Dr. Love, you have my apologies for confusing the issue. In my reply to WillFarnaby, I should have written “how labor and value interact,” rather than just “what labor is”, if for nothing else than clarity’s sake.
I think (argument might change my mind) that all of the things you list are actually labor, though Scenario 3 is a special case that it’ll be difficult to unravel. Labor, quite simply, is the exercise of mental and physical capacities of a human being whenever she produces use value. It seems clear to me that the items you are producing in all of your scenarios have use value: the 100 pieces of wood can be made into chairs; chairs can be sat on; the pieces of canvas can become place-mats; place-mats can be used on tables. So we’re fine there. The question that really concerned WillFarnaby was how any of this labor produces value; and the answer that I gave was: not all of this labor produces value. Wikipedia puts it sufficiently well: value is the labor embodied in a commodity (!) under a given structure of production, that is to say, according to socially necessary labor time. This is why in your second example, the first step may not be producing value: unless it is necessary for the canvas to be split into hundreds, and then sewn together again, it seems that what’s socially necessary in this short bit is to cut the canvas into ten bits. Of course, nobody may yet have come up with that idea—in that case you’re golden. But as soon as somebody does come up with that idea, it would seem to me your way of producing place-mats wastes labor. In fact, it’s quite possible that in all of your cases, you’ve wasted labor, because you’ve not produced a commodity (i.e., something to be exchanged on the market place).
Your third example is difficult. I think you presume that because the Cezanne can be sold for a million dollars, that is its value. It is its price, of course, we’re perfectly agreed here; but its value, I think, in terms of the theory, is probably (I’m not quite sure) just that of the canvas, simply because it’s impossible to determine the value of Cezanne’s labor: after all, making art is not the production of use value, and its price is determined by speculation. I’m not actually sure about how Marx deals with art (but if you like, I’ll look it up), so that I think your final example involves the same values (the canvas, embodying social necessary labor time, and the time you’ve spent cutting it up) as the second.
In simple terms: all labor does not produce value; all value-producing labor does not produce equal value; all socially necessary labor time produces equal value; value is not price; prices are determined much more complexly than value (supply and demand play a role; much of Vol.3 of Capital is devoted to that).
Something else that’s important: Marx’s theory is above all a theory of political economy, i.e., of a discipline which emphatically seeks the solution of how things work in society. Which is why it’s difficult to determine if single examples of actions are anything in particular: what’s required is knowledge of the society in which theses actions take place.
I’ve not followed this debate, and I’m happy to join in the condemnation of extremist or over-simplified Marxism if that’s what we’re doing here. However I hope to provide a more nuanced slant on issues Sam Stone raises. For ease of reference, I’ve taken the liberty of editing “[1], [2], etc.” into his post.
(1) Agreed. Still, it is interesting that economic mobility (ease with which a citizen gets a much better job than his parent) is significantly lower in U.S. than in Western Europe.
(2) We’ve had threads on the likely effect of a smallish rise in capital gains tax, that doesn’t even apply to IRA’s or first homes. I think the consensus was that “destroys efficiency” would be an exaggeration. “Inevitable without interference” ignores that government (unless extremely weak, but I don’t think Sam is one of the libertarians who holds up Somalia or medieval Ireland as paragon) will always be interfering to some extent, even if inadvertantly.
(3) This claim is very controversial. It might make an interesting GD thread.
(4) I think cases where an unfettered market gives suboptimal results are much more common than you imply. What’s your stance on pollution cap trading? Did you ever find a cite for your surprising result about Braess’ Paradox?
(5) Many regulations may be ill-advised but let’s not throw out the baby with the bathwater! There are many areas where economic regulations are well-advised: not just the obvious Food and Drug areas, but the financial markets you emphasize. [del]Surely it’s clear, at least in hindsight, that reductions in financial regulations between 1981 and 2007 were very bad ideas. Even the Wall Street Journal agrees with me that the systemic risks of HFT outweigh any alleged liquidity benefit.[/del] Admittedly, many U.S. Congressmen have been influenced to make to the same faulty assumption that Sam does.
Well, no, that’s not what “science” means. Science is science. Economics may be trickier than chemistry, and it’s certainly newer, but it’s still science. It is, after all, essentially a specialized version of psychology.
We keep going back, though, to what is now your “things are worth what they’re worth in SOCIALLY valuable labour time,” which really is not much different from “how much labour did someone put it to it” except that you’ve added the “Socially valuable” modifier.
