Does anyone know of any work (either by an Austrian or non Austrian) that attempts to derive the value of money in terms of amount of some produce or an amount of hours worked. Perhaps something along the lines of, if there are X dollars in total in the society and (other things defined...) then on average each dollar will buy Y hours labour.
As an illustration, here is my own formulation: Imagine a very simple society in which there is only one commodity: sandwiches. Everyone in the land grows the ingredients for their sandwiches in their gardens. Often they will exchange sandwiches with their neighbours just for variety. There is no money in this society only barter. But then one day the king of the land says "I've just invented something I'm going to call money. It consists of metal coins called shekels. I will give everyone in the land 1000 shekels and from now on bartering is banned. All exchanges must be via the medium of exchanging shekels. What's more, nobody is allowed to eat their own sandwiches." The question now is: how many shekels will a sandwich cost? It may well be that on day one, people will not have a clue and all sorts of silly prices may get paid... but presumably over time the price will gravitate towards a certain value. What will that value be?
What Went Wrong with Economics
speculating
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
mickanomics:Agreed... its the other way round.
mickanomics: economics = psychology + maths.
mickanomics:No?... if your answer is no, then please answer me this question - if economics had not been invented, any you were put in charge of starting a world's first economics research institute, then from which academic fields would you choose your first researchers?
nirgrahamUK: speculating
Ok, how about this (page 48) "The manufacturer, however, would have adopted the machine only if it had either made better suits for half as much labor, or had made the same kind of suits at a smaller cost." This appears to be making predictions about the thoughts of "the manufacturer" and he's using this prediction of human behavior as a central part of his argument.
he' s telling a parable.
mickanomics: "But as most people are so firmly in the habit of thinking of their wealth and income in terms of money, they consider themselves better off as these monetary totals rise." Is HH "speculating" or "pursuing economic theory" with this sentence? If he is pursuing economic theory, can you explain the difference between his statements about human behavior and mine.
"But as most people are so firmly in the habit of thinking of their wealth and income in terms of money, they consider themselves better off as these monetary totals rise."
Is HH "speculating" or "pursuing economic theory" with this sentence? If he is pursuing economic theory, can you explain the difference between his statements about human behavior and mine.
Speculating, and perhaps poorly so (I"m not sure, because I don't know the context of that quote). It's not praxeologically certain that people don't notice their rising cost of living during an inflation and only their rising nominal income.
mickanomics:"The manufacturer, however, would have adopted the machine only if it had either made better suits for half as much labor, or had made the same kind of suits at a smaller cost." This appears to be making predictions about the thoughts of "the manufacturer" and he's using this prediction of human behavior as a central part of his argument.
Again, I can't say for sure without knowing the context, but he seems to be setting up a syllogistic thought experiment using a proposed actor with a GIVEN value scale, and logically inferring the apodictic implications of having said value scale. He's not making any prediction about any real future manufacturer.
Lilburne:with a GIVEN value scale
Could you explain that in a little more detail.
By the way you can find the context of the quotes with a search - a searchable copy of the book is online here.
nirgrahamUK: he' s telling a parable.
For a parable to be of any merit, it has to feature people who are behaving rationally. Therefore HH is making a statement about how people behave in general.
This thread is like a car crash and I am a rubber-necking highway gawker. I want to look away, but I can't.
nice non-sequitur. there is no warrant that I can see to move you from your premise to your conclusion. try again?
mickanomics:For a parable to be of any merit, it has to feature people who are behaving rationally. Therefore HH is making a statement about how people behave in general.
For a parable to be of any merit, it has to feature people who are behaving rationally. Therefore HH is making a statement about how people behave RATIONALLY
Snowflake:For a parable to be of any merit, it has to feature people who are behaving rationally. Therefore HH is making a statement about how people behave RATIONALLY
Ok then, am I allowed to say that the hungrier people are the more effort they will make to get food?
Am I allowed to say that someone who has just eaten a huge meal will barely make any effort to get some more food while someone who hasn't eaten for a week will make a huge effort to get some food?
these are all plausible claims.
yet they are far less plausable than when fixing the terms of your assumptive environment ("imagine a profit orientated entrepeneur etc" or in your case, "imagine someone motivated by hunger minimization"), and then reasoning from this. and then knowing that the job of using/applying the thought experiment is only half done. since the thymology of detecting who out there is such a person for you to apply your knowledge against must be done too.
nirgrahamUK:thymology
Wikipedia has just failed me... you'll have to help me out.
Thymology is a branch of history or, as Collingwood formulated it, it belongs in "the sphere of history."[9] It deals with the mental activities of men that determine their actions. It deals with the mental processes that result in a definite kind of behavior, with the reactions of the mind to the conditions of the individual's environment. It deals with something invisible and intangible that cannot be perceived by the methods of the natural sciences. But the natural sciences must admit that this factor must be considered as real also from their point of view, as it is a link in a chain of events that result in changes in the sphere the description of which they consider as the specific field of their studies.
Thymology is on the one hand an offshoot of introspection and on the other a precipitate of historical experience. It is what everybody learns from intercourse with his fellows. It is what a man knows about the way in which people value different conditions, about their wishes and desires and their plans to realize these wishes and desires. It is the knowledge of the social environment in which a man lives and acts or, with historians, of a foreign milieu about which he has learned by studying special sources. If an epistemologist states that history has to be based on such knowledge as thymology, he simply expresses a truism.
While naturalistic psychology does not deal at all with the content of human thoughts, judgments, desires, and actions, the field of thymology is precisely the study of these phenomena.