Economics ideas: Problems with utility.

[Khayembii Communique]

How is that a better analogy?

Lets try this another way...

I have a cow. I am willing to trade you my cow for two of your sheep, and not one sheep less.

This means that the price of my cow is 2 sheep. This is a quantitative measurement. The value is 2 and the unit is sheep. What does this measurement gauge?

In order to bring two things into comparison there must be some underlying trait with which to compare them. For example, 0 degrees Celsius is equal to 273.15K. But why can we compare these two things? Because they have an underlying common element with which we compare - temperature. They are both measures of temperature. In contrast, one cannot compare 5 meters with 10 pounds because these don't have any underlying common element with which to compare them; one is distance while the other is weight.

So what is the underlying common element that two commodities contain that makes it possible for us to compare them?

 

[Panache]

In order to bring two things into comparison there must be some underlying trait with which to compare them. For example, 0 degrees Celsius is equal to 273.15K. But why can we compare these two things? Because they have an underlying common element with which we compare - temperature. They are both measures of temperature. In contrast, one cannot compare 5 meters with 10 pounds because these don't have any underlying common element with which to compare them; one is distance while the other is weight.

Hmm. So you are saying that in order to compare two things, like say The height of a horse and the length of a hand, they would have to have a common element, in this case distance?

So I could maybe compare the length of my hand to the height of a horse and define the height of a horse in terms of hands? Like, I could say that a certain horse is seventeen hands tall, and that comparison would be a measurament of distance?

Well, what if instead of distance, I wanted to measure how useful a car is to me? Wouldn't I have to compare it to something else that was useful to me?

Like say, money. Money is pretty useful. Maybe I could compare how useful a dollar is to me against how useful a car is to me. Just like we did with the hands and the horse. Then maybe we could define how useful the car is in terms of dollars.

This would be almost like a quantitative measurement of the utility of a car...

Hmm... this is a fairly novel concept I just came up with. I think I may be on to something here. I shall have to look into this further. This could change everything...

So what is the underlying common element that two commodities contain that makes it possible for us to compare them?

That would be utility.

 

[Kushinator]

Hmm. So you are saying that in order to compare two things, like say The height of a horse and the length of a hand, they would have to have a common element, in this case distance?

So I could maybe compare the length of my hand to the height of a horse and define the height of a horse in terms of hands? Like, I could say that a certain horse is seventeen hands tall, and that comparison would be a measurament of distance?

Well, what if instead of distance, I wanted to measure how useful a car is to me? Wouldn't I have to compare it to something else that was useful to me?

Like say, money. Money is pretty useful. Maybe I could compare how useful a dollar is to me against how useful a car is to me. Just like we did with the hands and the horse. Then maybe we could define how useful the car is in terms of dollars.

This would be almost like a quantitative measurement of the utility of a car...

Hmm... this is a fairly novel concept I just came up with. I think I may be on to something here. I shall have to look into this further. This could change everything...



That would be utility.

:2rofll::2rofll::2rofll:

Ive stayed out of this argument mostly due to opinionated degrees of acceptability...

Your example gave me an epiphany. Lets switch gears here to measure the utility of something that is very dear to us all; ***** (or dick, im not here to judge)...

Now some might say thats not a quantitative good, and i'd say you've never been to Amsterdam.

Back to discussion. Other than price, there are other possible ways to measure utility to *****. One might try and be very nice to the gal, or even try to act masculine. If a person has allot of *****, than he/or she might not be to worried about getting more. But if you have no *****, and havent had any for a while, i am willing to bet you would start measuring your desire to be satisfied by how much it would cost you. How much are you going to have to spend taking Wanda out to a nice dinner, and a hotel??? Than, you might start factoring how much time you will spend with her, as opposed to working on your arrowhead collection. Eventually, if you really desire it enough, you are either A.) do whatever you can to get Wanda to like you, and pray to god she doesnt find someone with more utility (in her POV) than you. B.) ditch Wanda, and find you some ***** that can be bought.

The end result of either of those will therefore weaken the utility of *****, or increase it.

None the less, to say you cant measure it with money is entirely wrong. Your asking its value to an individual. Try and measure the utility of ***** using the measurement of love... The key word measurement.