*But how do you know what’s socially valuable, and by how much? *
I have to go back to the pigs-for-milk example, which you didn’t seem to understand at all; do you not get why we’re both wealthier for trading, and why that seriously tests the labour theory of value?
I think the labor theory of value is disproven better by WillFarnaby’s example of the million dollar painting. If it is worth a million dollars, and you spend $20 worth of labor cutting it up into confetti, it should be worth $1,000,020 instead of 0.
Whatever the central planners decide is socially valuable is socially valuable, whether anyone wants it or not.
Economics produces deep thinkers, and it produces an intellectual history.
Awareness of this intellectual history would be a nice foundation for someone who started a thread like this. That would obviously be true even for people who disagreed with their conclusions. But in your response, you carefully clipped the section of my post where I pointed out someone who disagreed with me but who wasn’t ignorant. And that’s the thing, isn’t it? Steve Keen disagrees because he’s aware of the intellectual tradition.
I don’t think you can’t make the same claim. You’ve been asking questions that are answered in introductory classes. Maybe you think you’re being Socratic, but a good bet is that you’ve never been exposed to the ideas.
I never insinuated that you are “uneducated and ignorant” because you disagree with me or some other fluffy blather. I specifically cited a person who disagrees with me who is far from ignorant. Disagreement is not a sign of ignorance.
The content of your posts is another story.
And that would be fine in any other context. It’s fine to be unaware of modern economics. There is no universal requirement that all citizens indoctrinate themselves with standard economics. But this thread is a rather particular subject, and it raises some interesting questions why a person would wander into a place with a century outdated theory and treat it as if everything’s completely normal. And then to take offense at an old idea being brusquely treated? It’s a bit much.
Put it this way: there are some right-wing types on the internet who read absolutely nothing but books that firmly belong in their particular ideological home. Not all of them are this rigid, but a certain percentage of them are. They like gold a lot. Their attitude toward the government is basically, “Don’t tax me, bro!” I’d guess at least three-quarters of them are white male men, and that could very easily be a conservative estimate. They read a lot, but as it happens, when they seek out “information” about the economy or economics, they don’t reach for a book that might contradict them. It’s going to be fuel for the ideological fire, not a new perspective from someone who disagrees. Their little blog universe might have snippets from Krugman’s blog, with castigating commentary, but have they read Keynes? Or Friedman? How many modern textbooks have they opened up and digested? There are exceptions, as I said, but for a lot of them, their intellectual world is closed. Does that seem healthy to you? I would personally say that more exposure to different ideas – not just in blog posts but in depth – would cook up a healthier intellectual fare. I’d hope you would agree with that.
Now you come into this thread with no demonstrated awareness of the last hundred years of economics. Do the math on that.
You asked for a cite that modern economists don’t accept the labor theory of value. That’s what I provided.
I didn’t include his full explanation specifically because it was perfunctory, as I believe I said. I did provide reference to a more robust rebuttal at the end of my post, from someone who doesn’t agree with mainstream economics. I disagree with huge chunks of that book, but it’s still a good book. You don’t have to be mainstream to get my attention.
The core definition in classical economics is that the relative prices of commodities – not everything, but human-produced commodities – correspond to the relative amounts of work effort put into producing those commodities. Relative values are determined by relative efforts of laborers.
Adam Smith: “If among a nation of hunters, for example, it usually costs twice the labour to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer. It is natural that what is usually the produce of two days’ or two hours’ labour, should be worth double of what is usually the produce of one day’s or one hour’s labour.”
David Ricardo: “The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour.”
Smith didn’t rely on any formal structure to base his arguments on. Ricardo tried harder but was always unsatisfied with the result. It’s worth strongly emphasizing here that Ricardo explicitly draws a distinction between commodities whose quantity can be increased with labor, and commodities that cannot.
Marx is a harder case, an attempt to surge forward where Ricardo gave up, and your presentation is clearly Marxist or Marxist-inspired if you’re denying that prices are drawn toward relative efforts of labor. If you want to accuse me of skipping past the subtleties of Marxist presentation: guilty as charged. It’s a lot more complicated to do so, because a “theory of value” is ordinarily intended to explain things like prices, and when you reject the tug of value on prices, then that value has to make itself felt in more complex ways.
