But as physics and confirmed by neuro-psychology, will explain to you, there isn't something like free-will. I mean, really.
Are you seriously insinuating human beings really are no more complicated than molecules bouncing around in a hot gas?
I doubt they think about it this way but, if I understand the LTV'ers correctly, prices of goods should always be just slightly higher than the cost of employing someone to make it. Therefore prices cannot fall unless wages fall as well. Easily falsifiable and is dead wrong. >>> And as statistics can explain you, you can still drown in a river that is on average only 50 cm deep.
And as statistics can explain you, you can still drown in a river that is on average only 50 cm deep.
You misunderstand. My statement was that the standard of living can never rise, as workers can never gain more value on average in terms of products purchased with wages than they give out in terms of labor, as the prices always hover around the value of labor. By this logic we should all still be in the stone ages but obviously we are not. How do you explain this with LTV?
Also the Venus Project people are way smarter than Mr. Cockshott.
So if a Golden Age comic book and a brand new BMW sell for the same price does that mean the same amount of labor went into creating them? Somehow I doubt it....
Furthermore, why do collectables(like vintage comic books) tend to appreciate in price? If the LTV is true, shouldnt they always sell for the same price(except maybe to adjust for inflation)?
EDIT TO ADD: I'm probably gonna regret asking, but what the hell is the 'Venus Project?'
The Venus Project (also known as Zeitgeist) people are basically communists who think the only thing the system needs to work is a giant superintelligence to run the economy. They also more infamously have no idea how money works and describe it with the infantile "token of permission" theory. That is, the capitalists and producers actually have an unlimited supply of everything, and the green pieces of paper just tell them who is allowed to eat and who is not. Overthrow the capitalist class and remove the money system and we'll have superabundance! This is what they refer to by their "resource-based economy."
And, most annoyingly, they think the only way someone could sincerely reject their ideas is due to "cultural conditioning."
Thanks....I actually found their webpage by googling them...
All I have to say is....Wow, I'v always known that Communism would only work in a world without scarcity. But I never imagined that there would be people who outrightly deny the problem altogether. They arent even making the claim that it can/might be solved wish some super advanced technology at some unspecified point in the future(an impossibility without overturning the laws of physics), but that its actually solved RIGHT NOW....wow...
Azure wrote:
<<< Are you seriously insinuating human beings really are no more complicated than molecules bouncing around in a hot gas? >>>
No, and why do you think so?
As computers are based on electronics, this neither would lead to the conclusion that computers are no more complicated as electrons bouncing around.
But you got to know that what we commonly perceive as having "free will" in reality does not exist (at least not in the way we think it is), as has been explored by neuro-psychology over and over again.
It has been confirmed that our brains already make a decission before we are consciouss of our actions/decissions, and also it can be confirmed that our consciouss approach to why we did something, has nothing to do with the determination of our actions.
As for instance in an experiment in which people get to decide which kind of socks they prefer, but were given 4 identical pairs. In most cases people did have a preference (often the 3-rd or 4-th pair of socks) and also explained why thy found it was better. Yet, that couldn't have been the case as all socks were identical.
filc wrote:
<<< Any how Rob, answer my questions. What determines use-value? >>>
Use value is defined by the applicability useablitiy of a certain good. You can Google that up.
<<< And if I am producing a good, and I spend more labor hours into producing is it magically now worth more in the eyes of consumers? >>>
You already know the answer to that one, and is not hard to reason why that is the case.
<<< You misunderstand. My statement was that the standard of living can never rise, as workers can never gain more value on average in terms of products purchased with wages than they give out in terms of labor, as the prices always hover around the value of labor. By this logic we should all still be in the stone ages but obviously we are not. How do you explain this with LTV? >>
Of course the standard of living can rise, as the capitalists invest part of their money in less labour intensive ways of production, which in fact means that the relative exploitation increases (the amount of surplus value grows harder then the wages).
Sieben wrote:
<<< You can't aggregate preferences. >>>
Of course you can aggregate preferences. If there are 3 favlours of ice cream available on the market, it can of course be deterermined in aggregate which ice crea flavour is preferred.
<<< The overall market price is the result of supply and demand, not the summing up of everyone's ordinal utility >>>
But that is the whole argument of the article, the market prices DO relate to the amount of labour put in it, as can be shown at the basis of statistical investiagtion of market prices.
That is why nothing is charged (as of yet) for the air you breathe (except for in some exceptional conditions), but you do have to pay for things like gas and oil, even when both are available natural products. But gas and oil, other then the air, do require labour to exploit and distribute, the air does not.
