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Just Had a Thought On Pure Time Preference Theory

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Stephen Posted: Thu, Jul 19 2012 7:59 PM

Everyone know there's a debate going on among the Austrian over interest theories.

It's been a while since I read Hulsmann's paper. From what I can recall he goes to town on Mises by positing instances of negative time preference on Mises' PTP justifying arguments. I do not agree, however, with his assertion that the value of higher order goods is not imputed backwards from lower order goods. It clearly is. So his solution of value spreads between present and future goods is a fail.

I also think that homogeneous consumer goods can never be considered equally serviceable with respect to time. Just think of the the service rendered by food when you are hungry vs. full. Or air conditioning and heating over the seasons. 

It seems to me that time preference can only manifest itself, or value spreads (with respect to time) can only be demonstrated by allocation of non-time-specific producer goods, as their use can be considered interchangable with respect to time.

Thoughts, ladies and gentlemen?

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...non-time-specific producer goods...

Frinstance?

My humble blog

It's easy to refute an argument if you first misrepresent it. William Keizer

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I do not agree, however, with his assertion that the value of higher order goods is not imputed backwards from lower order goods. It clearly is. So his solution of value spreads between present and future goods is a fail.

I do not want to get into a debate about this now, but you might want to check out my posts in this thread. You have to keep in mind that producer goods can be created by their users instead of being bought. This prevents their prices from rising above a certain level--no matter what the expected profits are.

I think I'm going to have to read this paper. It sounds interesting.

"The limits of my language mean the limits of my world." ~ Ludwig Wittgenstein
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Stephen replied on Thu, Jul 19 2012 9:14 PM

 

...non-time-specific producer goods...

Frinstance?

Both land & labour.

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Productivity of land remains constant across seasons? Tell that to farmers.

Utility of land also trends a lot - think oil, for example.

Similar examples can be made for labor.

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