If im starving (really really really starving), and i was a woman (who had no money), and someone man had a pizza, there is no doubt in my mind i would be thinking of trading some ***** for a pizza. If i wasnt really that hungry, i probably wouldnt be thinking that though.

But, if i was a woman, and starving with money, i probably would rather pay money for the same pizza than put out for it. Meaning, my ***** at that time is worth more to me than money... But what if the pizza was 1000 dollars??? And i only had 12.50?

You say measure, than come up with something that can be defined as measurement. If not, than what the fvck are you actually getting at here???

 

[Khayembii Communique]

Hmm. So you are saying that in order to compare two things, like say The height of a horse and the length of a hand, they would have to have a common element, in this case distance?

So I could maybe compare the length of my hand to the height of a horse and define the height of a horse in terms of hands? Like, I could say that a certain horse is seventeen hands tall, and that comparison would be a measurament of distance?

Well, what if instead of distance, I wanted to measure how useful a car is to me? Wouldn't I have to compare it to something else that was useful to me?

Like say, money. Money is pretty useful. Maybe I could compare how useful a dollar is to me against how useful a car is to me. Just like we did with the hands and the horse. Then maybe we could define how useful the car is in terms of dollars.

This would be almost like a quantitative measurement of the utility of a car...

Hmm... this is a fairly novel concept I just came up with. I think I may be on to something here. I shall have to look into this further. This could change everything...

Money itself is a commodity.

You basically could have just said "My one cow is worth two sheep, and I can compare them because the one thing they have in common is that they are each worth 5 horses."

It's a tautology. You've solved nothing.

 

[Feela]

Money itself is a commodity.

You basically could have just said "My one cow is worth two sheep, and I can compare them because the one thing they have in common is that they are each worth 5 horses."

It's a tautology. You've solved nothing.

Ignore him, he cannot seem to grasp the massive flaw in his reasoning.

So your friend wouldn't happen to be Comrade Red?

 

[Khayembii Communique]

So your friend wouldn't happen to be Comrade Red?

That he would.

 

[Feela]

That he would.

What kind of socialist are you?

 

[Khayembii Communique]

What kind of socialist are you?

I'm a Marxist.

 

[Feela]

I'm a Marxist.

What kind of Marxist?

 

[Khayembii Communique]

What kind of Marxist?

That's a dangerous question. The difference between "libertarian" or "left" communism and "Leninism" is an artificial one, and so I don't tend to label myself beyond Marxist. However, I do agree with much of what Lenin said, so most people consider me a "Leninist".

 

[Feela]

That's a dangerous question. The difference between "libertarian" or "left" communism and "Leninism" is an artificial one, and so I don't tend to label myself beyond Marxist. However, I do agree with much of what Lenin said, so most people consider me a "Leninist".

From an anarchism point of view there is a big difference.

 

[Panache]

Money itself is a commodity.

Of course money is a commodity. This is exactly what I have been saying.

You basically could have just said "My one cow is worth two sheep, and I can compare them because the one thing they have in common is that they are each worth 5 horses."

Why yes. I could have. And it still would have been a quantitative measurement of utility. Which is the point I was trying to get across.

Anything that has distance can be used to measure the distance of something else. The distance of one thing can then be quantitatively defined in terms of the other.

Similarly, anything that has utility can be used to measure the utility of something else.

It's a tautology. You've solved nothing

Of course its a tautology. That is the whole point. Do you even know what a tautology is? Its a formula in propositional logic.

Want to hear another tautology?

"Unless Bob and John are both carpenters, then at least one of them is not a carpenter."

Want to hear another one?

"A --> A"

Convnetional wisdom, common sense, and basic logic will tell you that both of these statments are true.

Similarly, conventional wisdom, common sense, and basic logic will tell you that price measures utility.

Now these are a couple of wffs that are so blatently and obviously true that rational people don't even question them.

However, Feela, not falling into such a catagory, went ahead and asked why anyone should think that Bob and John both being carpenters had anything to do with whether or not at least one of them was not a carpenter.

According to Feela's "logic," since you can't prove that Bob and John are both carpenters independently of whether or not at least one of them isn't a carpenter, there is no reason to believe that one of them has anything to do with the other.:roll:

So, yeah, the fact that price measures utility is a tautology, just like the fact that distance measures the space between two objects. Just like the fact that velocity measures how fast something travels. The fact that measurements measure the things that they measure is a tautology.