'Of course you can aggregate preferences. If there are 3 favlours of ice cream available on the market, it can of course be deterermined in aggregate which ice crea flavour is preferred.'
That assumes that preferences remain constant.
'But that is the whole argument of the article, the market prices DO relate to the amount of labour put in it, as can be shown at the basis of statistical investiagtion of market prices.'
The explain the price increase of 19th century gold coins or a first edition of Romeo & Juliet
'That is why nothing is charged (as of yet) for the air you breathe (except for in some exceptional conditions), but you do have to pay for things like gas and oil, even when both are available natural products.'
Would oil be costly if it was in every individual's backyard? Keep in mind that refinement and processing are not what makes oil valuable for it is actually traded in crude form. If it yes then you are completely denying the concept of supply and demand.
'Men do not change, they unmask themselves' - Germaine de Stael
Smiling Dave:
<<< So the whole history of mankind is predetermined to the end of time. No point in arguingabout anything then, hey? >>>
Now this is of course trying to make a mockery of this, but at the same time anyone accepts the fact that the outcomes of our decissions can be determined by conditions outside of us.
As for instance, anyone can freely make a choice wether to go on vacation on not. But then it shows that there is a statistical significance that in years in which the economy is bad, less people decide to go on vacations as in years in whicht the economy was sufficiently good.
So, we are already used to the fact that our decissions are in fact and partly determined by other conditions.
So the real issue is, what in fact do we consider free will to be, how can it be properly defined, without denying any fact that science can bring up to explain the real motives of our actions.
Andrew Cain wrote:
<<< That assumes that preferences remain constant. >>>
No, I don't asume that. But as preferences change, also the consumption patterns change. And by the way, it could also be that we ran out of a certain flavour (temporarily), and then another flavour becomes favourite. But did our preference change, or was there another factor that defined our consumption?
<<< The explain the price increase of 19th century gold coins or a first edition of Romeo & Juliet >>>
These are exceptional cases, as we normally deal with commidities that are produced in sufficient quantities, and which we need for daily life.
It doesn't mean that the LTV is not valid for ordinary goods.
<<< Would oil be costly if it was in every individual's backyard? Keep in mind that refinement and processing are not what makes oil valuable for it is actually traded in crude form. If it yes then you are completely denying the concept of supply and demand. >>>
So what do you think?
Also please consider that crude oil still requires labour, cause the oil is not running out of the well all by itself, and needs at least also transport and packaging. So there is labour. And as simple to get oil gets less abundant, we need to dig deeper holes or get oil in other regions, which then means more labour is necessary for producing the same amount of crude oil.
Now, if crude oil was abundantly avaliable everywhere without requiring any labour, just guess that would do with the price...
No, and why do you think so? As computers are based on electronics, this neither would lead to the conclusion that computers are no more complicated as electrons bouncing around.
Because that's what you implied.
But you got to know that what we commonly perceive as having "free will" in reality does not exist (at least not in the way we think it is), as has been explored by neuro-psychology over and over again. It has been confirmed that our brains already make a decission before we are consciouss of our actions/decissions, and also it can be confirmed that our consciouss approach to why we did something, has nothing to do with the determination of our actions.
You're arguing semantics. Is it you who makes your decisions or is it your brain and its various inputs? They're different levels of analysis of the same thing. It's a bit like arguing over whether it's the hull that makes a ship float or the planks.
Decisions being made up of the interactions between neurons (and the neurons themselves ultimately being the interaction of quanta) doesn't mean the decisions don't exist. Your thoughts and feelings (that is, the computations performed by your brain) definitely do exist and it does make sense to talk about their properties.
And this proves people don't have thoughts and feelings... how? It displays a flaw in cognition, sure, but it doesn't disprove cognition altogether.
It's called opportunity cost. We Austrians understand it quite well. Better than you do, methinks.
Now this is of course trying to make a mockery of this, but at the same time anyone accepts the fact that the outcomes of our decissions can be determined by conditions outside of us. So, we are already used to the fact that our decissions are in fact and partly determined by other conditions. So the real issue is, what in fact do we consider free will to be, how can it be properly defined, without denying any fact that science can bring up to explain the real motives of our actions.
