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Profit

Reasoning
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10/25/2010 10:14:39 AM
Posted: 6 years ago
If labor is the source of normal exchange-value for reproducible goods, from whence do profits derive?

I'm interested in DDO's answer.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
LaissezFaire
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10/25/2010 10:25:22 AM
Posted: 6 years ago
Profits derive from voluntary exchanges, and exists on both sides of all voluntary exchanges.

If we barter, then as long as the trade is voluntary, we both believe that the thing the other person has is more valuable than the thing we each had. So, we both gain value.

If you buy something from me, I get money and you get stuff, which is normally how people think of profit. But money isn't wealth--we don't really want it, we just want the things we can get for it. So, if I sell you a pair of shoes for $5, I think that the value of what I could buy for $5 is greater than the value of the shoes. And you think that the value of the shoes is greater than the value you'd get from whatever else you could buy with that $5. So, again, we both profit.

Interest is another form of profit. If I loan you money at 5% interest, then I do get more money back than I started with, which is one way of thinking of profit. But we both profit in this exchange too. We aren't really exchanging money for money--I am giving up the value of what I could buy with that money now, for the value of what I could buy with 5% more money later. And you are doing the reverse. Obviously, we each think that the value we are getting is greater than than the value we gave up. So, again, we both profit.
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: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
Cerebral_Narcissist
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10/25/2010 10:26:16 AM
Posted: 6 years ago
At 10/25/2010 10:14:39 AM, Reasoning wrote:
If labor is the source of normal exchange-value for reproducible goods, from whence do profits derive?

I'm interested in DDO's answer.

Unless I am not understanding the question, price of a product is greater than the sum of its parts. The value of labour is less than it's result...
I am voting for Innomen because of his intelligence, common sense, humility and the fact that Juggle appears to listen to him. Any other Presidential style would have a large sub-section of the site up in arms. If I was President I would destroy the site though elitism, others would let it run riot. Innomen represents a middle way that works, neither draconian nor anarchic and that is the only way things can work. Plus he does it all without ego trips.
Reasoning
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10/25/2010 10:34:15 AM
Posted: 6 years ago
At 10/25/2010 10:26:16 AM, Cerebral_Narcissist wrote:
At 10/25/2010 10:14:39 AM, Reasoning wrote:
If labor is the source of normal exchange-value for reproducible goods, from whence do profits derive?

I'm interested in DDO's answer.

Unless I am not understanding the question, price of a product is greater than the sum of its parts. The value of labour is less than it's result...

"The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not as the greater or less compensation which is paid for that labour." - David Ricardo

Do you deny this?
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
Caramel
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10/25/2010 10:40:26 AM
Posted: 6 years ago
At 10/25/2010 10:14:39 AM, Reasoning wrote:
If labor is the source of normal exchange-value for reproducible goods, from whence do profits derive?

When that labor is de-valued, the excess value is shaved off and pocketed by those who own the means of production. If Burger King paid their workers what their labor was worth, there would be no profit for them to collect.
no comment
Reasoning
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10/25/2010 10:40:33 AM
Posted: 6 years ago
At 10/25/2010 10:25:22 AM, LaissezFaire wrote:
Profits derive from voluntary exchanges, and exists on both sides of all voluntary exchanges.

In rare circumstances, perhaps, but surely in the normal conditions of a free market, no one could profit. If he did, others would enter into his field of production and wages would consume profit.

Interest is another form of profit.

I've never heard an Austrian claim interest to be profit before.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
LaissezFaire
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10/25/2010 10:43:59 AM
Posted: 6 years ago
At 10/25/2010 10:40:33 AM, Reasoning wrote:
At 10/25/2010 10:25:22 AM, LaissezFaire wrote:
Profits derive from voluntary exchanges, and exists on both sides of all voluntary exchanges.

In rare circumstances, perhaps, but surely in the normal conditions of a free market, no one could profit. If he did, others would enter into his field of production and wages would consume profit.
In the normal conditions of the free market, everyone MUST profit for there to be any exchange at all. If people didn't gain value from exchanges, the exchanges wouldn't happen.

Interest is another form of profit.