At this point, it occurs to me that you might respond: “Of course I’m talking about Marxist LTV to the exclusion of all others!” Maybe that’s a fair criticism. Maybe everyone today who argues LTV is arguing the Marxist version. That could be true. In my defense, though, my historical readings are a lot broader than that and I literally cannot remember any previous encounter with a Marxist-LTV proponent on this board. Either it’s never happened, or your few predecessors are hilariously forgettable.
You asked about the “labor theory of value”, not Marx specifically.
You asked for a cite that modern economists don’t believe in the labor theory of value. Immediately after the cite request, you said “so what?” showing little apparent interest in the answer. So I gave the cite and explained further why an interest in a long intellectual tradition is important. Those are the questions I’ve been answering.
It’s a fair point that my response was superficial with respect to Marx, but that wasn’t what drew me into the thread. Answering your question did.
You asked for a cite. I gave you the cite.
Or the lack of the cite, really. I can point to any number of mainstream modern books used at the vast majority of programs where the labor theory of value doesn’t even appear in the index. The one mainstream intro text I had in front of me that mentioned it perfunctorily dismissed it. I gave you what you asked for. My subsequent criticism of the LTV was superficial from a Marxist perspective. I have to admit that. (The second book I mentioned was not superficial, as I said.) But I wasn’t engaged in a “debate” with my previous post in this thread, which was in fact my only post in this thread. I answered two of your questions. That was it.
If you want to walk us through your interpretation of Marx, that’s fine. But to make an audience out of me, you’re going to have to break the discussion down into teeny-tiny baby steps.
Yes, I said: it’s a social science. It doesn’t provide truth in the same way that natural science does (truth, of course, always within the limits of epistemology). I’m baffled that anybody could possibly deny that. But it’s somewhat immaterial to my general point, I suppose…so you can have it.
RickJay, I’m sorry, but we can’t really talk on this basis. If I didn’t believe you were not the mendacious type, I’d have to say you’re deliberately misconstruing my words. I said, have said, and will say, that the point is socially necessary labor time. I did NOT say anything about socially valuable labor time.
You haven’t answered my question precisely how much wealth got created in this example, either. I’d still be interested to know. And you’re right: I don’t understand your example at all, nor why it would be a test for the labor theory of value, which simply doesn’t see your trade as creating wealth, but as the exchange of similar use values; did you understand my alternative explanation? Why is that not a workable explanation? Would you not trade for equal use values? Why do you have to claim that greater wealth is involved? It’s an unnecessary complication, if nothing else.
Unless I’m mistaking you, you are essentially saying if I sell my labor (we’re agreed that I’m doing that when I work for wages) to you tomorrow, then I’m wealthier at the end of the day (for presumably we have traded equally, right, because that’s what people do); if I then spend my wage on food to sustain myself, I am again wealthier, because I have traded equitably with the shop; and then I must eat my food, and am…not any more wealthy than I was at the beginning of tommorrow. Agree or disagree?
Are you saying all trade is always equitable (on the basis that people must agree to trade, I presume)? Because in my example above, I rather had to trade away my labor, because I need money to eat…
If you replace “valuable” with “necessary” the question remains the same; how do you know what’s necessary, and by how much?
See, I know how you can figure that out.
Determining how much you value the pork I gave you is really dependent on what you’d be willing to accept in exchange for it. From a survey of that, we’d be able to arrive at some idea, perhaps tied to our society’s currency of choice. What is for sure, however, is you value it more than you did the milk you gave me, and you therefore got wealthier by trading, as did I.
If the LTV claims a trade that obviously increases wealth does not increase wealth, it’s wrong.
No, of course not. Why would I bother? It’s akin to giving you five bucks for five bucks. Why on earth would I go to the trouble of exchanging things I believe are of equal value? That’s absurd.
I engaged in trades - and there’s no hypothetical here, I do it every day - because the things I receive are of MORE value than the things I give away. Just an hour ago, I went to Longo’s and purchased groceries for which I paid $54. Those groceries are worth more than $54 to me. If they were not, I would not have bought them. They were worth LESS than $54 to Longo’s.
Yes, it’s true you are probably wealthier, in the case of most jobs you could conceivably do in a First World society, but no, we may not be gaining the same amount of wealth. Not all trades benefit both sides the same, and it IS possible for a person to be ripped off in a trade, which is why we have government safeguards against many such things. Imperfect information, monopolistic or monopsonistic situations, externalities and any number of other market failures than cause a trade to fail. Some trades are lopsided by design, too.