The underlying causes of motivaitons are of no relevance to Praxeology. I'll let Mises take this one:
The Historical School and Institutionalism condemn economics for disregarding the role that power plays in real life. The basic notion of economics, viz., the choosing and acting individual, is, they say, an unrealistic concept. Real man is not free to choose and to act. He is subject to social pressure, to the sway of irresistible power. It is not the individuals' value judgments but the interactions of the forces of power that determine the market phenomena. These objections are no less spurious than all other statements of the critics of economics. Praxeology in general and economics and catallactics in particular do not contend or assume that man is free in any metaphysical sense attached to the term "freedom." Man is unconditionally subject to the natural conditions of his environment. In acting he must adjust himself to the inexorable regularity of natural phenomena. It is precisely the scarcity of the nature-given conditions of his welfare that enjoins upon man the necessity to act. In acting, man is directed by ideologies. He chooses ends and means under the influence of ideologies. The might of an ideology is either direct or indirect. It is direct when the actor is convinced that the content of the ideology is correct and that he serves his own interests directly in complying with it. It is indirect when the actor rejects the content of the ideology as false, but is under the necessity of adjusting his actions to the fact that this ideology is endorsed by other people. The mores of their social environment are a power that people are forced to consider. Those recognizing the spuriousness of the generally accepted opinions and habits must in each instance choose between the advantages to be derived from resorting to a more efficient mode of acting and the disadvantages resulting from the contempt of popular prejudices, superstitions, and folkways. The same is true with regard to violence. In choosing, man must take into account the fact that there is a factor ready to exercise violent compulsion upon him. All the theorems of catallactics are valid also with regard to actions influenced by such social or physical pressure. The direct or indirect might of an ideology and the threat of physical compulsion are merely data of the market situation. It does not matter, for instance, what kind of considerations motivate a man not to offer a higher bid for the purchase of a commodity than the one he really makes without obtaining the good concerned. For the determination of the market price it is immaterial whether he spontaneously prefers to spend his money for other purposes or whether he is afraid of being looked upon by his fellow men as an upstart, or as a spendthrift, afraid of violating a government-decreed ceiling price or of defying a competitor ready to resort to violent revenge. In any case his abstention from bidding a higher price contributes to the same extent to the emergence of the market price. It is customary nowadays to signify the position the owners of property occupy on the market as economic power. The expediency of this terminology is questionable. The term is at any rate inappropriate as far as it is intended to imply that under the impact of economic power the determination of the market phenomena is controlled by laws other than those dealt with by catallactics.
These objections are no less spurious than all other statements of the critics of economics.
Praxeology in general and economics and catallactics in particular do not contend or assume that man is free in any metaphysical sense attached to the term "freedom." Man is unconditionally subject to the natural conditions of his environment. In acting he must adjust himself to the inexorable regularity of natural phenomena. It is precisely the scarcity of the nature-given conditions of his welfare that enjoins upon man the necessity to act.
In acting, man is directed by ideologies. He chooses ends and means under the influence of ideologies. The might of an ideology is either direct or indirect. It is direct when the actor is convinced that the content of the ideology is correct and that he serves his own interests directly in complying with it. It is indirect when the actor rejects the content of the ideology as false, but is under the necessity of adjusting his actions to the fact that this ideology is endorsed by other people. The mores of their social environment are a power that people are forced to consider. Those recognizing the spuriousness of the generally accepted opinions and habits must in each instance choose between the advantages to be derived from resorting to a more efficient mode of acting and the disadvantages resulting from the contempt of popular prejudices, superstitions, and folkways.
The same is true with regard to violence. In choosing, man must take into account the fact that there is a factor ready to exercise violent compulsion upon him.
All the theorems of catallactics are valid also with regard to actions influenced by such social or physical pressure. The direct or indirect might of an ideology and the threat of physical compulsion are merely data of the market situation. It does not matter, for instance, what kind of considerations motivate a man not to offer a higher bid for the purchase of a commodity than the one he really makes without obtaining the good concerned. For the determination of the market price it is immaterial whether he spontaneously prefers to spend his money for other purposes or whether he is afraid of being looked upon by his fellow men as an upstart, or as a spendthrift, afraid of violating a government-decreed ceiling price or of defying a competitor ready to resort to violent revenge. In any case his abstention from bidding a higher price contributes to the same extent to the emergence of the market price.
It is customary nowadays to signify the position the owners of property occupy on the market as economic power. The expediency of this terminology is questionable. The term is at any rate inappropriate as far as it is intended to imply that under the impact of economic power the determination of the market phenomena is controlled by laws other than those dealt with by catallactics.
lol@physical sciences having any bearing on economic theory. Even Marx knew better.
