Defending Capitalism

[BCEmporium]

Say you mowed our neighbour's lawn for the extra 50 bucks you needed and bought the skate, but the day after that some volcano chain started erupting and dipped the world in volcanic winter,  covering all the parks, ramps, sidewalks etc with snow so you can't use your skate in most places you would; now your skate isn't worth all that much for anyone. You mentioned backing by metals, tomorrow someone could find a vein of gold of continental proportions and and the price of the gram would drop so much you would make more money selling a gram of cancerigenous air out of the exhaust from a old poluting combustion engine.

It's pretty hard to find somthing that has an "inherent" value that can't be changed drasticly.

You're adding fatalism to the equation. By that point of view anything can happen on any economic system. However within Capitalism those values may float for no catastrophic events.

You see... people tend to look to the immediate; "I earn X"  / "It costs Y". Pretty often you listen politicians bullshit-loading people with arguments such as "I rather raise the taxes than lower the wages" or vice-versa. Well, that's baloney! Regardless what they do on such it renders the same; you end up with less money available for yourself.
Adding to the Capitalist monetary system and the politicians have yet another way to raise taxes and lower wages without people even notice it: Print more currency and generate inflation. Well... people will notice, when they figure out everything get more expensive and the money they wage is barely enough for a kg of rice or potatoes, but for their immediate view the politician has nothing to do with it, as he didn't either lowered the wages or raised the taxes.

[jpent]

If I may, I'd like to suggest that everyone in this thread take the time to watch this video: http://www.youtube.com/watch?v=h36Dni1ZPX0

It explains the meaning of the terms 'value', 'utility' and 'price' as used by Austrian economics. I think it is very relevant to this thread, and should hopefully get everyone on the same baseline.

[benjamindees]

That video is metaphysical hogwash.  Value is only subjective when it is arbitrarily bound up with separate concepts such as human work and action.  Intrinsic, objective value exists irrespective of humans altogether.  The fact that Austrian (or any other) economics has no connection to physical reality doesn't mean that everything is inherently subjective.

[BitterTea]

Intrinsic, objective value exists irrespective of humans altogether.

Ok. Name two things with intrinsic value, and state their value in relation to each other, intrinsically.

[benjamindees]

Two apple trees have more intrinsic value than one apple tree.

[BCEmporium]

Two apple trees have more intrinsic value than one apple tree.

That relative, if one gives out outstanding apples and the two together bring lesser quality/grade ones, then that single apple tree has more intrinsic value than the other two together.

[benjamindees]

Yeah well obviously I was assuming identical apple trees.

Two ounces of gold have more intrinsic value than one ounce of gold.

A ton of carbon has more intrinsic value than a ton of carbon dioxide.

A ton of hydrogen has more intrinsic value than a ton of iron.

A ton of iron has more intrinsic value than a ton of iron oxide.

[da2ce7]

Yeah well obviously I was assuming identical apple trees.

Two ounces of gold have more intrinsic value than one ounce of gold.

A ton of carbon has more intrinsic value than a ton of carbon dioxide.

A ton of hydrogen has more intrinsic value than a ton of iron.

A ton of iron has more intrinsic value than a ton of iron oxide.

If apple trees were a pest and destroying your solar array, then no.

See, everything in life is relative. Even in physics there is nothing 'intrinsic' (that we know of)... everything has to be measured by it's relationship to something else.

[BCEmporium]

Ultimately, nothing has a "value" other than relative because its value depends on how much we valuate it. This alone makes everything relative. You can't say gold is more valuable than silver, because both just have value "relative to humans" and our purposes, other animals don't eat metals or even know what to do with them.  

If for what ever you produce you need carbon dioxide but not carbon, than carbon is worthless to you and its dioxide is more valuable.
And even on your statement about quantity,

Even for your given example, 1 apple tree has more value than 2 apple trees, but the 2 apple trees by piece would have less value than that apple tree alone. One would be a high valuable unique piece, whereas the other 2 weren't unique.

Also the value is relative to places, 1 liter of water in a rain forest worth nothing, the same liter of water in a desert worth whatever the seller wants to ask for it.

[benjamindees]

If apple trees were a pest and destroying your solar array, then no.

"No" what?  Your assertion has nothing to do with the value of apple trees in relation to one another, but the value of apple trees relative to solar panels.

If for what ever you produce you need carbon dioxide but not carbon, than carbon is worthless to you and its dioxide is more valuable.

It is possible to make carbon dioxide from carbon.  In fact, it is possible to make carbon dioxide from *only* carbon, and to do so profitably.  Regardless, I probably should have said instead that one ton of carbon and oxygen in 1:2 molar ratio has more intrinsic value than one ton of carbon dioxide.

Also the value is relative to places, 1 liter of water in a rain forest worth nothing, the same liter of water in a desert worth whatever the seller wants to ask for it.

Subjective "value" to humans perhaps, but not intrinsic value.

[TiagoTiago]

Yeah well obviously I was assuming identical apple trees.

Two ounces of gold have more intrinsic value than one ounce of gold.

A ton of carbon has more intrinsic value than a ton of carbon dioxide.

A ton of hydrogen has more intrinsic value than a ton of iron.

A ton of iron has more intrinsic value than a ton of iron oxide.

If you get free electricity and free water, but you live on a cruiseship, hydrogen is pretty much free, while you need to pay to get more iron  (you got only a limited amount of it avaiable for extracting from the ship itself).


If you're gonna live in space, i imagine you would value raw matterial that comes with oxygen more.

