[quote]Ryan P. McCarter wrote:
[quote]orion wrote:That is basically the labor theory of value which is complete and utter nonsense, and we know that for over 200 years now.
But even if Marx did not know that, even though he could have, today one should know that value is not objective but subjective and ordinal and not cardinal.
And everyone who has not undrstood what I just wrote is probably a socualist because his theoretical economic knowledge is so hopelessly outdated that he might as well deny the germ theory of disease .
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The subjective value theories fail to describe reality and result in circular reasoning. The labor theory is the only one capable of describing our reality (not necessarily important to an Austrianist, who does not take reality into account).
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But you know what, I will give you the basics.
Both of us have preferences.
Those are ordinal, i.e. you can say that you like an orange more than a banana but not that you like a banane 1,7 times more than an apple.
If you could actually do that, you would have a cardinal utility function.
Now even though everyone has an ordinal utility “function”, everyone has a different one, which makes trade possible.
If I like a banana more than an orange and you like the orange more than the banana we trade and, get this !!!, we are both better off.
There is no exploitation as long as the exchange is voluntary.
An objective price theory postulates that things have “value” in and of itself. These leads to resuÃ?¶ts that are blatantly absurd.
F.E. if you are thirsty and you drink you are not thirsty anymore and suddenly water becomes less important to you. If the value of water was objective this should not happen, but since it is subjective, i.e. depends on how much you want it, it does.
If the labor theory of value was right, you could dig a ditch in the moirning and fill itg uop again in the eveneing and it would have an objective value. But, if it has “value” why is noone going to pay for it? Because they do not, subjectively, value it at all.
Objective prioce theories break down at the slightest challenge and cannot account for things like decreasing marginal utility, voluntary exchange and other, most basic economic activities people perform daily.
I.e. they are bullshit.