Defining value in terms of the willingness of people to spend is also stupid. That's why we say that the market overvalues or undervalues things - because we have a real value in mind. You say Bitcoin is a bubble. Why? Because you have some idea of the price it ought to have in mind. That real value obviously cannot be calculated by the willingness of people to spend - people can be idiots. — Agustino
And what do we do once liberated? — Agustino
I agree with you, but I don't think there exists this discrepancy between the material side and the spiritual side. I think, along with the likes of Socrates, that ironically, the one who "wins" spiritually also wins materially if that's his aim - but the converse isn't true - the one who wins materially isn't necessarily able to also win spiritually.Prayers don't generate profits, but profits are worthless to our soul. In which kingdom should you invest? — MysticMonist
If I neglect the spiritual side, then I am depressed and unmotivated, and so I can't be very productive — Agustino
So feel free to correct me on my Platonism
Can you quantify supply and demand? I've seen some people draw some charts based on some usually extrapolated data, but the whole procedure seems so unscientific, it's like empty guesswork for me. When I've tried to actually apply that theory in reality, I found that it has nothing to do with reality. I don't actually use supply and demand when deciding on prices. — Agustino
Mystic Dualist — Mitchell
value isn't defined by the person willing to buy the good or service and the whole thing an interaction between supply and demand. Hence there's the fundamental difference between Marxism and mainstream economics. — ssu
I think both systems are stupid. Defining value merely in terms of work makes no sense, since machines can also do useful work, and obviously, in Marxist terms, you ought not pay them a wage for it. Also some may do work faster than others. — Agustino
So to raise my price 100 times, I must produce 100 times as much value for that customer. If I can do that, I'm 100% sure I will be able to sell at x100 the price - why would anyone refuse? Figuring out how to do that though, isn't very easy. — Agustino
So if I make a website for an oil tank producer, where one sale is worth $1,000,000 on average, that is entirely different than if I make a website for a local coffee shop, where one sale is worth $5. I will charge the oil tank producer a lot more, even though it's about the same amount of work for me. — Agustino
Okay but then 10 hours of a software developer's time is worth more than 10 hours of a taxi driver's time? This does lead us to a situation where labour power is vastly different from one job to another.In Marx's view machines don't create new value like human labour power. Machines (that were all originally created through human labour power, and thus have value) merely transfer a portion of their value into each commodity they help produce until they have become used up or obsolete. Human labour power can produce new value over and above its labour price unlike machines which merely transfer value. — bloodninja
Agreed.This quote sounds Marxist to my ears. I'm thinking of a website like a machine. Like a machine, eventually the website will become redundant and need to be overhauled. Like a machine, contained in the website's value are the labour power (your qualifications and genius), the raw materials (software/hardware in this case), and the value transferred from other technologies (e.g. google analytics, etc). Like a machine, the website can be used in conjunction with fresh human labour power (in this case perhaps a marketing department?) to create new value over and above the value of the actual machine or website. — bloodninja
Depends on what you mean by "arbitrary". It's not arbitrary in the sense that I pick any number out there that meets my fancy and call that my price. But it is arbitrary in the sense that my price depends upon who is buying even though the work for client A and client B may otherwise be similar from a technical point of view. What they intend to do with the work is more relevant though - they're mostly looking to get clients through websites. So if I can better help one client with that, he will get charged more, since it's a slightly different service that way. I generally calculate a return value that my services will bring to my client, and then charge somewhere between 10-1% of that.I might have misread you, but this example you gave makes your website pricing look arbitrary. — bloodninja
And that's the problem - Marx seems to apply the one-equilibrium idea from supply-demand economics. But things don't trade at one equilibrium since they are more valuable for some people than for others. Return to my example:Marx looked at the economy from a socially average perspective. So for example, within our economy there are millions of website designers all trying to sell their product. The basic idea is that competition (and supply and demand) among website designers in conjunction with their socially average labour power (value) will determine a socially average exchange-value; not value but exchange-value. I feel like I'm ranting sorry.... — bloodninja
