Idiots: me and the widget I rode in on

Any economist or sociologist can tell you that the price of all goods and services are based on actual worth and perceived value which is the sum total of both market value and personal value — none of these numbers are the same, and any two-bit salesman can tell you that.

For example, consider the humble widget, that symbolic product used in teaching business and economics. It's the equivalent of the X of 2X+3=7; or the N of going to the nth degree; or the snipe of “Hey, greenhorn, wanna go snipe hunting?”

If you spend $20 per widget on materials to make a pile of widgets, you might say that the price of a widget is $20, if so, I do not want to invest in your business, but I do want to get all my widgets from you because you sell them too cheaply. You need to make a profit. This is business, man.

For the sake of profit, you double the cost of materials — that’s a standard business practice in calculating worth. Now your widgets are priced at $40 each. But then you remember to charge for time spent on widget construction, let’s say two hours at $20 per hour. Your time is worth something. Now that widget is priced at $80 straight up, until you realize that widgets are a hot item in town.

Because everybody is clamoring for a new-fangled widget, you tack on another $20, pricing the widgets at $100 each. At this point I would definitely consider investing in your business because you obviously understand how market value affects the price of your product.

At some point, though, the market is saturated with widgets galore. People are using them as doorstops, and one day you see one being used as an anchor during a fishing expedition. You try not to be upset, but you know it’s one of your widgets.

The market value of widgets has tanked and you should have a 50 percent-off sale to unload your last one before no one, or their dog, wants to pay good money for a widget. But you look at the new shop and your round, well-fed belly, both paid for with widget sales, and you get all sentimental about the personal value of your last, unwanted widget and raise the price to $120.

I pull my investment — because, obviously, you’re an idiot — and you sit alone in the dark drinking a beer with your widget. Smiling.

Since I have explained all this, and you know that I know at least as much as a two-bit salesman about selling stuff, if I tell you that I just turned down a $4,500 offer for a horse, then you’ll be thinking, wow that must be an awesome horse.

Um, define awesome. Do you mean:

He must be really well-trained, and the buyer is willing to fork over a lot of money for a horse she can jump on do anything with.

No, not so much.

He must have a great pedigree, with lots of famous names in his lineage.

No, not really, and he's not officially registered at all.

He has impeccable conformation and spectacular movement.

That's as close to a yes as you’re going to get ... while still being a no.

The market is really hurting for this particular type of horse.

Nope, not so.

Well, then, perhaps he saved my life once at great peril to his own.

That would be awesome, but no.

He cost me a lot of money and I want to recoup the loss.

No. Free.

I'm independently wealthy and $4,500 means nothing to me?

That's funny.

Sure, it would be great to have the $4,500, especially since it would be a huge return on my investment in every way possible. I could pay for a lot of needed and practical things with that much money.

I know they won't be using the horse as a doorstop or an anchor, but what's money compared to my big guy? He's a cute horse, and I like him, and he's quirky, and he's easy to ride, and I don't want to look out at my little herd and not see him.

I suggest you not invest in any horse prospects with me. My personal sense of value is hugely skewed toward idiot.

(So how is it I'm supposed to make room for a foal in two years at http://viewnorth40.wordpress.com?)