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
Caley McKibbin: I don't understand this guy. He comes to a forum where he knows people will argue with what he says and puts his beliefs out there. But he fights to the last drop to defend them every time.
I don't understand this guy. He comes to a forum where he knows people will argue with what he says and puts his beliefs out there. But he fights to the last drop to defend them every time.
I use this forum to A) Learn new things and B) test my ideas. I have found it very useful in both regards, although the emotional price I have to pay in terms of being abused makes it quite a painful process. Part of the reason I choose *this* forum as opposed to any other is because I consider myself 80% Austrian in my thinking. I judge this by how much I find myself agreeing with assorted Austrian principles and by how much I agree with Peter Schiff in particular. The other reason is that this forum appears to be very busy, indeed if I post something here I usually get an answer within minutes (even if that answer is just filc calling me a moron!). I did spend some time a while back looking for alternative economics forums, but found that they were actually more about trading/dealing or that they were tiny. If anyone here would like to suggest an alternative forum where there a significant number of postings about fundamental economic principles (as opposed to trading) then I would be most grateful. This may even lead to the added benefit of getting rid of me.
mickanomics:I consider myself 80% Austrian in my thinking.
How so? You're not for free markets, you don't employ methodological individualism, praxeology or the STV.
Sorry Mick, but I don't think you have anything substantively Austrian in your arguments.
mickanomics:If anyone here would like to suggest an alternative forum where there a significant number of postings about fundamental economic principles
You haven't yet begun to debate fundamental economic principles. You simply create "mickanomics" ad hoc.
mickanomics:This may even lead to the added benefit of getting rid of me.
Getting rid of you isn't a benefit. You might go somewhere else and tell people your ideas are 80% [sic] Austrian.
liberty student:Sorry Mick, but I don't think you have anything substantively Austrian in your arguments.
It would not be very interesting for me to put up posts saying I agree with this or that bit of AE. So I guess you don't get too see the parts I agree with. Suffice it to say that I agreed with 80% or more of everything I read in "economics in one lesson".... and I agree with 90% of everything Peter Schiff ever says.
liberty student:You haven't yet begun to debate fundamental economic principles.
Discussing "the purchasing power of money" seems pretty fundamental to me.
liberty student:Getting rid of you isn't a benefit. You might go somewhere else and tell people your ideas are 80% [sic] Austrian.
Heeeeeelllpppp! I've been imprisoned!
mickanomics:Discussing "the purchasing power of money" seems pretty fundamental to me
Snowflake:Robinson Crusoe and his piles and piles of money...
The purchasing power of money as a function of X, Y and Z.
mickanomics:Suffice it to say that I agreed with 80% or more of everything I read in "economics in one lesson"....
What does that mean?
mickanomics:I agree with 90% of everything Peter Schiff ever says.
90% of what Schiff says is just demagoguery and investment advice. It isn't economics.
mickanomics:Discussing "the purchasing power of money" seems pretty fundamental to me.
The market determines purchasing power. How you could read HH and not understand that is beyond me. Maybe it is the 20% you don't agree with?
mickanomics:Heeeeeelllpppp! I've been imprisoned!
With your PhD in neural networks I am sure you will be able to hatch an escape.
there is no equation which determines the purchasing power of money. money has purchasing power to the extent that it can be used to buy things. to the extent that people are happy to trade it.
im not sure what question you are trying to answer to your own satisfaction..
is it the question, why does money have any purchasing power at all?
is it the question, why did money have the precise 'quantity' of purchasing power as it did last tuesday at 10:05am?
is it some other question?
im not sure whether you have questions concerning units of money i.e. '1 unit of currency', or about the sum of all money 'all the currency'
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: Snowflake:Robinson Crusoe and his piles and piles of money... The purchasing power of money as a function of X, Y and Z.
mickanomics: The purchasing power of money as a function of X, Y and Z.
Human action determines prices. Human action isn't math.
nirgrahamUK:is it the question, why does money have any purchasing power at all?
No. (that may be a good and interesting question - but its not what I'm asking).
nirgrahamUK:is it the question, why did money have the precise 'quantity' of purchasing power as it did last tuesday at 10:05am?
Yes (Although that question may be too ambitious in the first instance so I'd like to perhaps work out what it will be in a super simple model to start with and then gradually add details to the model).
nirgrahamUK:im not sure whether you have questions concerning units of money i.e. '1 unit of currency', or about the sum of all money 'all the currency'
1 unit. (although of course the purchasing power of 1 unit may well be determined by the total amongst other factors).
... I seem to be getting drawn back in to this discussion after announcing that I would stop... what I'm also after now is an alternative forum.
mickanomics: ziragt:You may not think it is the LTV, but it is at least a variant, from what I can tell. Absolutely 100% not.
ziragt:You may not think it is the LTV, but it is at least a variant, from what I can tell.
Absolutely 100% not.
You are asking us to determine prices for a good without knowing the individual preferences which every acting individual chooses. This is impossible. Individuals value different kinds of sandwiches entirely differently. Each person will apply a different value to each. Any theory attempting to start from any other point will invariably fail. Perhaps read a bit more about Austrian thought and some of its core theories.
I understand the excitement that comes with 'solving' these kind of situations. Unfortunately when starting with fallacious principles, you will never have a truly correct theory. You can design some amazing structures if you pay no heed to gravity.
Giant_Joe: mickanomics: The purchasing power of money as a function of X, Y and Z. Human action determines prices. Human action isn't math.
Furthermore, while human actors do concern themselves with quantities, the subjective valuations of those quantities are ever in flux, so any function you set up, at best, can only represent a single complex of value scales only in existence for a fleeting moment in time.
Your eternal function is a chimera, because algebraic functions require constants, and there are no constant ratios in human action.
mickanomics:Yes (<cut>).
mickanomics:(for) 1 unit..
mickanomics:what I'm also after now is an alternative forum.
Maybe one where there are other people with PhDs who don't like to read?
liberty student: with your PhD in neural networks
with your PhD in neural networks
Is that serious? cause i thought it was physics over a month ago, and then i saw micka.. respond on another occassion it's in math. idk anymore. obviously in regards to this i could be simply malinformed.
i'm still waiting from the very beginning that micka.. came here to help central plan me getting a 20X20 swimming pool. i really haven't seen anything other than that kind of attempt from him since. i bring this up as micka... mentions he's searching for an alternative forum. maybe it's about time, but what is the equation of true time in the market place?