It's strongly implied throughout (especially in the passage about the two sons) that the 'value' here is one being assigned by an independent observer, not by either the king or the prisoner -- namely society.
Yes, and this is also backed up by the resolution to the first story: the exchange rate for the guilders was the most valuable things they could be traded for on the market.
Available in PDF here, the short story in question may appeal to LW readers for its approach of viewing more things than are customary in handy economic terms, and is a fine piece of fiction to boot. The moneychanger protagonist gets out of several sticky situations by making desperate efforts, deploying the concepts of markets, revealed preferences, and wealth generation as he goes.