“Socialism is a fraud, a comedy, a phantom, a blackmail.” - Benito Mussolini"Toute nation a le gouvernemente qu'il mérite." - Joseph de Maistre
Does the second flavor retain its popularity as the first becomes more available? Either way from the perspective of economics it is quite pointless to try to figure out what people's specific preferences are. All that needs to be known is whether or not preferences (in the strict, praxeological definition) exist, and obviously they do.
These are exceptional cases, as we normally deal with commidities that are produced in sufficient quantities, and which we need for daily life. It doesn't mean that the LTV is not valid for ordinary goods.
First of all what defines an ordinary good? And why is the theory of price formation which determines the prices of these exceptional goods not able to explain the prices of these "ordinary" ones?
Secondly I can't help but notice you keep making exceptions to what the LTV applies to. Can you tell us exactly what the LTV does apply to?
Also please consider that crude oil still requires labour, cause the oil is not running out of the well all by itself, and needs at least also transport and packaging. So there is labour. And as simple to get oil gets less abundant, we need to dig deeper holes or get oil in other regions, which then means more labour is necessary for producing the same amount of crude oil. Now, if crude oil was abundantly avaliable everywhere without requiring any labour, just guess that would do with the price...
He's not saying it wouldn't take any effort to extract. He's proposing the scenario that oil would spurt out of the ground wherever you erected a well.
And if there is a sudden drop in the supply of oil, why does the price of it suddenly shoot up, even though the labor required to extract, package, and transport it remains the same? Or does it stop being an "ordinary" good as soon as the price does something the LTV can't explain?
'No, I don't asume that. But as preferences change, also the consumption patterns change. And by the way, it could also be that we ran out of a certain flavour (temporarily), and then another flavour becomes favourite. But did our preference change, or was there another factor that defined our consumption?'
Well your saying that aggregates represent large scale preferences. However there is nothing to assume that these aggregates represent anything beyond that specific time. They have no future predictive power. I could like vanilla one second, and then try strawberry and fall in love with that the next.
'These are exceptional cases, as we normally deal with commidities that are produced in sufficient quantities, and which we need for daily life.'
So the non-reproducible market is not a realm of economic science?
'It doesn't mean that the LTV is not valid for ordinary goods.'
Then you suggest that there are two different theories of prices but why must we assume this? Why is it labor theory for reproducible goods but some unknown theory for non-reproducible goods? And what for that matter is the price system for these 'non-ordinary goods'?
'Also please consider that crude oil still requires labour, cause the oil is not running out of the well all by itself, and needs at least also transport and packaging. So there is labour. And as simple to get oil gets less abundant, we need to dig deeper holes or get oil in other regions, which then means more labour is necessary for producing the same amount of crude oil.'
Crude oil does not take labor to create and yet crude oil still has value based on volume by barrel. Now if you are saying that it gets it value of extraction and transportation then you are, for my knowledge, projecting a cost of production theory of prices, not a labor theory.
Now if you are saying that it gets it value of extraction and transportation then you are, for my knowledge, projecting a cost of production theory of prices, not a labor theory.
Isn't labor a cost of production? Just sayin'.
'Isn't labor a cost of production? Just sayin'.'
Well that's what I am trying to figure out. Firstly, he is saying there is a separate way for two different aspects of the market, reproducible and non-reproducible goods. He is saying that labor makes price but that oil is costly because of the operations necessary to extract it. It's like he is trying to jumble together Capital Volume I and Volume II & III.
A marxist is spouting nonsense? Stop the presses!
Out of curosity: what if we manage to reach a point where we dont need oil for anything anymore? That is to say 'renewable' energy sources become efficent enough to replace all our energy needs, we make well working electric cars, and we even mange to create economical replacements for jet fuel and petroliem based plastics....What would happen to the price of oil then?
Well that's what I am trying to figure out. Firstly, he is saying there is a separate way for two different aspects of the market, reproducible and non-reproducible goods.
Yes it seems to me Occam's Razor can be applied here: We need (at least) two seperate theories of price for the LTV to work. At least one of which involves a complex relationship of labor, 'use value' and lord knows what other factors to have real explanatory power.
The SVT, otoh, can very simply explain the price of everything from a can of Coke to an original copy of Batman #1.
I know which of these can be 'shaved' away.....
Yes it seems to me Occam's Razor can be applied here: We need (at least) two seperate theories of price for the LTV to work. At least one of which involves a complex relationship of labor, 'use value' and lord knows what other factors to have real explanatory power. The SVT, otoh, can very simply explain the price of everything from a can of Coke to an original copy of Batman #1. I know which of these can be 'shaved' away.....