So I might charge the coffee shop somewhere between $200-1000 depending on their size. If I charge them $1000, then they need to sell roughly 200-300 cups of coffee through the website to recover that investment - from there, it's all profit for them.So if I make a website for an oil tank producer, where one sale is worth $1,000,000 on average, that is entirely different than if I make a website for a local coffee shop, where one sale is worth $5. I will charge the oil tank producer a lot more, even though it's about the same amount of work for me. — Agustino
So suppose each person can produce 10 websites by himself in a month, and each website costs $200. So that means, if they were to work individually, they would make $2000 assuming they could source the work themselves. — Agustino
So if I make a website for an oil tank producer, where one sale is worth $1,000,000 on average, that is entirely different than if I make a website for a local coffee shop, where one sale is worth $5. I will charge the oil tank producer a lot more, even though it's about the same amount of work for me. — Agustino
Generally to coffee shops. To sell to oil tank producers you don't have to be a good developer, you have to be a good salesman. Those are two different skills. In the case where you're the independent developer, you can combine sales skills with development skills - you cannot just assume that someone who would work independently as a developer also has the sales skills. Most don't. Sales skills are actually the ones which are worth the most.So putting your two arguments for the calculation of value together, what value does the boss in the first example use to determine what his employees 'could' earn on their own, if what a website designer 'could' earn is not a fixed rate anyway? Does he use the wage they 'could' earn by selling to oil tank producers or the one they 'could' earn by selling to coffee shops? — Inter Alia
Sure, soon you're going to tell me that the invisible hand also puts money in my pocket :-}Typically the invisible hand does that for you. — Posty McPostface
No, there's more expensive and less expensive types of bread. And as I previously said, the closer a product or service is to being a commodity, the more real value approximates market value, meaning that the market does not overvalue or undervalue it.But, you pay for the bread at a similar average amount every week, don't you? — Posty McPostface
As said, Marx bases his theory of value on the total amount of necessary labor required to produce a good, rather than by the use or pleasure its owner gets from it. And it's Marx that is forgetting demand.I'm saying this from a Marxist perspective. If everything you said is true then it follows that the difference between Marxism and mainstream economics is that the latter does not discuss value as such. What Marx calls value has nothing to do with supply and demand as you say, however, within Marxism the price of commodities is somewhat determined through supply and demand. Marx terms this 'value' of the price of commodities 'exchange value'. To me, from what you say, it seems like mainstream economics only wants to discuss 'exchange value' which they term 'value'. Am I confused, or are there many ambiguities here? — bloodninja
(Karl Marx Capital,the quote in the end of section 1 here)nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value.
There are also those people who are ignorant of some academic field of study and proclaim it to be non-scientific and wrong and consider the truth of it to be how they think and operate themselves. ;)Sure, soon you're going to tell me that the invisible hand also puts money in my pocket :-}
When people don't understand how something happens, they postulate non-scientific entities like "invisible hands", "powers" (opium having sleeping powers), and the like, thinking they have explained the matter, while actually they left things as unexplained as before. — Agustino
The answer to the question "What Is Value?" needs to focus on Intrinsic Value. Utility is only extrinsic value. Something is useful only if it leads to something (intrinsically) value*.
Sure there must be. And they're probably right usually. Practice beats theory in economics. But in my case, I have studied my fair share of economic theory - was it helpful for anything? Nope. What use that I understand the relationship between maximising profitability and making my marginal revenue = marginal cost, etc? In fact, economics is one of the most frustrating sciences precisely because it is so useless in its current form. That is evidenced by nobody from the supply-demand side in this thread being able to answer my questions and charges.There are also those people who are ignorant of some academic field of study and proclaim it to be non-scientific and wrong and consider the truth of it to be how they think and operate themselves. ;) — ssu
Arbitrage is buying one good from one market, and selling onto a different market at a higher price.How is arbitrage possible then? — Posty McPostface
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