I've never heard an Austrian claim interest to be profit before.
It is profit in the sense that with the exchange, both the creditor and the debtor gain value.
Should we subsidize education?
http://www.debate.org...

http://mises.org...

http://lewrockwell.com...

http://antiwar.com...

: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
Reasoning
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10/25/2010 10:44:41 AM
Posted: 6 years ago
At 10/25/2010 10:40:26 AM, Caramel wrote:
At 10/25/2010 10:14:39 AM, Reasoning wrote:
If labor is the source of normal exchange-value for reproducible goods, from whence do profits derive?

When that labor is de-valued, the excess value is shaved off and pocketed by those who own the means of production. If Burger King paid their workers what their labor was worth, there would be no profit for them to collect.

Since when were you an expert in Classical Economics? I'm impressed.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
LaissezFaire
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10/25/2010 10:47:34 AM
Posted: 6 years ago
At 10/25/2010 10:34:15 AM, Reasoning wrote:
At 10/25/2010 10:26:16 AM, Cerebral_Narcissist wrote:
At 10/25/2010 10:14:39 AM, Reasoning wrote:
If labor is the source of normal exchange-value for reproducible goods, from whence do profits derive?

I'm interested in DDO's answer.

Unless I am not understanding the question, price of a product is greater than the sum of its parts. The value of labour is less than it's result...

"The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not as the greater or less compensation which is paid for that labour." - David Ricardo

Do you deny this?

I do. The value of any commodity is the subjective value that any individual places on it. The price of any commodity in terms of any other commodity is determined by the relative subjective values aggregated (supply and demand curves). The cost of labor does not determine the cost of goods--the price of both in terms of either are determined by their relative subjective values.
Should we subsidize education?
http://www.debate.org...

http://mises.org...

http://lewrockwell.com...

http://antiwar.com...

: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
LaissezFaire
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10/25/2010 10:50:18 AM
Posted: 6 years ago
At 10/25/2010 10:47:34 AM, LaissezFaire wrote:
At 10/25/2010 10:34:15 AM, Reasoning wrote:
At 10/25/2010 10:26:16 AM, Cerebral_Narcissist wrote:
At 10/25/2010 10:14:39 AM, Reasoning wrote:
If labor is the source of normal exchange-value for reproducible goods, from whence do profits derive?

I'm interested in DDO's answer.

Unless I am not understanding the question, price of a product is greater than the sum of its parts. The value of labour is less than it's result...

"The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not as the greater or less compensation which is paid for that labour." - David Ricardo

Do you deny this?

I do. The value of any commodity is the subjective value that any individual places on it. The price of any commodity in terms of any other commodity is determined by the relative subjective values aggregated (supply and demand curves). The cost of labor does not determine the cost of goods--the price of both in terms of either are determined by their relative subjective values.

To clarify, aggregated as in the relative subjective values of a bunch of different people.
Should we subsidize education?
http://www.debate.org...

http://mises.org...

http://lewrockwell.com...

http://antiwar.com...

: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
Reasoning
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10/25/2010 11:21:28 AM
Posted: 6 years ago
At 10/25/2010 10:47:34 AM, LaissezFaire wrote:
I do. The value of any commodity is the subjective value that any individual places on it.

The exchange value of a commodity is an objective fact. I go to the grocery store and I can buy a box of blueberries for $X.

The price of any commodity in terms of any other commodity is determined by the relative subjective values aggregated (supply and demand curves). The cost of labor does not determine the cost of goods--the price of both in terms of either are determined by their relative subjective values.

We know this to be incorrect.

"It is the cost of production which must ultimately regulate the price of commodities, and not, as has been so often said, the proportion between the supply and demand: the proportion between the supply and demand may, indeed, for a time, affect the market value of a commodity, until it is supplied in a greater or less abundance, according as the demand may have increased or diminished; but this effect will be only of temporary duration." - David Ricardo
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
djsherin
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10/25/2010 11:27:59 AM
Posted: 6 years ago
At 10/25/2010 10:34:15 AM, Reasoning wrote:
At 10/25/2010 10:26:16 AM, Cerebral_Narcissist wrote:
At 10/25/2010 10:14:39 AM, Reasoning wrote:
If labor is the source of normal exchange-value for reproducible goods, from whence do profits derive?