Again; probably, and not necessarily.
I disagree. You enjoyed another day of not starving. That’s terrific.
No, I’ve never said that. Trade usually benefits both parties. Not always, and not always by the same amounts even when it does.
In terms of my $54 grocery purchase from Longo’s, it’s entirely possible one side derived more benefit than the other. Maybe they realized $5 in utility from the sale and I will realize $4 (we’ll see how badly I can screw up dinner.) But we’re both better off, I would assume; I don’t know Longo’s business or how they’re doing right now but they’ve been in business forever so I assume they’re doing okay. I really don’t care, either. All I know is I’d rather have this food than the $54 I gave them. If you asked me for the food and offered me $54 I would absolutely refuse.
Well of course you did, and the people who sold you food had to do that because they’re all making a living, too. Farmers don’t farm for kicks, they farm to trade food for other kinds of food and for clothing, medicine, and the like. They HAVE to do it, just as you HAVE to work. Having to exert effort to stay alive is a fundamental part of being a living organism. Either you work to get food and shelter or you die. Some people have it done for them, like children, but sooner or later they have to exert effort to remain alive.
In terms of determining the value of things, whether you want something or need something is a pointless and vague distinction. Technically I could survive forever with nothing but clean water, rice, vegetable oil, cans of tuna and a bottle of multivitamins, so is any food I want beyond that a “want” or a “need”? It doesn’t really matter.
Both true; I qualified this is just now to RickJay.
Again, I would appreciate if you could leave out the insinuations. I cut nothing “carefully,” only because I thought it required no comment. If you’d like comment: I appreciate your willingness to accept the abilities of people you disagree with. Interestingly, I don’t get the same credit. Your basis for asserting that I am ignorant is my unwillingness to accept (I think) marginalist economical thinking (correct me if I’m wrong)–which I know quite a bit about. I disagree with it. So do all Marxists–many, many of whom (while not always trained economists) have a deep understanding of postclassical economic theory. But unless I’m mistaking you, and again correct me if I’m wrong, it seems I can only “prove” my awareness of the history of economic thought by acknowledging the validity of its dismissal of the labor theory of value?
Fairness cuts both ways, would you not agree? I asked questions that are answered in introductory economics classes, I get asked questions that any introductory text on Marx answers on its very first pages.
Yes, and I’m still glad to you did, and much obliged.
No, you’re quite right, I did not specify, and I should have, given the classical precursors. I somewhat blithely assumed that since I’d already been marked as a Commie, that was going to be self-evident, but of course it need not have been. Apologies, which also goes for the bit further below (which I’ve now “carefully” snipped…)
Yes, and I’m grateful for your answers (and would be more grateful still if you didn’t insist on supposing that my disagreement with your conclusions simply marks my lack of knowledge); and yes, I did ask for a cite, partially because I’m tired of getting random facts thrown at me, partially to get apparent experts to provide me with some input. And yes, I did say “so what”–I have an interest in the answer indeed, but I fail to see how the appeal to authority can help any one of us here.
I’d be happy to do that, but, if you don’t mind, not in this thread. And I’d love to have you as an audience and opponent.
I haven’t been insinuating. I have been straight up asserting that are you likely to be unfamiliar with marginalist economics.
You claim I am mistaken, and that’s fine. But I can’t help but read your interaction with RickJay and see that despite whatever previous experience you have, you haven’t internalized any of its lessons to the point where you can accurately summarize it. This is in exactly the same way you can criticize me for not having accurately summarized Marxist LTV. And frankly, I won’t be able to do that without going to the bookshelf and putting in more time than I consider to be worthwhile. At the very least, you would have to say something similar about your own exposure to mainstream economics.
More broadly: I don’t care about tone.
The last person (in a previous thread) who resorted to tone complaints as an excuse to stop paying attention refused to read my post to them – with five different cites showing their error – while simultaneously advising me to “read more”, which was a nice touch of hypocrisy to top off their intellectual cowardice. I detest tone, and similar digressions, as an excuse to avoid valid points. But you say this to RickJay:
This is an extremely easy mistake to make. This is an extremely easy mistake to make over and over and over again.
Jargon is hard.
