paragraph I cited the two uses for money: to contain value and as a
means of exchange. Money that contains value is, for instance, golden coins: they represent
the value they have and can also be used to trade objects easily. Money as a means of
exchange is for instance bank notes or obligations: the object in itself represents many times
the value it has in itself.
Money is simply that which is valuable, and economic value means to be
exchangeable for something else. All other objects have a specific content from
which they derive their value. Money derives its content from its value; it is value
turned into a substance, the value of things without the things themselves.31
It becomes more than clear that the kind of money that The Philosophy of Money is based
on, is money as a means of exchange: money is not value, but primarily the expression of

29

Christian Papilloud, Wert, in Georg Simmels Philosophie des Geldes, ed. By Ottheim Rammstedt (Frankfurt
am Main: Suhrkamp, 2003), pp. 175.
30
Ibid.
31
George Simmel, The Philosophy of Money (London: Routledge, 1978), pp. 121.
13

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value. Money is that which comes closest to expressing the metaphysical spectrum of values
in a physical way: money as abstract value expresses nothing but the relativity of things
that constitute value32 Society has found a way to bring something from the metaphysical
world (existing on relations based on qualities) to the physical world (a printed piece of
paper).
7. Conclusion
Simmel already stated in the introduction of his The Philosophy of Money that answering
the question of what value is, is impossible. We have seen that there are two substantive
concepts of value: intrinsic and instrumental. Intrinsic value is limited to ethics, what is
valued intrinsically is thought of as good in itself. Instrumental value is valued because of the
effect or goal: this can be an ethical notion, too, but can also apply to the economic concept
of value. According to Simmel, values reside in a third world between the object and the
subject. This third world is a metaphysical place, since values do not lie in the subject, nor
in the object. The metaphysical spectrum of values consists of relations: we can only say we
value something because we desire it more than something else and are willing to make a
bigger sacrifice to attain a certain product.
Being valuable is not a quality of a certain object, but rather the effect of having
certain qualities. An object is appreciated (and therefore valued) because it has certain
qualities, not because value is a quality in itself. For this reason, value is not found in the
object itself; it is no part of the material world. Nature is completely indifferent towards the
way goods are valued. Value is not purely subjective either, because it is not found in the
direct subjective experience. If we value something instrumentally, we value it for the
pleasure derived from it. To value a good for its specific qualities, we need to have a certain
distance from the object. Distance leads to the appreciation from which value originates, and
it is the desire of not coinciding with a certain object that allows us to value it (because we
desire it).
In order to attain certain goods in life, we have established a global economic market
in which we are all rational economic agents. On this market, goods that we value
extrinsically are exchanged and in this way value is objectified: value becomes the correlate
of demand. Although value is not strictly subjective (the individual barely has any influence

32

Ibid.
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over it), economic value answers to supply and demand and in this way desire is kept vivid (if
things become to valued, the economic value will drop since the products become
unsellable). Through supply and demand, and economic transactions a non-consistent system
of relations a value for goods is established that keeps them wanted, even if their natural
value (based on, for instance, scarcity) is much higher.
To fulfil our desires, we exchange on the economic market. Simmel calls exchange
the Erfahrung des Opfers: to gain something that is desired, something that is valuable must
be exchanged for it. Fulfilling our desires by trading and exchanging means sacrificing value
for it (nowadays either time or money). Exchange has been made easier by introducing
money. Money is, as Simmel calls it, pure exchangeability: its only function is to express
value and exchange this value for other objects with value. Money symbolizes the relativity
of values: since value is expressed in a relation (as valuable as or more valuable than),
adopting a currency means expressing metaphysical values in a physical product (banknotes
or coins).
There are many advantages to our current monetary system, but there are also
problems and dangers in relation to our system of values. Money is valuable because it is the
physical embodiment of value. Value in money is treated as a quality, and this gives man the
power to create value. In diesem Sinne bricht das Geld den Relativismus der Werte, dessen
negative Gewinn die Entstehung einer blo artifiziellen Gesellschaft ist.33 As I described
earlier, value is not a quality in itself, but an effect of a certain quality or a certain set of
qualities. A bank note does not have any valuable qualities besides being valuable and as
Simmel has shown us, analogously with Kant, value does not add a quality to an object.
Recent history has repeatedly shown us what treating money meant as a mere means
of exchange something that represents value may lead to. Nature does not take human desires
into account things that we value, are often scarce. The evolution into printed money has
made it easier to create money: countries can create artificial value by printing money, value
that is not the effect of qualities, but treated as a quality itself. Money is man-made and
creation is completely in our hands, a feature that has gotten many national economies into
depression through hyperinflations, upsetting the relations between the natural value of
objects by introducing artificial objects of value and thus creating an artificial economic
society.

33

Christian Papilloud, Wert, in Georg Simmels Philosophie des Geldes, ed. By Ottheim Rammstedt (Frankfurt
am Main: Suhrkamp, 2003), pp. 176.
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Money, and more specifically forms of money that do not carry value, become
valuable to people because of what they stand for: a guarantee by a bank that they express a
certain value. The financial sector has become creative as it comes to creating money:
although printing money is still a privilege for the (supra-) national banks, there is an entire
niche specified in, for instance, selling and reselling loans that are only partially backed up by
actual capital. The essence of the role of money is making our life and the way we value
things easier. However, excessive creation of money and inability of banks to fulfil the
guarantee money should give undermine the role that money plays in our society as physical
embodiment of the metaphysical value.
Economics as we know it today is built on the assumption that there is a value for
everything, money is our chosen means of exchange and the global market our chosen
platform. However, as soon as the guarantee money gives us cannot be made true and money
no longer refers to value but merely states a value that is cannot back up, it becomes an
empty medium and loses its most fundamental role. Value came into existence by grace of
some natural balance of qualities (scarcity versus often occurring), and in recent years we
have been shown how this balance can be upset by the creation of artificial value that does
not spring from physical qualities, but is the mere physical embodiment of metaphysical
value. Value, thus, may be an outflow of the actions of an economic agent, but is as delicate
as the economy itself.

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8. Bibliography
Primary literature
Simmel, George, The Philosophy of Money (London: Routledge, 1978).

Secondary literature
Schroeder, Mark, "Value Theory", The Stanford Encyclopedia of Philosophy (Summer 2012
Edition), Edward N. Zalta (ed.), <http://plato.stanford.edu/archives/sum2012/entries/valuetheory/>.
Zimmerman, Michael J., "Intrinsic vs. Extrinsic Value", The Stanford Encyclopedia of
Philosophy (Spring 2015 Edition), Edward N. Zalta (ed.),
<http://plato.stanford.edu/archives/spr2015/entries/value-intrinsic-extrinsic/>.
Papilloud, Christian, Wert, in Georg Simmels Philosophie des Geldes, ed. By Ottheim
Rammstedt (Frankfurt am Main: Suhrkamp, 2003).
Khnke, Klaus Christian, Der junge Simmel in Theoriebeziehungen und sozialen
Bewegungen, (Frankfurt am Main: Suhrkamp, 1996).

Other
The Economist, Means of exchange in The Economist
<http://www.economist.com/news/books-and-arts/21643036-monetary-systems-have-alwaysbeen-imposed-sovereign-means-exchange> [consulted on 29/07/2012].

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