I'm interested in DDO's answer.

Unless I am not understanding the question, price of a product is greater than the sum of its parts. The value of labour is less than it's result...

"The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not as the greater or less compensation which is paid for that labour." - David Ricardo

Do you deny this?

I deny this. Value is subjective.
Ragnar_Rahl
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10/25/2010 11:30:59 AM
Posted: 6 years ago
If labor is the source of normal exchange-value for reproducible goods, from whence do profits derive?
Presumably if that odd phrase, then from entrepreneurial labors.
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
djsherin
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10/25/2010 11:33:09 AM
Posted: 6 years ago
At 10/25/2010 10:40:33 AM, Reasoning wrote:
At 10/25/2010 10:25:22 AM, LaissezFaire wrote:
Profits derive from voluntary exchanges, and exists on both sides of all voluntary exchanges.

In rare circumstances, perhaps, but surely in the normal conditions of a free market, no one could profit. If he did, others would enter into his field of production and wages would consume profit.

Interest is another form of profit.

I've never heard an Austrian claim interest to be profit before.

Monetary profits going to zero is only a condition of the long term. Real world conditions change much too often for the long term to ever be reached, though it's theoretically possible to get there.

I think LF is simply talking about profit in the sense that both parties are better off; pyschological profit if you will. I charge 5% interest because the principal plus interest is worth more to me in the future than the the principal is worth to me now. Thus I profit.
djsherin
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10/25/2010 11:37:34 AM
Posted: 6 years ago
At 10/25/2010 11:21:28 AM, Reasoning wrote:
At 10/25/2010 10:47:34 AM, LaissezFaire wrote:
I do. The value of any commodity is the subjective value that any individual places on it.

The exchange value of a commodity is an objective fact. I go to the grocery store and I can buy a box of blueberries for $X.

The price of any commodity in terms of any other commodity is determined by the relative subjective values aggregated (supply and demand curves). The cost of labor does not determine the cost of goods--the price of both in terms of either are determined by their relative subjective values.

We know this to be incorrect.

"It is the cost of production which must ultimately regulate the price of commodities, and not, as has been so often said, the proportion between the supply and demand: the proportion between the supply and demand may, indeed, for a time, affect the market value of a commodity, until it is supplied in a greater or less abundance, according as the demand may have increased or diminished; but this effect will be only of temporary duration." - David Ricardo

Ricardo is not representative of all classical economists, nor is the fact that he said this proof that prices are determined by cost of production.
Reasoning
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10/25/2010 11:38:50 AM
Posted: 6 years ago
At 10/25/2010 11:33:09 AM, djsherin wrote:
At 10/25/2010 10:40:33 AM, Reasoning wrote:
At 10/25/2010 10:25:22 AM, LaissezFaire wrote:
Profits derive from voluntary exchanges, and exists on both sides of all voluntary exchanges.

In rare circumstances, perhaps, but surely in the normal conditions of a free market, no one could profit. If he did, others would enter into his field of production and wages would consume profit.

Interest is another form of profit.

I've never heard an Austrian claim interest to be profit before.

Monetary profits going to zero is only a condition of the long term. Real world conditions change much too often for the long term to ever be reached, though it's theoretically possible to get there.

Marx agrees with you.

"The value of commodities determined by labour time is only their average value....

The market value of commodities is always different from this average value and always stands either below or above it.

The market value equates itself to the real value by means of its continual fluctuations, not by an equation with real value as some third thing, but precisely through continued inequality to itself....

Price, therefore, differs from value, not only as the nominal differs from the real; not only by its denomination in gold and silver; but also in that the latter appears as the law of the movements to which the former is subject. But they are always distinct and never coincide, or only quite fortuitously and exceptionally. The price of commodities always stands above or below their value, and the value of commodities itself exists only in the UPS AND DOWNS of commodity prices. Demand and supply continually determine the prices of commodities; they never coincide or do so only accidentally; but the costs of production determine for their part the fluctuations of demand and supply." - Karl Marx

I think LF is simply talking about profit in the sense that both parties are better off; pyschological profit if you will. I charge 5% interest because the principal plus interest is worth more to me in the future than the the principal is worth to me now. Thus I profit.

