Time Value of Money

[Moral Hazard]

Ah, so now we are allowed to create value. Great system, NOT!

Your reply makes no sense. It allocates capital where it will help labor create the most value by *ding *ding *ding working.

[Japher]

I always wondered why gold costs so much. It can't be because of the scarcity. I mean, there is plenty of rare crap out there that no one wants. Why this one metal?

Is only "worth" that much because people are willing to "pay" that much for it? Is the price determining the worth? Is worth not value?

[Flip McWho]

Selling the good or service for more than is costs to produce it does not create value.

Well in a way it does create its value. Artificially yes but it still creates its value. Going back futher, your willingness and desire to pay the market price for a product means that your willingness and desire to have that product creates its value.

[Kidlicious]

Originally posted by Flip McWho


Well technically your money didn't create candy bars, correct. But you desire to have candy bars and your willingness to pay $$ for it means that there is a market for candy bars. So in a way your money did create candy bars but only by acting through your desire. Money is a medium, not a beginning or end in of itself.

You have to get money to buy the candy bars. Money, in so far as it stores value, does so because some where someone worked. Therefore buying candy bars only creates value in so far as someone working to pay for those candy bars. That's not to say that the person who worked for those candy bars consumed the bars, because as we know money is compensated for itself, without any regard for work.

[Kidlicious]

Originally posted by Moral Hazard

Ah, so now we are allowed to create value. Great system, NOT!

Your reply makes no sense. It allocates capital where it will help labor create the most value by *ding *ding *ding working.

Who cares? Work is not maximized in a capitalist system. Only money is.

[Flubber]

Originally posted by Kidicious

I ignore Flubber. Isn't that obvious? He's quite annoying.

I'm honored. . .. I don't believe I have been ignored before . I guess reality is annoying to your worldview.

[Kidlicious]

Originally posted by Japher
I always wondered why gold costs so much. It can't be because of the scarcity. I mean, there is plenty of rare crap out there that no one wants. Why this one metal?

Is only "worth" that much because people are willing to "pay" that much for it? Is the price determining the worth? Is worth not value?

It actually costs a lot to extract gold. Look at all the 49ers. A lot of work was done to get that gold out. A lot of work was done also to support the 49ers. That being said gold was sold at a greater price than its value.

[Japher]

But the gold still doesn't cost 20cents an ounce like it did back in 1849... why is that?

[Flip McWho]

You have to get money to buy the candy bars. Money, in so far as it stores value, does so because some where someone worked. Therefore buying candy bars only creates value in so far as someone working to pay for those candy bars. That's not to say that the person who worked for those candy bars consumed the bars, because as we know money is compensated for itself, without any regard for work.

Thats true. But your work is paid for through someones desire and willingness to buy your product. Take for example the person who makes candy bars. He works one hour and makes ten candy bars. Puts candy bars in the store at $10 a candy bar. Nobody buys candy bars. So he drops price to $1 a candy bar. Now candy bars sell. He pays running costs of his business. Amongst these is wages. People get paid for creating something somebody is willing to pay money for. The only reason the monetary system is used is because the world grew to big for the barter system to work. I have a funny feeling that the barter system is more in your world view but I could be wrong.

[Flubber]

Originally posted by Kidicious


Who cares? Work is not maximized in a capitalist system. Only money is.

Really-- well I work more and harder because that earns me more money. In a communist system I would sit on my a$$ with the rest and wait for my share. A LOT of people would feel the same.

I'm actually enjoying the freedom of kid not reading this stuff-- It frees me from his continual assertions of being misunderstood or misquoted. But I am suprised he capitulated without a fight . .. isn't failing to address valid points capitulation?

[Japher]

The only reason the monetary system is used is because the world grew to big for the barter system to work. I have a funny feeling that the barter system is more in your world view but I could be wrong.

I think the real question is what I semi-seriously posed before which is whether the economic system is a zero-sum game (for every winner there is a loser) or if there is growth (the economic pie grows over time).

So it is not zero sum and grows in response to an increase population and counter to competition? So value is determined by availibility and price by desirability?

[Moral Hazard]

Who cares? Work is not maximized in a capitalist system. Only money is.

So in your little world, you measure everything by number of total hours it took to produce something? The efficient allocation of capital (accumulated labor) causes the greatest number or quality of goods and services to be produced at a given amount of labor. Quality and quantity of goods and services is measured in dollars. That is how I would define value not in hours it took to produce.

[Flip McWho]

So it is not zero sum and grows in response to an increase population and counter to competition? So value is determined by availibility and price by desirability?

Gonna go out on a limb and say yeah sure why not. I agree with the increased population part but I'm not sure what you mean by counter to competition. I also feel that availibility would also affect price as well.

Really-- well I work more and harder because that earns me more money. In a communist system I would sit on my a$$ with the rest and wait for my share. A LOT of people would feel the same.

Thats true IMO. Thats why I feel the communist economic system would not work. People have no reward for inventing new things or working harder. Basically there is no incentive to set yourself apart from the crowd. Communist economics could only work in a stagnate society. Hmmm Possibly that is what the end of history means. Isn't the communist paradise supposed to come about when history ends?

[Flubber]

Originally posted by Moral Hazard

Who cares? Work is not maximized in a capitalist system. Only money is.

So in your little world, you measure everything by number of total hours it took to produce something?

Are you new at this?? vel and I went at him for 2 threads on this point . Kid started by claiming that everyone that did "real work" should get the same wage but then waffled a bit. Thats around when he began ignoring me I think

[Japher]

Gonna go out on a limb and say yeah sure why not. I agree with the increased population part but I'm not sure what you mean by counter to competition. I also feel that availibility would also affect price as well.

Yeah, I don't know, just talkin' out my arse. Since population increase as well as competition would both effect price... population creates competition, but not in a linear or predicatable fashion, which is what I mean by counter.

Price is set by desirability and availability, not just by worth.