Jargon is convoluted, complex, difficult to follow, and difficult to pick up. Trying to teach the nuance of different expressions is laborious and often unrewarding. I can try to put soft bumpers on whatever sharp corners of my personality that poke out, but those bumpers are going to come off damn fast if I see a complaint about posting style that’s used as an excuse not to engage substantive points. RickJay’s question absolutely stands, despite his fumbling with the terminology. Learning jargon is a lot like learning a foreign language, and no matter how much I practice my German or my Japanese, I’m going to fuck things up when I speak. A native speaker should take these mistakes in stride, and try to pull out the underlying meaning rather than blame the foreigner that their grammar and diction isn’t perfect.
I don’t agree.
If people are to become familiar with economic ideas, it generally behooves them to become familiar with the most commonly accepted ideas. It’s not unreasonable to believe that the mainstream is mainstream for a good reason. That’s not an absolute, but it’s a reasonable starting point.
If you open it, I’ll participate. Frankly, I might just be repeating what RickJay is saying here, but I might be able to do that in different words, or ask different questions.
That’s the conclusion of the annual North American Economic Freedom report, put out by the Fraser Institute in conjunction with a number of universities and organizations in the U.S. and Canada. They look at a host of variables that include taxation, regulation, monetary policy, etc.
You may not have been keeping up with the changes in Canada since the 1990’s. We have cut the size of government and cut taxes dramatically. The federal corporate tax rate is now 12.5%. Our top marginal tax rate is now 29%. Our capital gains tax is 50% of whatever the marginal income tax rate is for that income, which means the maximum it can be is 14.5%, and for many people it would be less.
We cut the size of government from 53% of GDP to 34% of GDP (I think it’s gone up a bit since the recession, but don’t have those numbers). In addition, Canada’s federal budget is now in surplus and our pension system is fully funded.
Alberta has no sales tax, we have a flat income tax, etc.
In fact, four of the five most free economic regions in North America now are Canadian Provinces (Alberta, Saskatchewan, Newfoundland, and British Columbia). Texas rounds out the top 5.
This is a massive change in just the past few years. Not long ago Canada’s provinces other than Alberta used to rank at the very bottom of the list. Now we have four of the top 5, Ontario is 16th, and even Quebec and Manitoba are ahead of 20 U.S. states.
I’m sure much depends on what kind of business you’re opening, and what kind of connections you have.
Yeah - something poor people aren’t likely to have. As I said, these sorts of regulations often act as a barrier to startups, and they disproportionately affect the poor and those who aren’t already connected to the corridors of power.
But it’s tough to enter the jumbo jet market for a reason - it’s really freaking hard to build jets and takes a whole lot of money. On the other hand, there’s no reason why an African immigrant should be stopped from offering private African Hair Braiding services. There’s no public health issue, no chemicals are used, the process isn’t permanent, etc. And yet, if you live in Iowa you cannot open such a shop without a cosmetology license - something that requires 2,100 hours of classroom instruction (none of which has anything to do with African Hair Braiding), plus an apprenticeship in a licensed shop and thousands of dollars in fees.
In some places, you can’t open a new cosmetology practice without getting approval from the cosmetology licensing body in that state - which is run by the other shops that have a vested interest in limiting competition.
Or look at the lengths many cities are going to to stop Uber, AirBnB, and other similar services that allow people to use their own resources to drive people around or put them up temporarily. It’s better for consumers, and gives the poor or at least lower middle class a way to earn more income and be more self-reliant. But it hurts the big companies and other special interests, and they have the ear of government.
Another example of regulation that disproportionately hurts the poor is the lead in toys act - shaped in part by lobbying from Mattel, it set standards for lead testing that were impossible for small thrift stores and individuals to meet (Mattel spent an extra $1 million in lobbying to get an exemption that allowed them to use their own existing lead-testing facilities without government oversight). The result was the destruction of something like $200 million in used toys in thrift stores and other small shops, because they simply couldn’t afford to comply with the law. Who buys used toys from thrift stores and garage sales? The poor. Who benefits? Mattel. Who doesn’t care? Rich people who would never buy a used toy.
The law has also hit ebay sellers, the Maker movement, Etcy sellers, and anyone making small-volume toys. The big toy companies already had lead testing, so the regulation is a big benefit to them.
The overly-broad law even applied to garage sales and children’s books. Many classic children’s books in second-hand stores had to be destroyed because the store couldn’t guarantee the lead content. In addition, anyone selling used toys faces huge penalties if they sell the toy that’s on a recall list - even private individuals selling through garage sales or classified ads. Unfortunately, it’s very hard to know if your toy is on some recall list somewhere without having resources to do the research, so the law has a chilling effect on small sellers, startups, and people trying to recycle used goods to lower their cost of living.