We aren't speaking of any form of psychological profit.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
LaissezFaire
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10/25/2010 11:40:23 AM
Posted: 6 years ago
At 10/25/2010 11:21:28 AM, Reasoning wrote:
At 10/25/2010 10:47:34 AM, LaissezFaire wrote:
I do. The value of any commodity is the subjective value that any individual places on it.

The exchange value of a commodity is an objective fact. I go to the grocery store and I can buy a box of blueberries for $X.
That's the price, not the value. For you, the value of those blueberries is higher than $X. Otherwise, you wouldn't buy them.

The price of any commodity in terms of any other commodity is determined by the relative subjective values aggregated (supply and demand curves). The cost of labor does not determine the cost of goods--the price of both in terms of either are determined by their relative subjective values.

We know this to be incorrect.

"It is the cost of production which must ultimately regulate the price of commodities, and not, as has been so often said, the proportion between the supply and demand: the proportion between the supply and demand may, indeed, for a time, affect the market value of a commodity, until it is supplied in a greater or less abundance, according as the demand may have increased or diminished; but this effect will be only of temporary duration." - David Ricardo

And what is the cost of production? The price that employers are willing to pay employees (wages). And what determines the price that employers are willing to give up? The price of the products that the labor produces. The value that the employer gains from selling these products must be higher than the value he lost by paying wages, or he wouldn't have hired anyone. And if you claim that this price (the price of commodities) is determined by labor, then you're right back where we started--what determines the price of labor then? And you continue going in a circle. The correct way to think about prices is in terms of the relative subjective values of all consumer goods--including leisure as a consumer good.
Should we subsidize education?
http://www.debate.org...

http://mises.org...

http://lewrockwell.com...

http://antiwar.com...

: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
Reasoning
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10/25/2010 11:44:52 AM
Posted: 6 years ago
At 10/25/2010 11:40:23 AM, LaissezFaire wrote:
At 10/25/2010 11:21:28 AM, Reasoning wrote:
At 10/25/2010 10:47:34 AM, LaissezFaire wrote:
I do. The value of any commodity is the subjective value that any individual places on it.

The exchange value of a commodity is an objective fact. I go to the grocery store and I can buy a box of blueberries for $X.
That's the price, not the value. For you, the value of those blueberries is higher than $X. Otherwise, you wouldn't buy them.

Your correct in that I clumsily conflated exchange-value with price. The two are not perfectly synonymous.

The price of a commodity always tends towards its exchange value, which is determined by labor. All of which are objective phenomena.

The price of any commodity in terms of any other commodity is determined by the relative subjective values aggregated (supply and demand curves). The cost of labor does not determine the cost of goods--the price of both in terms of either are determined by their relative subjective values.

We know this to be incorrect.

"It is the cost of production which must ultimately regulate the price of commodities, and not, as has been so often said, the proportion between the supply and demand: the proportion between the supply and demand may, indeed, for a time, affect the market value of a commodity, until it is supplied in a greater or less abundance, according as the demand may have increased or diminished; but this effect will be only of temporary duration." - David Ricardo

And what is the cost of production? The price that employers are willing to pay employees (wages).

No, because "The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not as the greater or less compensation which is paid for that labour."
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
LaissezFaire
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10/25/2010 11:45:15 AM
Posted: 6 years ago
At 10/25/2010 11:38:50 AM, Reasoning wrote:
We aren't speaking of any form of psychological profit.
Then you aren't saying anything meaningful. Why think in terms of monetary profit? If I sell something to you, I get money and you get stuff. I certainly gained money--but you gained stuff. If I save that money rather than buy other stuff with it, then I will have "profited" monetarily, and you will have "profited" in terms of consumption of goods. Why arbitrarily pick one of those, and call it the sole determinate of what profit is?

The only meaningful way of thinking of profit is in terms of value. I don't want money--I want the value I can get from the things that money buys. So, if through an exchange, I have gained value, then I have profited from that exchange.
Should we subsidize education?
http://www.debate.org...

http://mises.org...

http://lewrockwell.com...

http://antiwar.com...