It boggles the mind that someone would claim there is no reason to believe that a tautology is true, and then have the nerve to question my grasp of logic.

 

[Khayembii Communique]

Why yes. I could have. And it still would have been a quantitative measurement of utility. Which is the point I was trying to get across.

Anything that has distance can be used to measure the distance of something else. The distance of one thing can then be quantitatively defined in terms of the other.

Similarly, anything that has utility can be used to measure the utility of something else.

"Here it is important to remember the link of marginal utility theory to one its forefathers, utilitarianism. For in the new economics the key orienting principle of ‘equilibrium’ is inextricably tied to the notion of the individuals’ ‘utility maximisation’. Everything else is built around these two principles which are never established, but always assumed. They reciprocally and quasi-axiomatically support one another, constituting thereby the real armour of the theory. According to the believers in the ‘subjective revolution’, the irrepressible drive of the – by their ‘human nature’ so determined – individuals for maximising their utilities brings about the happy economic condition of equilibrium; and by the same token, economic equilibrium itself is the required condition under which the maximisation of the utilities of all individuals predestined for the purpose of selfish utility-maximisation can be – and for good measure actually is being – accomplished.

This impregnable circular reasoning provides the theoretical framework in which assumptions can run riot, enabling the economists concerned to derive the desired conclusions from the earlier enunciated ‘assumptions’ and ‘suppositions’, without any need to subject them to the test of actuality. (This is how we are offered explanations in terms of ‘general equilibrium’, ‘perfect competition’, ‘competitive equilibrium’, ‘perfect freedom of exchange’, etc., etc.) If discrepancies and anomalies appear for some reason, that can be also quite easily remedied by the attribute of ‘normal’ as the convenient qualifier and help to put the derailed carriage back on the rails, or, with better apologetic foresight, to prevent it from being derailed by the intrusion of reality. ‘Normal’ is whatever needs to be defined in that way in order to fit the requirements of the theory. Indeed the category of ‘normality’ is used in great abundance, from Stanley Jevons (as we have seen earlier with reference to his ‘corrective’ to his own sun-spots theory of periodic crises) to everybody else, including Marshall who uses it hundreds of times as an obliging self-referential escape-clause in his Principles of economics and in his other writings."
Beyond Capital, by Istvan Mészáros

Also, Hilferding tears apart this argument in Böhm-Bawerk's Criticism of Marx.

Also, Anwar M. Shaikh provides massive statistical support for the labor theory of value in The Empirical Strength of the Labour Theory of Value.

Also, as Feela has probably already mentioned, Steve Keen has exposed numerous flaws in bourgeois economics in his book Debunking Economics.

Also, you should check out my earlier post where it was shown mathematically that bourgeois economics is crap. You could, of course, try to show that the math is wrong. That or prove that 1=0.

By the way, do you have any experience with economics outside highschool and low-level college courses?

 

[Panache]

You could, of course, try to show that the math is wrong. That or prove that 1=0.

Sure.

1. a = b + 1 1.
2. (a-b)a = (a-b)(b+1)
3. a2 - ab = ab + a - b2 - b
4. a2 - ab -a = ab + a -a - b2 - b
5. a(a - b - 1) = b(a - b - 1)
6. a = b
7. b + 1 = b
8. Therefore, 1 = 0

There you go.

It's beside the point though. The relation of marginal cost to marginal revenue has pretty close to nothing to do with whether or not price measures utility.

By the way, do you have any experience with economics outside highschool and low-level college courses?

Yes I do. Do you have any experience with economics outside of pretentious acedemic theory?

How's your experience in propositional logic?

 

[Feela]

Just ignore him KC, we have both spelt out the massive holes in his argument that a 5 year old could spot.

I find it strange Goldenboy is thanking him, he's either very biased or also has problems with basic logic and reasoning.

 

[Feela]

So, yeah, the fact that price measures utility is a tautology, just like the fact that distance measures the space between two objects. Just like the fact that velocity measures how fast something travels. The fact that measurements measure the things that they measure is a tautology.

