Why has Capitalism failed to produce optimal value everywhere?

[Last Conformist]

Originally posted by Kidicious


To get more of it. Value is good. I believe I said that, and then you started telling me that you don't accept my idea of value. It's not my idea. Give the credit to Adam Smith maybe, or probably someone who came before him. There is only one 'value' that is appropriate to the context of our discussion.

I believe Marx is usually credited with the labour theory of value. You say this kind of value is the same as that the capitalists speak of - I'm entirely failing to see how that is the case. The fact that capitalists tend to reject the labour theory of value suggests they do not think it is the same.

That we can get more of anything isn't a reason to, if you'll excuse the pun, value it. We can increase the product of the budget deficit and the number of codfish in the North Sea, but that doesn't mean it's a meaningful number.

Value is good? Why? If I have two stone chisels, the one made by a human stoneworker - and thus, according to the labour theory of value, has had value infused into it - and the other formed by freak accident, there is no certainty that the former is better. What I, as the user of the chisels, value is purely its utility to me. Looking at my metaphical chisels, I'm feeling strongly tempted to say that value is a function of how desireable an object is to me; the essence of the capitalist notion.

[Kidlicious]

Originally posted by Flubber



Then join us on the capitalist side. Capitalism creates more value, more often than any other system.

Bah.

[Kidlicious]

Originally posted by Last Conformist
I believe Marx is usually credited with the labour theory of value.

Marx developed the Marxist labor theory of value of course. He used the Classical labor theory of value, and referred to the same value that the Classical economists did.

You say this kind of value is the same as that the capitalists speak of - I'm entirely failing to see how that is the case. The fact that capitalists tend to reject the labour theory of value suggests they do not think it is the same.

Neo-classical economists reject the labor theory of value for the fact that Marx brought it to it's logical conclussion. They, however, did not come up with any new type of value. They merely argued, very poorly I might add, that labor is only half of value. In so doing Alfred Marshall developed what is called consumer surplus which he basically robbed from Marx's theory, while at the same time rejecting Marx's theory. Complete crap!

That we can get more of anything isn't a reason to, if you'll excuse the pun, value it. We can increase the product of the budget deficit and the number of codfish in the North Sea, but that doesn't mean it's a meaningful number.

Value is good? Why? If I have two stone chisels, the one made by a human stoneworker - and thus, according to the labour theory of value, has had value infused into it - and the other formed by freak accident, there is no certainty that the former is better. What I, as the user of the chisels, value is purely its utility to me. Looking at my metaphical chisels, I'm feeling strongly tempted to say that value is a function of how desireable an object is to me; the essence of the capitalist notion.

I'm not going down this road. It's absurd.

[Flubber]

Value

Like any other term, it has many possible definitions. I value the love of my parents but would never put a price on it . .


But its clear we want to talk about the value of products, items etc that can be purchased for money.

You can get into all sorts of arguments about such things as whether a useless (other than decoration) gemstone is really "worth" a thousand bucks or whether the value of a pound of carrots is really only a few cents. The price of some items makes no sense to me BUT monetary worth as indicated by price is the best indicator we have of the value of a thing.


Now for labor . .. I don't see why it should be treated any differently. The "value" of an hour of labour is no harder and no easier to ascertain than many "things" and I believe that a labourer should be compensated regardless of whether or not their efforts added value to something else

[Kidlicious]

Originally posted by Flubber
Value

Like any other term, it has many possible definitions. I value the love of my parents but would never put a price on it . .

Different context

[Last Conformist]

Originally posted by Kidicious
Neo-classical economists reject the labor theory of value for the fact that Marx brought it to it's logical conclussion. They, however, did not come up with any new type of value. They merely argued, very poorly I might add, that labor is only half of value. In so doing Alfred Marshall developed what is called consumer surplus which he basically robbed from Marx's theory, while at the same time rejecting Marx's theory.

So it may be - I'm not into the history of economic science. What I'm refering to as the "capitalist notion" is that, expressed repeatedly by rightwingers on this board, that the value of an item is the aggregate of the private evaluations of all people across society.

I'm not going down this road. It's absurd.

Care to explain why it is absurd?

[Kidlicious]

Originally posted by Last Conformist

So it may be - I'm not into the history of economic science. What I'm refering to as the "capitalist notion" is that, expressed repeatedly by rightwingers on this board, that the value of an item is the aggregate of the private evaluations of all people across society.

It's not a good statement. You have to believe that they mean that the value of something is the price that you are willing to pay, not the price that you pay. Either they are speaking incorrectly, or they don't have any idea what they are talking about.

Care to explain why it is absurd?