: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
Reasoning
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10/25/2010 11:46:54 AM
Posted: 6 years ago
At 10/25/2010 11:37:34 AM, djsherin wrote:
Ricardo is not representative of all classical economists, nor is the fact that he said this proof that prices are determined by cost of production.

Ricardo is the premiere classical economist. When you think classical economist, you think Ricardo.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
djsherin
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10/25/2010 11:49:04 AM
Posted: 6 years ago
At 10/25/2010 11:38:50 AM, Reasoning wrote:
At 10/25/2010 11:33:09 AM, djsherin wrote:
At 10/25/2010 10:40:33 AM, Reasoning wrote:
At 10/25/2010 10:25:22 AM, LaissezFaire wrote:
Profits derive from voluntary exchanges, and exists on both sides of all voluntary exchanges.

In rare circumstances, perhaps, but surely in the normal conditions of a free market, no one could profit. If he did, others would enter into his field of production and wages would consume profit.

Interest is another form of profit.

I've never heard an Austrian claim interest to be profit before.

Monetary profits going to zero is only a condition of the long term. Real world conditions change much too often for the long term to ever be reached, though it's theoretically possible to get there.

Marx agrees with you.

"The value of commodities determined by labour time is only their average value....

The market value of commodities is always different from this average value and always stands either below or above it.

The market value equates itself to the real value by means of its continual fluctuations, not by an equation with real value as some third thing, but precisely through continued inequality to itself....

Price, therefore, differs from value, not only as the nominal differs from the real; not only by its denomination in gold and silver; but also in that the latter appears as the law of the movements to which the former is subject. But they are always distinct and never coincide, or only quite fortuitously and exceptionally. The price of commodities always stands above or below their value, and the value of commodities itself exists only in the UPS AND DOWNS of commodity prices. Demand and supply continually determine the prices of commodities; they never coincide or do so only accidentally; but the costs of production determine for their part the fluctuations of demand and supply." - Karl Marx

I think LF is simply talking about profit in the sense that both parties are better off; pyschological profit if you will. I charge 5% interest because the principal plus interest is worth more to me in the future than the the principal is worth to me now. Thus I profit.

We aren't speaking of any form of psychological profit.

So do lots of other economists. Marx isn't saying the same thing I am though. Commodities don't have inherent value. They can only be valued subjectively by individuals.
djsherin
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10/25/2010 11:52:07 AM
Posted: 6 years ago
At 10/25/2010 11:46:54 AM, Reasoning wrote:
At 10/25/2010 11:37:34 AM, djsherin wrote:
Ricardo is not representative of all classical economists, nor is the fact that he said this proof that prices are determined by cost of production.

Ricardo is the premiere classical economist. When you think classical economist, you think Ricardo.

I don't. When I think classical economist I think of many different people. The fact that one believes in the LTV doesn't make it representative of the others views or of classical economics as a whole.
LaissezFaire
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10/25/2010 12:00:54 PM
Posted: 6 years ago
At 10/25/2010 11:44:52 AM, Reasoning wrote:
At 10/25/2010 11:40:23 AM, LaissezFaire wrote:
And what is the cost of production? The price that employers are willing to pay employees (wages).

No, because "The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not as the greater or less compensation which is paid for that labour."

And so what is the value of a huge bag of horse sh­it? Surely, filling up and transporting that bag would take considerable amounts of labor. But obviously the literal quantity of labor can't be the determinate--because then, things such as horse s­hit and digging and refilling holes in the ground would have higher prices.

So, how then, are prices determined? As I said several times before--by the relative subjective values of each commodity. In a barter economy, this would be clear. Two horses would trade for 15 fish. 20 eggs would trade for a pound of ham. Not because of the labor cost of producing these things--no one would trade anything to get someone to dig and refill a hole in the ground, because no one wants that done, no one places any value on that service. In a market economy, the determination of prices is the same--it's just less obvious. Money simply acts as a common denominator for trade. 15 fish sell for $5, and 2 horses also sell for $5.
Should we subsidize education?
http://www.debate.org...

http://mises.org...

http://lewrockwell.com...

http://antiwar.com...

: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
Caramel
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10/25/2010 1:04:36 PM
Posted: 6 years ago
At 10/25/2010 12:17:29 PM, feverish wrote:
At 10/25/2010 12:00:54 PM, LaissezFaire wrote:
15 fish sell for $5, and 2 horses also sell for $5.