There are way too many laws like this on the books. Laws created to protect special interests from competition, which disproportionately reward the rich and punish the poor. Even when the law was designed to correct a real problem, it will often be twisted by special interests to do their bidding. The left and the right should be able to come together to oppose such laws, except that so many on the left have a reflexive opposition to any talk of deregulation at all.
Interesting bit on Alberta. I’ll note that your source considers low unionization rates as an indicator of economic freedom in their index. They also leave out consideration of civil asset forfeiture, which is sort of odd if you are truly concerned about property rights as opposed to promoting a favored class. No matter though: that wouldn’t affect Alberta’s rank though it sure as hell would knock Texas off the number 4 position.
Realistically, most small businesses are not set up by the poor, with a few cosmetological exceptions. The barriers to small business entry are a middle class challenge, which frankly doesn’t make them less important. They are most definitely a barrier to entry which protects incumbents, those who already have established businesses, be it a restaurant or a licensed hair weaver.
Set Berkeley aside though, as it is an outlier. Local regulatory barriers to small business and local zoning restrictions that are hostile to multi-family structures and denser development do indeed distort the economy. The center left journalist Matt Yglassias has commented on this. IIRC, he has noticed that self proclaimed libertarians tend to be less interested in curbing the sorts of zoning restrictions that bother environmentalists. Red state’s Erick Erickson was happy to drive local entrepreneurs in out of business - though admittedly we’re talking about massage parlors. (Cite.)
So some of this free market rhetoric is more than a little much. At any rate the proper way to go about this is with top down reviews, rather than inane sloganeering that papers over givebacks to favored fat cats, such as the notorious carried interest tax loophole and accelerated depreciation allowances for oil companies.
This. To the past several posts in a similar vein, I would add the paradox that governing a well-functioning market system, in which price is the best indicator of scarcity, depends on some semblance of wealth equality. If (for example) water is a scarce resource, then it should be diverted to those who most need it, and they should be able to express this need by their willingness to pay for it. But in an environment of gross wealth inequality, that can’t happen. Convert this model to things like CO2 pollution and you start to see why this is so critical.
This problem is the greatest flaw in capitalism, but to my mind it is not insurmountable. We just need to learn to think of it as a way to let markets self-regulate, not a contest for a few people to control the whole system.
First up, no, the question does not remain the same–there’s no definition for “socially valuable labor time” in the theory I’m advocating, but there is none for “socially valuable labor time.” I’d be happy if you could at least acknowledge the mistake, rather than insisting that it changes nothing.
Second, socially necessary labor time is determined by a host of factors: technological productivity, labor laws, average worker skill, the organization of the production process, the conditions imposed by the natural environment; I’m probably missing a lot of things that impinge upon it, but this should do. To quote you, “from a survey of that, we would be able to arrive at some idea” of what labor is socially necessary to produce a particular commodity at any point in time.
Would you object to me saying that we have both increased our utility (as I think I’ve already done)? If so, do you hold utility and wealth to be synonymous?
Yes, well. If our trade *obviously *increased wealth, you’d probably already have convinced me of the fact.
Because they have different utility. Or, to come back to the very useful term that would immediately clear up the issue: because of their use value.
Yes, true. They were marked up by your grocery store, of course, from the price the store paid to its wholeseller, or wherever it gets its stuff from, so obviously they were “worth” less than 54$. And it seems to me you’re essentially contradicting yourself, or at least several other posters, who have argued that price is value. You’re saying instead that price isn’t value, it’s merely the median (I assume) between two completely different estimations of value. What are your groceries “worth” to you? And why didn’t Longo make you pay THAT price?
And all of this, of course, as somebody pointed out, simply ignores from your easy perspective of being able to pay 54$ for anything that your logic suggests that once I have no money to buy anything at all, nothing can possibly hold value for me, because I cannot play the game.
Okay, fair enough.
Wow. So survival is wealth? Because I specifically asked about the state of my wealth. Does the slave owner increase the slave’s wealth by keeping him alive to labor on his plantation?
Why would you absolutely refuse? Presumably because you’d have to go shopping again? Would you absolutely refuse if your mum asked you to sell you those groceries for the price you paid?
