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Can a Dollar Be Worth Less Than a Dollar?

SolonKR
Posts: 4,042
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2/19/2016 7:22:32 AM
Posted: 9 months ago
So, I was trying to formulate a moral code based purely on logic, and the example I had presented for the idea that the self-sacrificial actions that love creates have different cost-benefit ratios was that a rich man giving $1000 to a poor man creates a much greater benefit to the poor person than the cost to the rich man, while a poor man giving the same could potentially have higher cost than benefit (if he was worse off than the man he gave it to), and it made me realize that I was essentially saying that the utility of money itself is not constant.

To support this, I thought about the law of diminishing marginal utility. Assuming perfectly rational choice, the first purchases of an individual will always be those with the greatest utility--food, shelter, utilities, etc. Yet, as one acquires more wealth, as not everything can possibly be as useful as basic needs, the marginal utility per dollar of choices with later dollars decreases. There are exceptions, of course--someone who dreams of going to space will get a lot out of a space flight, and while the MU/$ won't be the same as that of the basic needs, it can still be higher than things of a lower price--but it seems to generally hold true.

In retrospect, it seems like an obvious thing, but also still strange. Am I just talking out of my butt, or...?
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PetersSmith
Posts: 5,855
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2/19/2016 5:13:42 PM
Posted: 9 months ago
At 2/19/2016 7:22:32 AM, SolonKR wrote:
So, I was trying to formulate a moral code based purely on logic, and the example I had presented for the idea that the self-sacrificial actions that love creates have different cost-benefit ratios was that a rich man giving $1000 to a poor man creates a much greater benefit to the poor person than the cost to the rich man, while a poor man giving the same could potentially have higher cost than benefit (if he was worse off than the man he gave it to), and it made me realize that I was essentially saying that the utility of money itself is not constant.

To support this, I thought about the law of diminishing marginal utility. Assuming perfectly rational choice, the first purchases of an individual will always be those with the greatest utility--food, shelter, utilities, etc. Yet, as one acquires more wealth, as not everything can possibly be as useful as basic needs, the marginal utility per dollar of choices with later dollars decreases. There are exceptions, of course--someone who dreams of going to space will get a lot out of a space flight, and while the MU/$ won't be the same as that of the basic needs, it can still be higher than things of a lower price--but it seems to generally hold true.

In retrospect, it seems like an obvious thing, but also still strange. Am I just talking out of my butt, or...?

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famousdebater
Posts: 3,943
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2/19/2016 8:38:13 PM
Posted: 9 months ago
At 2/19/2016 7:22:32 AM, SolonKR wrote:

Yes and no. In their head and to them personally it is more significant than it would be to a person with a lot of money. They would most likely value it more and use it more wisely than a richer person would. Meaning that to them it would be more valuable to them.

However, physically the answer is no. The dollar that a rich person has and the dollar that a poor person has or the dollar that anybody has is always going to be of the same value (provided that they are all using US dollars and are all living in the present and in the same area). If a poor person goes to the shop with a dollar no matter how much they value that dollar at personally it isn't going to get them anymore than it would have gotten them if they were rich.

So the answer is indefinite. Mentally - yes. Physically - no.
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j50wells
Posts: 345
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2/19/2016 9:31:02 PM
Posted: 9 months ago
Faulty logic. The dollar represents nothing. Let me say that again...nothing. It is paper, or a means of exchange. You've heard this before but since people are hard of hearing, let me re-inform you. A dollar is a lot easier to exchange than a heard of sheep.
So the dollar represents my labor. It's what I earned. I exchanged my chord of wood for paper, because it's easier to pack a piece of paper in my pocket than to drive a load of wood around in the back of my pick up. The key word in this whole idea is the word "my", as in "my" money, "my" wood that I spent ten hours cutting in the hot sun, "my" labor, and that no one should take from anyone else's labor lest we have slavery.
Because the dollar is "my" dollar gleamed by my time, blood, sweat, toil, and tears, then I can spend it any damn way that I want to. So this religious, socialistic guilt trip that you give to people who work harder than others, and thus have nicer and better stuff, is bogus. If you like crappy clothes, tasteless food, and living in trailer parks because you don't want to work more than 30 hours a week, well, that's your choice. I chose to work hard and have nice stuff. I've worked 70 hours a week all of my life. If you can't compete then live with it.