[jpent]

I think you've both missed the point of the video. The point wasn't to tell people what this 'value' thing they've been taking about was, but rather to give a useful and consistent definition of value which can be used in logical reasoning. The reason I linked to it is because everyone seems to have different definitions of terms which lead to unnecessary arguments.

Value can mean, for example, the physical properties of an object which give it characteristics to be used for a certain purpose. For example, two logs on a fire can provide more heat when burned than one. There is clearly nothing subjective about this definition of value. Austrians economists choose, however, to use the word 'utility' to describe this phenomenon.

Value, as used in the video, essentially refers to how much a person values a particular means of achieving of a particular end. In this case, two logs on a fire may be less valuable than one, because I personally find the resulting temperature to be too high. However, for other uses, such as boiling water, two logs may be preferable.

No matter what definitions we use, we can see that there are two mutually exclusive concepts at play here. So saying 'value can both be subjective and objective' is nonsensical.

The term value is also commonly used as a synonym for price. Of course, people may use whatever definitions of terms they like, but in general it is best when having a debate to have consistent definitions for terms, and have different terms for different meanings.

[benjamindees]

If you get free electricity and free water, but you live on a cruiseship, hydrogen is pretty much free, while you need to pay to get more iron  (you got only a limited amount of it avaiable for extracting from the ship itself).

If I live on a cruise ship and I get free electricity, I can extract iron from seawater for free.  Or, I can fuse my free hydrogen into iron.  I would have an infinite amount.

As to Austrian economists, "utility" is a loaded term that implies usefulness to humans.  So, if you've been brainwashed into believing that "value" has no meaning, fine.  But I prefer to use terms according to their colloquial meanings.

[rezin777]

So, if you've been brainwashed into believing that "value" has no meaning, fine.

I hardly see how you can come to that conclusion from his post.

[jpent]

I prefer to use terms according to their colloquial meanings.

I'm just trying to say that there are many mutually exclusive things that the term 'value' can be used mean, and to use it without stating what definition you are using only leads to confusion - as demonstrated by this thread.

[benjamindees]

I hardly see how you can come to that conclusion from his post.

Sorry if that sounded harsh but it was actually more of a hypothetical than an accusation.

But it does need to be pointed out that Austrians explicitly re-define and shift terms in order to justify the notion that all value exists solely in terms of immediate human preference.

On the other hand, I finally finished that video and he waits until the final two minutes to deliver the punchline:  "It (Mengerian analysis) is not about explaining long run prices... what prices will tend to be after all adjustments take place in the market."

[BCEmporium]

So, if you've been brainwashed into believing that "value" has no meaning, fine.

Calm down! The assortment that "value" has no meaning - at least alone and without stating relatively to who or what - doesn't mean "everything for free" or the "dead of economics". That one is a "base" of rational thinking, you always must START (and not end, this is important) from there to build a rational decision about the value of something.
Equivalent on lawmaking would be the statement that «there's no right or wrong, so everything is allowed, nothing is forbidden». It's a good start place (obviously an obnoxious end point if used as so). 

[BitterTea]

It seems to me that the main difference between "anarcho-capitalism" (non-state capitalism, market anarchism) and "anarcho-socialism" (non-state socialism, anarchism) is that one system allows for the private ownership of capital (means of production) and the other does not. It seems all other differences can be derived from this one. The right to the product of ones labor derives from the idea that ownership of capital occurs by making use of such capital. The immorality of rent and wages derives from the idea that one owns the product of one's labor.

So, if you want to convince me that capitalism is immoral and that one should own the product of one's labor, put forth an argument against the private ownership of capital. Here are some questions to get you started.

How do you define capital?

Do your argument against private ownership of capital also apply to other private ownership? If so, do you also argue against all private ownership, or do you reconcile this somehow?

[jpent]

Austrians explicitly re-define and shift terms in order to justify the notion that all value exists solely in terms of immediate human preference.

This is not the purpose of the Austrian definition of value. The purpose is to provide a definition which is internally consistent, and robust enough to build a theory of economics on. I cannot tell you whether "all value exists solely in terms of immediate human preference" because you still haven't given a consistent definition of the term as you are using it.

[LMGTFY]

It seems to me that the main difference between "anarcho-capitalism" (non-state capitalism, market anarchism) and "anarcho-socialism" (non-state socialism, anarchism) is that one system allows for the private ownership of capital (means of production) and the other does not. It seems all other differences can be derived from this one. The right to the product of ones labor derives from the idea that ownership of capital occurs by making use of such capital. The immorality of rent and wages derives from the idea that one owns the product of one's labor.

That may be correct for some varieties of collectivist anarchists, but I think it's an over-simplification. On the whole, it isn't that "anarcho-socialists" prohibit the private ownership of capital - at least on a small scale - but rather their economic focus is on collective work. I don't regard small-scale capitalism as incompatible with that.

Personally, I think the division into individualist and collectivist varieties of anarchist is an interesting academic exercise, but from a practical standpoint not hugely useful. I'd take anarchism slightly more seriously (I do take it seriously, just not seriously enough to identify as an anarchist myself) if the focus was on political action first, and then, once we're free to make decisions for ourselves, at that point deciding how to run our respective economies. Anarcho-communism, say, seems to me to be like saying "I want you to be free to decide how to run the economy. And the economy will be a communist economy". The same applies, obviously, to anarcho-capitalists. By all means have a preference, but the first step has to be ensuring that everyone is politically free.