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Austrian Analysis by Anecdote » Find the Austrian Theory for This Factor Price
Find the Austrian Theory for This Factor Price

 

A single worker can, in one hour, produce a paperweight as described below.

Find the Austrian Theory that deals with the wage rate that the worker earns.

 

Paperweight Description :

Name - FRN-Brick Paperweight

Market Price - $200

Manufacturing Process - Start with a clean freely available brick and cover by pasting one of each of the standard Federal Reserve Notes with a face value of $100 or less. ($100, $50, $20, $10, $5, $1)

 

What can we deduce about the wage rate that the worker earns and quote an Austrian Theory source that supports that answer.

 

 

Posted Sun, Aug 3 2008 11:06 AM by Don Lloyd
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Comments

MatthewWilliam wrote re: Find the Austrian Theory for This Factor Price
on Mon, Aug 4 2008 5:33 AM

What is the wage rate of the person who throws this brick through a glass window?  ;)

MatthewWilliam wrote re: Find the Austrian Theory for This Factor Price
on Mon, Aug 4 2008 4:25 PM

To take a genuine stab at this, the cost of the inputs are

(capital: brick approx. = $0, FRN = $186)

The worker turns $186 of goods into something worth $200 every hour. The productivity theory of value claims the wage tends toward the level of productivity of the worker: $14 per hour.

Could it be that simple. Am I a dolt?

Don Lloyd wrote re: Find the Austrian Theory for This Factor Price
on Tue, Aug 5 2008 1:48 PM

MW,

I agree with your $14 answer, but still can't identify an Austrian statement of theory that seems to match this problem.

AFAIK, all or most of the Austrian statements are restricted to a Discounted Marginal Revenue Product ($200) point of view and there seems to be a reluctance to add up factor costs.

Admittedly, I have not undertaken an exhaustive search.

Regards, Don