Why has Capitalism failed to produce optimal value everywhere?

[Drogue]

Originally posted by Japher
If it weren't for "willingness" to create or add to the "value" we wouldn't need ppl in marketing.

We don't need people in marketing. Firms just want them there.

[Ned]

We discussed this briefly in another thread. But land has different value's depending on the use to which it is put. We had discussed prime harbor land and the value it would have to build harbor facilities or for farming. They would be vastly different. The price should reflect these varying utilities, but, as we all know, the price of the land is usually the highest price, which reflects the highest value utility.

While bread is usually sold for one price to all, it may have more value to those suffering a long siege than to a glutton who has just left his favorite restaurant.

I think this thought concerning land can be generalized to everything.

[Kidlicious]

Originally posted by Last Conformist

Someone please translate the above to a variety of English this poor furriner can understand.

What value, if any, do you see in incoherent theories?

[Kidlicious]

Originally posted by Last Conformist

You've said this approximately 235323222358873 times already. What you haven't addressed is why we should care.

I don't care to address that. It doesn't concern me. I just assumed that you cared, or you wouldn't be participating in the thread.

[Kidlicious]

Originally posted by Ned
We discussed this briefly in another thread. But land has different value's depending on the use to which it is put. We had discussed prime harbor land and the value it would have to build harbor facilities or for farming. They would be vastly different. The price should reflect these varying utilities, but, as we all know, the price of the land is usually the highest price, which reflects the highest value utility.

While bread is usually sold for one price to all, it may have more value to those suffering a long siege than to a glutton who has just left his favorite restaurant.

I think this thought concerning land can be generalized to everything.

The value of land is speculative value though. Land doesn't provide more utility than food.

[Kidlicious]

Originally posted by Drogue
Value is a subjective thing, are you talking about the full value to the consumer or the full value to the company? The company would value it at what it can sell it for, ie. marginal revenue. The consumer at their willingness-to-pay. I think what I mean by willingness-to-pay is what you mean by utility, as given the presumption of a rational consumer, maximising utility, revealed preference would show that they'd choose the set of goods that had the highest value, which would be the ones with the greatest consumer surplus. Thus price+consumer surplus = value = willingness to pay, and could also = utility, if you wanted it to.

Willingness to pay is dependent on income, so I wouldn't say that it's exactly utility, but generally you get the idea. Utility = value. We seem to agree on that.

So if you consider utility to be value, of course the worker isn't given the full value of what is produced, since that's more than the firm gets, so the firm would be paying the worker more than it received for the product.

I'm not against exchange for exchange value in the market per se, but such a system benefits those with more income, and not those who work. My whole argument is that some benefit from the system more than others, and others work in the system more than others. In a fair system work would be rewarded equally with benefits.

[Kidlicious]

Originally posted by Drogue

No, because of the shutdown condition, there will never be a PS in the long run under PC. In the long run, price cannot rise above minimum AC, otherwise economic profit is made, and thus it's not PC. Because of shutdown it can't fall below AC. Therefore the only points of possible production are 0 and min AC. Neither of which has a producer surplus. Thus there is no producer surplus in the long run under perfect competition. Please read a textbook, or even look at the link I provided, that shows exactly that.

Of course you can have a price that is higher than average costs. That's the very definition of profit. Price = average costs is the shutdown situation. Price is greater than AC is a profit situation.

And I'm not familiar with the information at that website. I got my degree 10 years ago, and that information was not presented to me. Still, the information is incoherent. I can't even begin to tell you how it does not make sense.

Exactly! If you make 0 economic profit, total revenue must equal total cost. That's the definition of PC in the long run. It's simple. In perfect competition in the long run there is no economic profit, no producer surplus, price = marginal cost = average cost.

If TR = TC there is no profit at all, let alone economic profit. Normal profit is the profit made in a theoretical PC economy. Economic profit is that made by firms with some pricing power.

As I've said 3 times, willingness-to-pay. The amount someone is willing to pay for something is the value of that good to them. That's why I said you strawmaned me, as this is what I've been arguing all along. Value is what it's worth to someone, what they're willing to pay for it, which is a function of utility, but is not exactly equal to it. All the examples I've given have shown this.

Willingness to pay is basically utility, but I would say the difference has to do with diminishing marginal utility.

[Kidlicious]

Originally posted by Drogue
We don't need people in marketing. Firms just want them there.

Actually marketing can reduce AC by creating more sales.

[Last Conformist]

Originally posted by Kidicious
What value, if any, do you see in incoherent theories?

Where did I say anything about the value of incoherent theories? As a rule, they have none. My point was that that a theory is coherent doesn't mean it's useful or valid.

[Last Conformist]

Originally posted by Kidicious


I don't care to address that. It doesn't concern me. I just assumed that you cared, or you wouldn't be participating in the thread.

I'm participitating in the thread to try and make someone of those who care offer an explanation why anyone should care.

[Kidlicious]

Originally posted by Last Conformist

Where did I say anything about the value of incoherent theories? As a rule, they have none. My point was that that a theory is coherent doesn't mean it's useful or valid.

Would you replace a coherent theory with an incoherent theory?

[Kidlicious]

Originally posted by Last Conformist

I'm participitating in the thread to try and make someone of those who care offer an explanation why anyone should care.

I believe in economic justice, do you?

[Kidlicious]

Here's a good website.

economodel

[Last Conformist]

Originally posted by Kidicious


Would you replace a coherent theory with an incoherent theory?

Normally not. But if the coherent theory is wrong, doing so could not possibly worsen anything.

[Last Conformist]

Originally posted by Kidicious


I believe in economic justice, do you?

Probably not in any sense you'd recognize.

I believe that if two competent parties, both fully aware of all relevant circumstances, argree to any deal, that deal cannot possibly be unfair. From your earlier posts, you'd disagree violently with this, so I do not expect to find any common ground here.