Real value can be seen more clearly in the rural areas, particularly in agriculture.
To live, we need food. This is basic. How do we get food?
1. Paradise. In the Garden of Eden, food is provided by nature. What we only need to do is to exert effort to pluck the food or harvest it. We do not even need to plant it.
2. Husbandry. Outside the Garden of Eden, we need to plant for the food. We need technology and seed. We need to take care of the crop and wait for it to grow. The end result is an output at the end of the planting season which we can harvest.
Supply Creates Its Own Demand. The output may be more what we and our family need. We may use the surplus to help those who do not have enough to eat or we can store up the surplus for the future when the harvest may not be as good.
If the harvest is insufficient, we use our savings or borrow from neighbour or we simply starve. The sharing among neighbours becomes an insurance against bad times.
But there is no room for those who not choose to work when they are able-bodied.
But society takes care of the young and aged and sick or incapacitated, to the best of the skills that are available (witch doctors and fortune tellers included).
3. Problem. The problem comes when the surplus is kept only the organiser or headman. If there is overwhelming success in the enterprise such that there is a lot of surplus, the headman may resort to hiring people to entertain him with payment from his surplus, whereas agriculture workers may be left unemployed. The workers may organise themselves. They may or may not have problem with land and seed and technology. If they can organise themselves, they can become self-sufficient. If they are incapable of organising themselves, then they are doomed to exploitation by the headman who may proceed with the agriculture production but requires a payment for his involvement. But at the end of the day, there is no unwanted output or inventory. All production is for the satisfaction of a specific aspect of life.
4. Real Price. Things may be exchanged at a rate of exchange, such as one papaya for two rambutans. The price of one papaya is two rambutans. The price of one rambutan is half a papaya. This is price in real terms, not money terms. Exchange may come about because people want variety to break the monotony of life or to search of balanced nutrients.
5. Distribution. Distribution is by way of tradition which is seen by all to be just. The harvest may be equalled divided among all individuals or all families. The harvest may be used to pay workers at a certain wage rate and the surplus taken by the organiser (or headman) as profit. The nature of the distribution is defined by any arrangement that can keep the peace and sustain the system. Distribution is at the core of the shape of society. This is where politics comes together with economics and philosophy - and all these shape culture and a particular way of life. The resultant culture and way of life is whatever that is capable of sustaining a society; otherwise, civil war simply obliterates that society or cause their people to be enslaved.