We are talking about goods and services that are produced by humans. Of course land and other things have value, but that's not what we're talking about.

[Flubber]

Even if I accept one of kid's main concepts, that labour creates all "value "( for teh moment and for the purposes of argument), where does this get us?

There can be little doubt that the operational factory has "value"-- perhaps it can be several millions of dollars. If the owner owns this then theoretically he is the rightful owner of many thousands of hours of accumulated labor value. Perhaps he worked 100 hour weeks for 50 years-- maybe he was smart and made good deals. maybe he invented something and became rich. Perhaps he and his ancestors profited from an enslaved populace . . . . The bottom line is you don't know.


But to call all this accumulated value a new term "capital" and to say it is therefore unworthy of compensation seems absurd to me. Use your own theory and assess the factory as what it is, the product of thousands and thousands of hours of labour. If you can appropriate this without compensation, you would equally feel free to fail to pay the "workers" for their labour.

[Flubber]

Originally posted by Kidicious


Different context

My point exactly.


Besides, I thought you liked to interchange contexts. You do it all the time with the term "exploitation"

[Drogue]

Re: Re: Re: Why has Capitalism failed to produce optimal value everywhere?

Originally posted by Kidicious
You have a degree in econ, right?

Am doing, yes. I'm only 20.

Originally posted by Kidicious
So you know what consumer surplus is, right? So tell us, what does a consumer get a surplus of?

The consumer gets more value than he is willing to pay. For example, if one consumer is willing to pay $10, another $8 and another $6, and the company wants to sell to all 3, he must sell at $6. Thus the one who is willing to pay $10 gets it for $6, and has $4 consumer surplus. Similarly the $8 consumer gets $2 consumer surplus. This is exra money they have that they would be willing to part with for that good.

Hence why I said "marginal" consumer, specifically.

[Last Conformist]

Originally posted by Kidicious

It's not a good statement. You have to believe that they mean that the value of something is the price that you are willing to pay, not the price that you pay. Either they are speaking incorrectly, or they don't have any idea what they are talking about.

Possibly. I'm still open to anyone from their side that is willing to try and defend their position ...

We are talking about goods and services that are produced by humans. Of course land and other things have value, but that's not what we're talking about.

Why should their be different notions of value for man-made and natural things? It would not seem to make any much difference to me as a consumer whether CDs are made in factories or grow on trees.

[Drogue]

Originally posted by Kidicious
Data that they pick and choose.

Yes, but a good economist has no reason to pick data specifically that goes one way or the other. In order to be well recognised, academically, you want to pick as large a random sample as you can manage. Yes, it's not perfect, but it's not biased, and if you look at the statistical significance involved in a sample of 300,000, you'll see it's a pretty good approximation of the true, full set of data.

[Kidlicious]

Originally posted by Flubber


My point exactly.


Besides, I thought you liked to interchange contexts. You do it all the time with the term "exploitation"

I shouldn't, but what are you talking about?

[Kidlicious]

Re: Re: Re: Re: Why has Capitalism failed to produce optimal value everywhere?

Originally posted by Drogue
The consumer gets more value than he is willing to pay.

See? You obviously mispoke. The value of the good is what the consumer is willing to pay.

For example, if one consumer is willing to pay $10, another $8 and another $6, and the company wants to sell to all 3, he must sell at $6. Thus the one who is willing to pay $10 gets it for $6, and has $4 consumer surplus. Similarly the $8 consumer gets $2 consumer surplus. This is exra money they have that they would be willing to part with for that good.

Hence why I said "marginal" consumer, specifically.

It's not extra money. The consumer doesn't get extra money. They get extra value.

[Drogue]

Originally posted by Kidicious
Neo-classical economists reject the labor theory of value for the fact that Marx brought it to it's logical conclussion. They, however, did not come up with any new type of value.

Yes they did. Value is the price someone is willing to pay for something. If I have a pen, and I would need to be give £5 to part with it, it has a value of £5. You can't objectively put a price on something, as it is, as with all human things, inherantly subjective, but it does have a value to each person, so the value of something is the value that the person with the highest value puts on it. It is that person that then owns it. That is perfect competition. Sadly it's impossible/nearly impossible in practice.

Originally posted by Flubber
You can get into all sorts of arguments about such things as whether a useless (other than decoration) gemstone is really "worth" a thousand bucks or whether the value of a pound of carrots is really only a few cents. The price of some items makes no sense to me BUT monetary worth as indicated by price is the best indicator we have of the value of a thing.

Now for labor . .. I don't see why it should be treated any differently. The "value" of an hour of labour is no harder and no easier to ascertain than many "things" and I believe that a labourer should be compensated regardless of whether or not their efforts added value to something else