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Folks, 
 
A few days ago, just before subscribing here and posting a remark on 
the history of present value (4 Dec), Scott Cullen asked me about a 
definition of "value" attributed to Irving Fisher.  With his permission, 
I am quoting him and replying in public.  I hope this will evoke some 
comment on definition, value, and Fisher --and enough on value and 
Fisher that Scott will forgive me for bringing in definition itself. 
 
1998-12-03, Scott Cullen <[log in to unmask]> wrote to me: 
> 
> I stumbled on your site 
> http://www.eh.net/HisEcSoc/Resources/individ.shtml 
 
That is our guide to internet resources on individual economists. 
 
> while trying to research a definition of value as "the present worth 
> of future benefits," attributed to Irving Fisher, which I obtained in 
> (Appraisal Institute, 1992.  The Appraisal of Real Estate, 10th 
> Edition.  Chicago: Appraisal Institute, 768pp.) on p. 422.  On p. 69 
> this book cites you (1974.  Real Estate Appraisal: Review and 
> Outlook. Athens, GA: University of GA Press, pp18-19.) as a source 
> regarding Fisher. 
 
I am not the author of _Real Estate Appraisal_ and do not know that 
Paul Wendt; nor do I know much about Irving Fisher.  Yet, you may have 
come to the right place.  Our email list includes many historians of 
economics including some who know Fisher and many who know the history 
of value theory. 
 
> I have been challenged on the use of this definition: "worth and value 
> are synonymous, the logic is circular if you use a word to define its 
> synonym, so the definition is illogical if not meaningless." 
> 
> Can you provide any guidance?  Did Fisher adequately differentiate 
> worth and value so as to avoid this criticism?  Is there more modern 
> thought which has overtaken this definition? 
 
I think I can provide some guidance.  First, a task such as you and 
your critics seem to share is one that Fisher and modern economics do 
poorly.  Second, what a definition does is refine, not define; 
"refinition" (or boring "refinement") would be a better name for it. 
A definition commonly refines one aspect of meaning while leaving 
other aspects untouched --unrefined, crude. 
 
Fisher is famous for theoretical work relating present and future, 
whether the entire infinite future or a particular future moment.   
Think of time lines and points in time.  Think of capital and interest. 
 
I guess the thrust of "present worth of future benefits" is to relate 
present and future (the entire infinite future in which there may be 
benefits at each future moment) rather than to relate value and worth. 
As a DEFINITION of value, it is a proposal or commitment to use 
"value" carefully and in a present sense.  It is consistent with but 
does not imply leaving "worth" to ordinary language and careless use. 
 
How would a definition of worth as "present value of future benefits" 
be different?  Only in proposing "worth" rather than "value" as a 
technical term to be used carefully in a present sense, and perhaps 
leaving "value" rather than "worth" to ordinary careless use. 
 
So this "definition of value" is both empty as the critics say (the 
relation of value to worth, benefit, price, utility, pleasure, etc) 
and full of substance (the relation of value to present and future). 
 
 
----Paul 
 
Paul Wendt, Watertown MA 
Asst.editor, HES e-info services (history of economics) 
        [log in to unmask] 
 
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