I say labour determines price generally. Seeing as you have no proof utility determines price you cannot rebut me.

And velocity can be determined independently, utility can not. What about subjective and objective do you not understand?

Again the analogy of carbon dating is apt. Imagine it was not yet used for dating, then to find out if it could you'd have to independently discover the age of objects and compare their carbon 14 deteriotation or independently measure the deterioration of atoms over time to decide if it could be used.

This is where utility is at, it has been suggested it determines price but there is no proof and you have offered none. Kindly do so or go away.

 

[Kushinator]

I only have an issue with the term measurement.

Use value instead, and maybe you would acquire an alternative outcome.

Instead, you have become seemingly obsessed with measurement, and get upset when a medium of measurement has been implemented.

Value is much harder to attach a quantity to...

 

[Panache]

I say labour determines price generally. Seeing as you have no proof utility determines price you cannot rebut me.

You think labour determines price? That theory is ridiculously easy to debunk.

If I go out in the woods and spend a stright 18 hours collecting the heaviest rocks I can find, I have worked really hard for a long time and now have a pile of rocks.

If Milenko Prvacki stays home, spend half an hour tossing some paint on some canvas, he now has a peice of art.

So which has the higher price tag? My pile of rocks that I spent 18 hours of backbreaking labour collecting?

Or Milenko's painting, which he spent half an hour of playing with paint on.

I will give you a hint... it isn't the pile of rocks.

And velocity can be determined independently, utility can not. What about subjective and objective do you not understand?

All right. Explain to me how velocity can be determined independently of how fast something is moving. I got to hear this.

Again the analogy of carbon dating is apt. Imagine it was not yet used for dating, then to find out if it could you'd have to independently discover the age of objects and compare their carbon 14 deteriotation or independently measure the deterioration of atoms over time to decide if it could be used.

When was price not yet used to measure utility? Its not an apt analogy apt at all unless you can show how utility was measured prior to price.

This is where utility is at, it has been suggested it determines price but there is no proof and you have offered none. Kindly do so or go away.

Its really quite simple. I won't exchange my product for your product unless your product has more utility to me than my product.

Even if it took twice has much labour to create your product, I still wont trade you my product for your product unless it has more utility.

If you had a painting by Milenko Prvacki, would you trade it for a useless pile of rocks just because it required more labour to collect the rocks?

The very idea that you would trade something with a lot of utility for something that was useless just because it required more labour is ridiculous.

 

[Kushinator]

Not to a socialist. They believe that your talent is no better than anyone else's.

Ever wonder why it is perfectly acceptable for people with below average skill to be willing to be considered average (compliment). And people who have more than above average skill would hate being called average (insult)...

What has more utility. A medical service from a doctor who graduated top of his class from IUPUI, or top of his class from John Hopkins???

 

[Feela]

You think labour determines price? That theory is ridiculously easy to debunk.

If I go out in the woods and spend a stright 18 hours collecting the heaviest rocks I can find, I have worked really hard for a long time and now have a pile of rocks.

If Milenko Prvacki stays home, spend half an hour tossing some paint on some canvas, he now has a peice of art.

So which has the higher price tag? My pile of rocks that I spent 18 hours of backbreaking labour collecting?

Or Milenko's painting, which he spent half an hour of playing with paint on.

I will give you a hint... it isn't the pile of rocks.

The theory is only applicable to reproducible goods, it also only relates to goods which have a use value and were made with the socially average production method, time and effort.

If a commodity were in no way useful, - in other words, if it could in no way contribute to our gratification, - it would be destitute of exchangeable value, however scarce it might be, or whatever quantity of labour might be necessary to procure it.
David Ricardo

You're not talking to an amateur here, you have failed to debunk it as you've just constructed strawmen and shown your own ignorance.

All right. Explain to me how velocity can be determined independently of how fast something is moving. I got to hear this.


When was price not yet used to measure utility? Its not an apt analogy apt at all unless you can show how utility was measured prior to price.

Do you have some kind of mental issues? A ****ing ape could see the massive flaws in your reasoning.

Carbon 14 dating was no good for dating until it could be proved that its breakdown could be used this way. Utility has yet to reach the proof stage. Please show the proof or get lost.

