Rollout

http://www.youtube.com/watch?v=Q0bFP5WhYcQ Rothbard sums it all up here.

A socialist attacking capitalism due to market failures is very ironic considering a socialist economy can't even sustain itself. Socialism is just a fairy tale belief system that can never be translated into reality. It fails before it even begins.

Starting with Crusoe it's easier to imagine. I'm going only from memory so this won't be as accurate as it should be. A single person on an island by himself with no money or goods. He is able to catch only enough fish per day to keep himself alive and no more. He decides to build a net to catch more fish. This net will increase his productivity (he hopes), giving him time in the day for things other than fishing. In order to produce this net he must stop fishing for that time, and therefore reduce his consumption. He will be hungry for a day because he will be without fish. He made a sacrifice of reduced current consumption for increased future consumption. So after his net is made, he is now able to feed himself and also have extra fish. This is the start of savings. These extra fish can now be used as a buffer. If he saves a week's worth of fish, he can perhaps build a boat to go to areas of higher fish populations. So then he has increased his capital stock from a net to a net plus a boat. This was only possible by the extra savings allowed by the net. If he simply consumed the extra fish he would never have the time necessary to make the boat. This process of deferred consumption and savings to enable the production of capital goods is what grows an economy.

Agreed, and to add a little more. Wages are determined in the same way any other price is determined for a factor of production. Each factor tends to receive, in Austrian terms, it's DMVP (discounted marginal value product). This is true for machines, land, commodities, etc. And all are affected by supply and demand the same way.

I haven't watched any of this particular debate, but what's with all you guys and Murphy? He's easily one of the best Austrian economists alive today. He isn't any sort of "rogue" that I know of among Austrians. He's very well respected actually, at least among the Misesean/Rothbardian branch of the Austrian school. I can't speak for the other variants.

Actually a chair can be a commodity, any good can be as long as there's sufficient uniformity of that particular good across its supply base. Services are also commodities in the term's most broad sense.From wiki. In any case, you're missing the point of his question. What he's really asking is if labor is a factor of production, and therefore should be treated the same way as other factors, such as commodities. The answer is yes. Economically speaking there's no difference. The same laws apply to it that apply to other factors.

By the way you're using the term commodity, yes labor is a commodity. Labor is affected by the same economic forces as other factors of production and should be treated as such. For example, minimum wage laws act upon the labor supply in the same way a minimum price law would act on the supply of a different commodity. Effective price floors cause excesses in supply. In the case of labor an excess supply means unemployment. For a different commodity like copper or gold it would also result in excess supply, i.e., unused resources. Wages can't be mandated by the state without bad consequences just like price controls on anything else result in either surpluses or shortages, depending on the type of price control, either a minimum or maximum.