The point here was not to say something about how needing versus wanting influences value, but how need influences my ability to participate in the kind of trade that you were suggesting. Because elsewhere, you said that you would refuse to trade with me if you didn’t feel your wealth was increased by the trade; while I point out to you that even if I didn’t feel my wealth was increased, I would need to trade my labor for wages in order to live, simply because I lack options.
RickJay, would you be willing to briefly indicate whether you see any way of convincing you that utility is not wealth (though it is a form of value)? Because if not, we just stand on two different theories (apparently…I dug for a cite for somebody proving utility=wealth and could not find anything just now, but I’ll keep looking) that just are not compatible.
You’re quibbling over a word. Sure, I said valuable when I meant necessary. Get back to the question, please.
I’m sorry but I think you misunderstand. I’m not asking what factors determine how much time it takes to make something, I’m asking how you know how necessary something is.
For the purpose of this discussion, yes.
At this point I’m convinced you don’t really understand, and the Socratic process I’ve attempted to work through is not working, which is probably at least in part my fault, but you’re now contradicting yourself.
What you asked was “would you trade for equal use values?” It was YOU who asked if I would trade for something of equal use value. The answer is of course not. I would not trade you something that had X “use value” to me for something that had X “use value.” There is no point in such a trade; I don’t understand why anyone would do something like that. It is, again, precisely equivalent to trading a five dollar bill for a five dollar bill. It’s preposterous.
People trade things they perceive to be of different “use values” - the term I’d use it utility. That’s the point of trading.
I don’t think I am, no. I think what people are saying, if they might be simplifying a bit, is that price is determined by a wide range of subjective values (or, correctly, evaluations of utility.)
Longo’s has to set prices at a level that maximizes their profit, of course, and if their groceries are priced higher, I won’t buy them; I’ll buy them at Sobey’s or Fortino’s because that trade would benefit me more.
Sigh. Sorry, but I’m trying to use simple examples. Trades don’t necessarily have to be with dollars.
By a Planck length, I guess.
In the first case, because it’s a stupid trade. The groceries are worth more to me than I paid. Going shopping again is an expenses or resources and time; I am out money.
If my mother insisted, avoiding her pestering might be worth the bother. Everything has utility.
You’re using a definition of “wealth” that is clearly different from utility, and fair enough; I should started with the word “utility,” but really Hellestal’s way better at trying to make these points than I am. The concept of how trade increases utility, wealth, or “use value” is something you rejected off the top and yet is at the heart of understanding why economies work as they do.
What’s fascinating of course is that you’re not at all criticising capitalism anymore.
I’m really confused, you’re right. Can you explain what you mean by necessary here, then? Just a sort of lose idea of “somebody needs or wants this”? And you want to know how the producer of a commodity can know that it is wanted? Sorry I’m just asking questions, but since I just apparently answered the wrong question, I think I’d better make sure.
There must be a good reason why I can get through this discussion without dismissing your opinion as preposterous, but I can’t for the life of me figure it out. I get that this may exasperate you, and that you think that’s for good reasons. So does your opinion, me. So, for me, it’s not preposterous at all. Again: My 1.0 of milk might have 0.9 use value for me, and .1 exchange value (because I can only use 0.9 of it, and therefore would prefer to trade 0.1 of it); your 1.0 pork has 0.9 use value for you, and 0.1 exchange value; therefore it’s great for both of us to exchange 0.1 for 0.1, in that we both now realize 1.0 use value from our commodities. It’s a (use-value) win-win, although we both only have 1.0 value at the end…[I’m sure I’m doing Marx some major disservice in this little example, but it’ll suffice to explain my point, I hope].
Yes, I would agree that prices are determined by a wide range of subjective evaluations, speculations, hopes, believes, etc., and so would Marx. I would, however, content that prices are not value. And, in what you will think a deplorable return to orthodoxy, I do rather think that while “a price” (which is what we’ve been talking about) does not represent value, there is an “average social price” that *does *(or slightly less orthodox, would) represent value, because it is freed of all the subjective inputs.
Yes, I understand that–I would content, however, that my playing with your examples shouldn’t be a source of exasperation, but of understanding that examples (like my example above, I rather fear) don’t adequately catch the complexity of the processes we are discussing.
Huh. Okay.
I’m with you (except I think it’s a dangerous but common illusion, necessary to keep capitalism working and the population quiet, to think that all your trades benefit you, as in “it’s worth more to me than I paid”. Here, criticism of capitalism! Not that it’s particularly helpful…).
