Difference between revisions of "Dan Sullivan quotes"
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Marx acted as though the labor needed to make an item was everything, and subjective value was nothing, while Austrians talk as though subjective value is everything and necessary labor is nothing. The reality is that the labor components of these items equalize through the higgling of the market, exactly as Smith said it would. | Marx acted as though the labor needed to make an item was everything, and subjective value was nothing, while Austrians talk as though subjective value is everything and necessary labor is nothing. The reality is that the labor components of these items equalize through the higgling of the market, exactly as Smith said it would. | ||
Smith left out the land component, which Ricardo solved by showing that the value of land was a result of the additional return to labor it provided over marginal land. | Smith left out the land component, which Ricardo solved by showing that the value of land was a result of the additional return to labor it provided over marginal land. | ||
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Revision as of 12:26, 5 April 2019
1
The document is not the contract; it is merely evidence of the contract. The contract is simply the mutual understanding between parties, and is usually based on custom. My favorite example is that when you visit someone's home and they as what you would like for dinner, the assumption by custom is that it is a free dinner. When you enter a restaurant, the assumption is that they are asking you what dinner you would like to purchase. There is a contract in the latter case, whether you signed anything or not.
When you acquire property in a municipality, you have agreed to any terms of that municipality that are consistent with custom whether you have signed anything or not. Even contracts within condo associations do not have to include items that are consistent with custom, as such items are generally understood.
2
Smith's labor theory of value was a theory of tendencies, like water seeking its own level. Smith started out saying that all value is subjective, including the value of labor needed to produce wealth in the first place. However, when the market value of an item exceeds the labor cost of making it, the response is to hire more workers and make more until an equilibrium is reached. Suppose, for example, that people making tables and chairs are getting $20 an hour, and similarly skilled people making chests of drawers are getting $30 per hour. Well, fewer people will make tables and chairs and more will make chests of drawers until the return to both are approximately the same. The end result is that the price of labor-produced goods equalizes around the return to labor. That is the actual labor theory of value, and Austrians are too busy straw-manning a bogus theory to deal with the actual theory. Marx acted as though the labor needed to make an item was everything, and subjective value was nothing, while Austrians talk as though subjective value is everything and necessary labor is nothing. The reality is that the labor components of these items equalize through the higgling of the market, exactly as Smith said it would. Smith left out the land component, which Ricardo solved by showing that the value of land was a result of the additional return to labor it provided over marginal land.
