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Self Worth and Economics

Are you selling yourself short sometimes? Settling for someone or something that deep down makes you feel like there’s supposed to be more? Or are we the opposite and feel extremely confident in our own worth and never settle for less? If so, why are we so confident? Are we unknowingly trampling on others because we think we’re worth more than everyone else? If we are all worth the same, how do we prioritize our interactions? Isn’t our family “worth” more than a stranger? Let’s try to skip the traditional “love yourself” cliches and find some tangible ways to identify and cultivate a balanced self worth.

What is Self Worth?

There are a large amount of ways we can define worth. Often it’s used in conjunction with self esteem, or confidence; but there’s a subtle but important difference. Self confidence is rooted in our ability to make decisions and choices without debilitating anxiety, to believe in our own abilities. Self worth instead is rooted in the value we see in those abilities. For example, we could be very confident in our ability to achieve anything, yet if we have a low self worth, the influence others have over us could be extremely powerful. With low self worth, a self-confident genius can still get stuck working for a tyrant.

If we value ourselves appropriately then we’d only work and do things for others that align with our worth. But value or worth are still very tricky terms. We can define worth in so many different ways, even if we have a relatively healthy self worth, if it’s defined in ways that aren’t compatible with everyone else, we could still end up selling ourselves short or trampling others.

If we’re talking to a friend and trying to convince them to stop settling in a relationship, we often say things like “You’re so much better than this”, “You’re pretty”, “You’re smart”, “You have an amazing career”, “Everyone loves you”. These are often what we’re using as indicators of worth. Appearance, career, achievements, social circle, etc.

Yet as we can see, if we place our worth on these areas, we could still have many problems. What if we’re very pretty, place our worth on our appearance, then get into an accident that causes a disfigurement? What if our amazing career goes down the drain when a random pandemic hits? We’d need to find out how to place worth in other areas and the more deeply rooted, the harder that’s going to be.

Since there’s a large number of possible factors, we need to break them into categories that we can understand in a simple way. To do so, let’s first look at material goods and see if we can draw some interesting correlations.

Material Worth

Assessing value or worth ultimately goes all the way back to the first philosophers and “epistemology” or the study of knowledge. Even economists don’t agree on the theory of value as it pertains to goods and services. Without trying to solve age old problems, we can at least try to view it from a perspective that can help us better chose our own path of understanding.

If we could have anything in the world what would we ask for? Maybe it’s something simple like a really good set of headphones. Or maybe it’s bigger like a new car, a new house, a million dollars to buy whatever we randomly want. If we ask ourselves how much we are willing to pay for these material items, we’re ultimately identifying their worth as it relates to money. Since it’s only what we ourselves are willing to pay however, it has nothing to do with the actual price. Maybe we don’t want to exchange money but something else, maybe everyone else doesn’t agree with our valuation.

The idea that not everyone is going to agree with our valuation is one of the most important aspects of “self worth”, the intuition and cliche is to say we shouldn’t base our worth on what others think it should be. Yet, since we exchange money, services and other commodities we do have to negotiate “worth” to navigate life, in fact we could even argue, that’s the whole point of worth. This goes for both material worth and self worth. To be able to negotiate, we need to understand the various factors that go into worth.

Factors of Worth

When we think of material items, there is an obvious divide between intrinsic properties of an item and extrinsic properties that we apply to the item. A set of headphones has a particular color, weight, decibel output, among many other intrinsic properties which make up the item objectively. Yet all of these properties can be applied and assessed subjectively which are extrinsic to the item. For instance, what is an ideal decibel output? What is the best appearance? What makes a more comfortable headphone set? Does it matter that the headphones were worn by Beyonce?

Notice even if things are clearly subjective, there is a more tangible and logical aspect (what makes a comfortable headset) versus a more emotional and intangible aspect (Beyonce wore them). Tangible and logical characteristics tend to surround concepts like utility and practicality. When we describe comfort, we’re describing utility and practicality. But the fact that headphones were worn by Beyonce is more a symbolic meaning, or emotional appeal. Ultimately however, all subjective concepts can be mix and matched. An emotionally appealing characteristic, can have utility given the appropriate situation. For instance, we could trade a pair of headphones worn by Beyonce to a collector to get something we want from them.

