Value - what it means, how it is calculated - is one of life’s great philosophical questions. People have been puzzling over the meaning of value since the days of togas and hemlock, and I daresay we are no closer now to understanding it then we were then.

Some famous thinkers, such as OG economists Adam Smith, Ricardo Montalban and Karl Marx, gave it a shot a couple centuries back and drew some useful distinctions between the exchange and utility value of a particular commodity. Utility value is based on how useful something is. A famous example is that of air and water. We need these things to live, so they have a very high utility value. An exchange value, which is usually expressed through some kind of pricing mechanism, is the tradable value of a good. Gold, for instance, has a very high exchange value.

These two values are sometimes at odds with one another. While the exchange value of gold is high, its utility value is quite low. Unless you are a vulgar Baroque charlatan like Donald Trump, you cannot build structures out of it. You cannot eat or drink it. It’s high exchange value is determined by its scarcity, and the resources and labor required to find and extract it. Water and air are abundant, so though they have high utility value, their exchange value is low. You cannot pay for groceries with a bottle of water.

This is a useful way of thinking about the sometimes paradoxical relationship between prices and value . Unfortunately, this famous example which has stood the test of time is being turned on its head by climate change. Clean water and air are no longer so self-evidently abundant that they we can assume they have a low exchange value. Increasingly, the exchange value of water and air is rising to reflect its utility. Why is this so? Largely because climate change and over-development and poor urban planning are depleting ground water supplies, pumping CO2 into the atmosphere and polluting our rivers and oceans.

Some places are running out of water. Others are on experiencing more frequent and massive fires, which choke the air people breathe. Of course, the simple relationship described above still holds. As water becomes more scarce, its price will increase. There will likely be more competition to secure access to reliable water sources. Regulators around the world are struggling with how to assign a price to carbon emissions, which in a roundabout way reflects the exchange value of air as it sets a price for the right to pollute it.

These phenomena can be understood through the lens of simple price-value frameworks described above. Yet to me the most striking thing is that Adam Smith’s straightforward example of water as a commodity with high use value but low exchange value is becoming less and less true in a world where we have taken abundant natural resources for granted for so long that we finally need a pricing mechanism to demonstrate how essential they are for living.

The arc of human history has reached a point where such relationships that were once considered obvious are becoming inverted, and while we can use economic theories to understand why this is so, it does nothing to lessen the tragedy.