In response to:
How to Understand the Economy from the November 16, 2006 issue
To the Editors:
Robert M. Solow writes, in his review “How to Understand the Economy” [NYR, November 16, 2006], that “everyday life is about prices, not values.” I must disagree.
I just bought a new 2006 Honda Civic EX for Canadian $26,000. I could have bought a 2006 Ford Focus ZX4 SE (a similar car) for around $19,000. I thought that, on the basis of a test drive, the Ford was a better road car; but I decided the Honda was a better value, in the class of car I had decided I could afford, in “everyday life.” And the Honda is also a very good road car.
It may be that Mr. Solow’s view is an important factor in the continuing decrease in market share of North American car makers.
Robert M. Solow replies:
I hope Mr. Collins enjoys his Honda. And I am sure that his opinion has value. But it has nothing to do with what I (or Duncan Foley) wrote. Mr. Collins did not make his judgment by comparing the number of hours of standard labor embodied directly or indirectly in the Honda and the Ford, nor would he have changed his mind if the Ford had turned out to represent more labor. As we know, to our political sorrow, a word like “value” can have many meanings and nonmeanings.