some things change, other things cannot - happy and bittersweet mayday, friends
This is correct if you define conducting a transaction as its own kind of work.
If we start in a frictionless vacuum, in other words we’re in outer space, waiting to be rescued next month, and I have lots of water and you have lots dried food, we will create a massive amount of wealth by simply exchanging half of our food and water.
If a third party does the exchange by transporting the food and water, their work has created value by changing the location of the products, as value is not inherent in any product, but inevitably tied into its context.
Even investors create value by doing the work of processing information and allocating; capital used in producing some pointless widget nobody really wants creates far less value than capital used in solving a problem many people have. One may object to the present-day distribution of economic control, but the economic contribution of optimizing the allocation of capital is genuine and one would expect to find some mechanism for it in any society that has any degree of scarcity in capital.
But then there’s the fact that value isn’t born in a vacuum of pure production but in a complex context where one could also just as well argue that the end use is where value-creation happens and everything else is just preparation to make it possible.
For example, if I build a bednet-making machine, it has value because a bednet-maker can use it to make bednets, which have value because a bednet-trader can deliver them to Mozambique, where they have value because people can set them up to protect themselves.
No single act in the chain creates the value, but rather the sum of the work and exchanges propagating in all directions. When the outputs exceed the inputs, value is created, and prices seek to balance this mechanism with all the other possible outputs and inputs that could have occurred.
Of course, with such a definition “work” simply means “actions that create value”, which may not an obvious natural joint in reality for many people. Yet it seems inherently correct and inevitable to me. Value-creators unite against rentseekers!
(via oligopsony-deactivated20160508)
2 months ago · 6 notes · .permalink
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