Its really quite simple. I won't exchange my product for your product unless your product has more utility to me than my product.

Even if it took twice has much labour to create your product, I still wont trade you my product for your product unless it has more utility.

If you had a painting by Milenko Prvacki, would you trade it for a useless pile of rocks just because it required more labour to collect the rocks?

This is not proof, it is a meaningless, Robinson Crusoe style story. I want proof that the price I pay for something in modern society is determined by relative utility.

Even in your analogy, which is pretty useless and unrealistic, you don't prove this.

The very idea that you would trade something with a lot of utility for something that was useless just because it required more labour is ridiculous.

Who suggested that?

"Lastly nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value."Karl Marx.

Don't construct strawmen on top your other massive failings in logic. Do you think Smith, Ricardo, Marx and Mill were idiots?

 

[Feela]

I only have an issue with the term measurement.

Use value instead, and maybe you would acquire an alternative outcome.

Instead, you have become seemingly obsessed with measurement, and get upset when a medium of measurement has been implemented.

Value is much harder to attach a quantity to...

I'm not sure what you are saying but I'm simply looking for proof that in our societies relative utility determines price.

I can say that the amount of sheep in a given area measures its days of rainfull per year, but without independent proof this is meaningless, utility theory has not yet got this proof.

 

[nkgupta80]

I say labour determines price generally. Seeing as you have no proof utility determines price you cannot rebut me.

And velocity can be determined independently, utility can not. What about subjective and objective do you not understand?

Again the analogy of carbon dating is apt. Imagine it was not yet used for dating, then to find out if it could you'd have to independently discover the age of objects and compare their carbon 14 deteriotation or independently measure the deterioration of atoms over time to decide if it could be used.

This is where utility is at, it has been suggested it determines price but there is no proof and you have offered none. Kindly do so or go away.

labour value theory doesn't take into account the scarcity of the product.

Also, one piece of clothing would take as much time as another, but people choose, and what they like ultimately decides the value. Brand recognition doesn't fit with labor value. I mean intuitively, each case study can be brought back to supply and demand, firms wanting to increase their profits, balanced out by consumers liking or not liking their product at that specific price.

 

[Kushinator]

Feela

What about a Louis Vuitton purse as opposed to a leather one???

What about Bruno Mali shoes as opposed to Kenneth Cole???

What you are saying was that if two items took the same amount of labor (or labour), and cost of production, they should cost the same???

Clearly this isnt the case...

 

[Feela]

labour value theory doesn't take into account the scarcity of the product.

It was only meant to deal with reproducible goods.

"Commodities which are monopolized, either by an individual or by a company, vary according to the law which Lord Lauderdale has laid down: they fall in proportion as the sellers augment their quantity, and rise in proportion to the eagerness of the buyers to purchase them; their price has no necessary connection with their natural value: but the prices of commodities, which are subject to competition, and whose quantity may be increased in any moderate degree, will ultimately depend, not on the state of demand and supply, but on the increased or diminished cost of their production."Karl Marx.

Note: Marx like the classical economists was smart enough to realise the supply curve, if it is okay to use such static analysis, slopes downward. Mainstream economics says it slopes upwards because this is needed for the theory to stay together, it is empirically incorrect.

Also, one piece of clothing would take as much time as another, but people choose, and what they like ultimately decides the value. Brand recognition doesn't fit with labor value. I mean intuitively, each case study can be brought back to supply and demand, firms wanting to increase their profits, balanced out by consumers liking or not liking their product at that specific price.

You are correct in saying that these things definitely skew the analysis as they interfere with the reproducible nature of the goods.

Supply and demand are rather meaningless on their own, I'm looking at the specific idea surrounding marginalism. The great classical economists like Smith, Ricardo, Mill and Marx realised in the short run supply and demand determined price but they didn't go in for bullshit like marginalism.

 

[Feela]

Feela

What about a Louis Vuitton purse as opposed to a leather one???

What about Bruno Mali shoes as opposed to Kenneth Cole???

What you are saying was that if two items took the same amount of labor (or labour), and cost of production, they should cost the same???

Clearly this isnt the case...

Don't post strawmen, at least have a small amount of knowledge on the subject before posting.

The Labor Theory of Value - A FAQ