Knowing these factors for ourselves however doesn’t really help us, which is a very counter-intuitive idea when it comes to self worth. We are told to “love ourselves” and are told that we are priceless, but if we also know that everyone else is priceless, then that cancels each other out and doesn’t matter in terms of interacting with others, leaving us back at square one. We all may be priceless, but we all use our time and energy differently when we interact with others, whether that is as family, friends, for work or random encounters. That time and energy is not worth the same for anyone.

Self Awareness & Exchange Rate

The real point of knowing our worth is ultimately knowing ourselves and a reasonable exchange rate. When we talk about the various characteristics or “factors of worth”, the more we understand our own characteristics, the more self aware we are. Lebron James is worth a lot as a basketball player, not so much as a neuroscientist. Some of us can do things others can’t do yet the value we each hold is the same, where and how we apply that worth is where the difference is.

To better explain, let’s think about exchange rates when traveling to another country. If we have 100 USD and want to go to South Africa, that equals about 1600 Rands. Notice when we make that exchange, it’s the same value or worth, just represented in different ways and can pay for differing things based on the economy. This is how we should treat worth. We are all banks with the same amount of value in them and everything we do is based on our exchange rate.

The stronger the economy, the stronger or more appealing the subjective and objective factors of worth are and ultimately the higher the exchange rate. A dollar in the US can’t buy much of anything, but in somewhere else like the Philippians we can buy at least a drink.

What this may tend to make us think is that some people are worth less. But this isn’t true, instead, it just means that we all place our worth into different things. Notice that the value of the item, all the objective and subjective characteristics that make up an item is ultimately the same in both the Philippines and in the US, it’s the representation of worth (the exchange rate) that is different.

Rules for Self Worth

Now that we’ve gone through and identified some key issues surrounding self worth, let’s underscore some rules that we can use to help manage our self worth.

Rule 1. Know that we all have the same amount of self worth: priceless. This can be thought of as a bank vault holding a ton of money.

Rule 2. Know that self worth is used to manage interactions with others. The entire point of “worth” is so that we can exchange our time and energy in a reasonable way.

Rule 3. We must have self-awareness of our own objective and subjective characteristics. If we are really good or really bad at something, we need to know and acknowledge it all. In money terms, this is our own exchange rate which will change depending on the situation and who we interact with. If we want to maximize our exchange rate, we need to focus on the areas we have to focus on our potential and possibly work on ourselves (this is where self confidence comes into play).

Rule 4. Whenever we interact with others, we must have awareness of their objective and subjective characteristics as it relates to our interaction. It’s the equivalent of knowing another country’s exchange rates. The better we know about others, the better we can accurately determine what we should or shouldn’t be exchanging.

Rule 5. Calibrate our exchange rate. The biggest problem with worth is knowing if we have the appropriate assessment. If a soda is 50 cents here (self awareness), and 2 dollars in the US (awareness of others), then we know that we have to pay more in the US. Accounting for both sides is how we manage our interactions.

Rule 6. Establish what we are willing to place our worth into. If we have to spend more for soda, we can always choose not to. We can chose to interact with someone else who has a similar exchange rate. Or maybe we can change what we want to exchange, something where our exchange rate is higher. Maybe we have something that is easy for us, but hard for someone else.

Rule 7. Be aware of those who may have a skewed self worth. For those who sell themselves short, don’t add to their misery. If anything, give them what they are actually worth. For those who tend to trample others or think way to highly of themselves, don’t do business with them or again only give them what is reasonable for that situation.

Self Worth is Not Just Self

If we take these rules into consideration we’ll realize that to have a reasonable self worth, it’s not just our own internal understanding. It requires that we understand others and what they are or are not willing to exchange.

Next time you see the cliche posts about self worth, about simply loving yourself and never settling remember that the easy answer is that we are all priceless. The much harder fact is that making use of the infinite value in us involves much more and is never just based on our own assessment.

Thoughts?

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