Price, Cost and Value

How much would you expect to earn for 4.5 years of work?

Would you take $80?

The energy contained in a barrel of oil is roughly equivalent to 4.5 years of human labour.

Today, the price of a barrel of oil is about $80.

There is a difference between Price, Cost, and Value - and we frequently muddle them up.

A barrel of oil might be ‘priced’ at $80, but that is not a fair representation of the ‘cost’ of production [ancient sunlight captured by plants then being squashed for literally millions of years], or of the ‘value’ of the work done [those 4.5 years of labour].

I first learned about this distinction from Nate Hagens. He has done a brilliant podcast with najia shaukat lupson, where he outlines some of the key ideas that underpin his work around ‘Energy Blindness’ and the metacrisis. If you’re new to this sort of thinking, the episode is a great place to start …

[And even if you’re familiar with Nate’s work, it’s worth a listen - there’s some absolute gold dust in there!]