Even simpler is the Magic Theory of Value (MTV). Prices are simply magic that can't be understood or explained in any way.
It doesnt seem to be much use for economic analisis though....
<<< Isn't labor a cost of production? Just sayin'. >>>
Sure. Labor is a commodity too.
Rob Heusdens: ... anyone accepts the fact that the outcomes of our decissions can be determined by conditions outside of us. As for instance, anyone can freely make a choice wether to go on vacation on not. But then it shows that there is a statistical significance that in years in which the economy is bad, less people decide to go on vacations as in years in whicht the economy was sufficiently good. So, we are already used to the fact that our decissions are in fact and partly determined by other conditions. So the real issue is, what in fact do we consider free will to be, how can it be properly defined, without denying any fact that science can bring up to explain the real motives of our actions.
... anyone accepts the fact that the outcomes of our decissions can be determined by conditions outside of us.
That's a valid point, at first glance.
But let me ask you, what happens to people when the economy is bad?. Do they lose control of their decision making faculty? Are they taken over by a zombie? I don't think so. I mean, just because we know what people will choose, doesn't mean they didn't choose it. A subtle point, but a true one.
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
Rob, I'm still waiting to here how price develops for non-reproducible goods. That along with some other questions I had.
As well as my question about the price of oil.....
Neither is the LTV. And the MTV has the advantage of not running into all of those silly contradictions the LTV constantly finds itself banging up into.
So, if you wanted open heart surgery I'm sure you would go find a construction worker to do it, am I right? Afterall, if labor is a commodity, then you would be indifferent between all "units of labor".
"I cannot prove, but am prepared to affirm, that if you take care of clarity in reasoning, most good causes will take care of themselves, while some bad ones are taken care of as a matter of course." -Anthony de Jasay
To play Devil's Advocate for a moment, the labor value on a service is not only the bodily energy or time that goes into performing it. It also includes the years of preparation a trained doctor has went through in order to learn how to perform such procedures.
To make an analogy, consider a man who builds a house and sells it. The most recent labor he has performed is selling the house to you, but does that mean this is the only service he should be compensated for? Likewise the Doctor has not only taken the time and performed the physical motions required to perform heart surgery, he has also done the very laborious work involved up until that point. He deserves compensation for all the labor he has done, even the labor that is unseen to the customer.
That said this isn't how LTV'ers usually phrase it, as most of them really do think doctors should be paid the same as construction workers.
That is like saying that coal and diamonds are the same commodity but more years of preperation went into the making of the diamond, so it commands a higher price. It contradicts the definition of a commidity to claim that two units of the same commodity are qualitatively different.
A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market.
-Wikipedia
Solid_Choke:It contradicts the definition of a commidity to claim that two units of the same commodity are qualitatively different
We can always assume that whoever decides what a "commodity" is can be generalizing. Although at a certain miniscule level such generalizations become frivolous.
But define frivolous. This is after all a forum practically bursting with frivolosity, i.e. how many angels are really dancing on the head of one pin?
I think we suffer from a "think too hard and come up with ridiculous conclusions that no body cares about in the real world" syndrome.
@Liberte
Yeah, I am not kidding one bit when I say that leftists once used to be cool. At least, a league above today's leftists. Which is why so many early socialists were converted away by Bohm Bauwek, Mises, and Hayek.
Prateek Sanjay: @Liberte lol@physical sciences having any bearing on economic theory. Even Marx knew better. Yeah, I am not kidding one bit when I say that leftists once used to be cool. At least, a league above today's leftists. Which is why so many early socialists were converted away by Bohm Bauwek, Mises, and Hayek.
"Even Marx knew better"
I was under the [mistaken?] impression [via LVM], that Marx' was actually in agreement with the classical economists and their underlying [false] assumption of the truth of their own "economic man" model - that in fact Marx and the classical economists shared this false, core assumption [i.e. the truth /relevance of the economic man model], and that Marx just "took the ball and ran with it" so to speak [that ball being "economic man"] , finally producing his own, labor theory of value.
It just goes to show how far off conclusions made with straightforward logic can be when the underlying assumptions upon which that logic is built remain unquestioned-and wrong.
regards, onebornfree.
For more information about onebornfree, please see profile.[ i.e. click on forum name "onebornfree"].
Yea Marx was really just building on what the Classical economists thought.
Although forms of the labor theory of value have been around since Aristotle's time. So it would seem the classical economists were just building on what was passed down to them....