Word Play What's in a Word

We don’t know about you, but we love to learn about words — their meanings, their origins, and how they shape our world. In each issue of Response, we ask a campus expert to explore a word related to the magazine’s theme.

By Bruce Baker, Assistant Professor of Business Ethics | Illustration by David Salinas

Value has deep roots extending more than 1,000 years into Middle English, from Old French, and ultimately from Latin. Its bedrock meaning refers to equality in trading one item for another. Hence, the obvious connotation of money, because money was invented to solve the problem of how to equate one thing to another when making trades, like silver for silk, or guns for butter.

Over the centuries, value has accreted many layers of meaning. As with baklava, the layers taste sweetest when combined.

When we ask a question like “What’s the value of a university education?”, those layers add different accents to our understanding.

From an economic perspective, the answer seems simple enough — just apply the standard business equation for net present value (NPV). Add up the costs: room and board, tuition, books, etc. Then estimate the future earnings that will ensue from that investment, and discount those earnings by an appropriate interest rate to account for the cost of money. Of course, this requires some clever guesswork, because the future is hard to predict, but this is the typical method to calculate the value of an investment.

We can refine the calculation by including “opportunity cost” (the value of time in college that could have been spent doing something else). The answer gets even more complicated when we try to factor in the “externalities” — effects that don’t show up in market transactions.

To me, this is an unsavory answer to the question. It smacks of the “economistic fallacy”: the idea that everything of value can be expressed in financial terms. I would no more presume to measure the value of college in terms of projected net gains in salary than I would presume to measure the beauty of the full moon with a photometer, or to measure out my life with coffee spoons.

Of course I considered the financial cost seriously when I sent my first three children off to college, and will do so again in a few years when the fourth is ready. I want them to make wise choices, and get the most for the money. But I would never presume to value my children or their college experience simply in terms of how much money they will make.

I believe in spending money wisely, but I also believe in values that can’t be bought or sold. College is a place to discover, gain, and grow in all these layered meanings of value.