Okay. You’ll find that we’ll be much closer to agreement, not that that’s necessary, when we use the word utility instead of wealth (unless of course you insist that you’re just using the words synonymously). And it’s just not correct to claim that I reject use value, that’s not even a claim that makes sense. I reject the claim that wealth and use value are the same thing. I reject the claim that wealth and value are the same thing.
Damned if you do, damned if you don’t, eh? Now I’m being blamed for spending my non-too-copious time replying to your (and everybody else’s) various queries?
That said, would you mind letting me know the answer to the last question I put in my last post? Can I possibly convince you to doubt your position here in the slightest? Because if not, I probably could get back to slamming capitalism…
Oh, heavens to betsy, of course I know what you’re advocating, or at least the gist of it. Your terminology, your embrace of the absurd labor theory of value, your assumptions, and the angles you take in your criticism all ID you as a Marxist, or at least someone who has read Marxist theory and been very impressed by it. (Historically, there have been other critiques of capitalism that are non-Marxist in nature; you haven’t come near to making them.)
You can deny this all you want, but frankly it just means you’re arguing in bad faith. You come across like the guy saying he wants to criticize the theory of Evolution, argues that it’s not really possible for complex order to arise from unplanned interactions, suggest that there must be some kind of intelligence at work, and then says “I’m not advocating creationism.” Which is to say: dude, you’re not fooling anyone.
I suspect the reality is that you are well aware of the indefensibility of Marxism as offering any kind of solution to the problem of scarcity, which is the central question of economics, and so want to avoid the criticisms of it while still keeping Marxist criticisms of the free market intact. Unfortunately, where that leaves you is with generalized complaints about scarcity itself (i.e. the nature of life) as several people have already observed.
No, capitalism doesn’t give people everything they want and need. Nor does any economic structure, because it seems a characteristic of human nature that what we always seem to want and need is “more,” and we are rarely content even when we get it. By any objective measure, I as a middle-class American in 2014 am among the wealthiest 0.01% of all humans have ever lived … and yet I live in envy of those who have more, as do nearly all of us.
Ditto with your explanation of third-world poverty as ascribable to capitalism via imperialism, as if the concept of “kill someone and take their stuff” was something other than a primordial urge of all humanity. It’s true: Capitalists have an ugly history of killing people and taking their resources to sell on the market. But communists have an ugly history of killing people and taking their resources to distribute via central planning, and stone-aged humans have an ugly history of killing people and taking their resources, too. When you insist on limiting the conversation to the first of those three groups, you’re not going to come anywhere near any kind of a solution to the phenomenon.
These desires to have and to take are not features of capitalism, they are features of humanity, and understanding and dealing with them is a primary concern to most of the world’s religions. It’s not a coincidence that the world’s most popular sacred text begins with an account of “original sin” that consists of “wanting more,” and in which the second sin was “kill someone who has what you wanted.” Feel free to call me a “dupe of the system” who only believes what he’s been told (Civil tone, eh?), but I am deeply skeptical that ANY economic system is going to free me or anyone from those kind of primal urges.
Of course, there is one economic school of thought that did think it could overcome those age-old instincts, and which consequently was pretty much hostile to most all religious traditions … hmmm …
Nobody in this thread has said capitalism is inerrant; we’ve all acknowledged the flaws. We’re merely pointing out that it’s the best system we’ve found yet for satisfying the most wants and needs of the most people. If you have a better solution – i.e. constructive criticism – the human race and everyone here would love truly love to hear it. If all you have is complaints, and a dishonest refusal to come clean about what you *do *advocate, not so much.
AFAICT your point is that you are wrong, show that you are wrong, and then obfuscate. Or perhaps you didn’t notice that your example above is just double-talk.
Again, this is just double-talk. You have not freed anything of anything subjective.
It’s not an illusion - it’s the only reason anyone would trade.
If you meant this -
Your wealth is increased when you work, because you are trading something (free time) for something you value more than free time (wages). If you were wealthy enough not to have to work, you would not make the trade of working instead of enjoying your free time. Because you only increase wealth by trading something you have for something you want more than what you have. If you already have money + free time, you do not value more money over less free time. So you don’t make the trade, because you don’t want the money more than the free time. If you have only free time, you make the trade and go to work.
The fact that you really, really want something does not imply that you are not increasing your wealth by obtaining it. I don’t want to starve, so I go to work. That doesn’t mean I am not better off/wealthier by not starving to death - just the opposite is true. I would have thought that was obvious.