Wow, that's some cheap horse.

Whether or not LaissezFaire like cheap whores or not is immaterial to this discussion. Please stay on track.
no comment
innomen
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10/25/2010 1:26:55 PM
Posted: 6 years ago
"The correct way to think about prices is in terms of the relative subjective values of all consumer goods--including leisure as a consumer good."

Oh if it were only that simple.

Gross profit - difference between cost of product and sell of product.

Net profit - difference between cost of product and sell of product minus all business costs incurred in the sale of the product.

Price - is a strategy dependent on many variables.
LaissezFaire
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10/25/2010 2:09:46 PM
Posted: 6 years ago
At 10/25/2010 1:26:55 PM, innomen wrote:
"The correct way to think about prices is in terms of the relative subjective values of all consumer goods--including leisure as a consumer good."

Oh if it were only that simple.

Gross profit - difference between cost of product and sell of product.

Net profit - difference between cost of product and sell of product minus all business costs incurred in the sale of the product.
If by profit you mean monetary profit, yes. But that description of profit isn't particularly meaningful. People don't want money for its own sake--they want the value of the goods and services they can get for that money (Even someone who wants money as a status symbol doesn't want it for it's own sake; they want it because they value that status highly). So saying that only one person profits from a voluntary trade is incorrect--both sides gain value from the trade, otherwise the trade wouldn't have occurred.

Price - is a strategy dependent on many variables.
I'm not sure what you mean by price being a strategy, but I never said it doesn't depend on many different variables. The price of any one product is affected by the subjective valuations (i.e. supply and demand curves) of every other product. The price of a product X in terms of dollars is dependent on what else you can get for those dollars.
Should we subsidize education?
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: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
Cerebral_Narcissist
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10/25/2010 2:16:22 PM
Posted: 6 years ago
At 10/25/2010 10:34:15 AM, Reasoning wrote:
At 10/25/2010 10:26:16 AM, Cerebral_Narcissist wrote:
At 10/25/2010 10:14:39 AM, Reasoning wrote:
If labor is the source of normal exchange-value for reproducible goods, from whence do profits derive?

I'm interested in DDO's answer.

Unless I am not understanding the question, price of a product is greater than the sum of its parts. The value of labour is less than it's result...

"The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not as the greater or less compensation which is paid for that labour." - David Ricardo

Do you deny this?

Yes.
I am voting for Innomen because of his intelligence, common sense, humility and the fact that Juggle appears to listen to him. Any other Presidential style would have a large sub-section of the site up in arms. If I was President I would destroy the site though elitism, others would let it run riot. Innomen represents a middle way that works, neither draconian nor anarchic and that is the only way things can work. Plus he does it all without ego trips.
innomen
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10/25/2010 2:33:06 PM
Posted: 6 years ago
At 10/25/2010 2:09:46 PM, LaissezFaire wrote:
At 10/25/2010 1:26:55 PM, innomen wrote:
"The correct way to think about prices is in terms of the relative subjective values of all consumer goods--including leisure as a consumer good."

Oh if it were only that simple.

Gross profit - difference between cost of product and sell of product.

Net profit - difference between cost of product and sell of product minus all business costs incurred in the sale of the product.
If by profit you mean monetary profit, yes. But that description of profit isn't particularly meaningful. People don't want money for its own sake--they want the value of the goods and services they can get for that money (Even someone who wants money as a status symbol doesn't want it for it's own sake; they want it because they value that status highly). So saying that only one person profits from a voluntary trade is incorrect--both sides gain value from the trade, otherwise the trade wouldn't have occurred.
They want the value of the goods and services they can get for that money - That's what money is. "both sides gain value from the trade" - that's what trade is.


Price - is a strategy dependent on many variables.
I'm not sure what you mean by price being a strategy, but I never said it doesn't depend on many different variables. The price of any one product is affected by the subjective valuations (i.e. supply and demand curves) of every other product. The price of a product X in terms of dollars is dependent on what else you can get for those dollars.
No price is hugely dependent on competitive conditions, many many times there is negative profit with price for different reasons, but generally it is dependent on a market strategy.