Reworking of the labour theory of value to incorporate Austrian criticisms.

[LibertarianSocialist]

Hey guys, I've been trying to consolidate Austrian economic arguments with the ltv.

During my research into the economic school I have been convinced of certain arguments, most notably of time preference and deferred consumption. Alongside the argument that market price is a product of scarcity and perceived utility, I have been forced to relegate the ltv to a secondary, though significant, factor in value and price formation.

Even though I would probably never reject the ltv, being an essential part in understanding economic phenomenon, as it stands it is too simplistic to describe all economic phenomena.

 

Do you guys think inversely that the ltv might play any role in complementing Austrian economic theory? How might you alter socialist theory to incorporate truisms from other schools of thought?

[shirgall]

The labor theory of value only relates to real value when it is a persuasive argument to get someone to pay a higher price for something than they would otherwise. This *does* happen with certain campaigns like "Buy American" or "Fair Trade Coffee". Most of the time, however, people are not swayed by it.

 

Value is incredibly personal, and relates to what you would rather have than whatever you are giving in return. This is why no central computer or committee is appropriate for setting prices and why it is so hard to set a price on a product or service without understanding your customer.

[Mister Mister]

yes my understanding of Mises' contribution to the subject is that, prices can confuse us and lead us to believe that there is a comparative, objective value, between two objects.  For example you might think that a $1000 guitar is twice as valuable as a $500 gold ring.  But as Shirgall said, valuable, is incredibly personal, most people would prefer to save their $1000 dollars, or spend it on something else.  Mises correctly identified, that the only way we can define value, is as a personal preference, at a given moment.  The only way we can measure value, is by peoples actions, not words.  Specifically, the test for the value of anything is, what is someone willing to give up for it?  If you had a liter of water, you might drink it.  But if you had 2 liters, you might drink one, and cook with the other.  You might use a third to water your plants, and save a fourth for tomorrow.  So you can define a hierarchy of values for that person, in that moment 1. drinking 2. cooking 3. gardening, and so on, but there is no way to say that you value drinking 2.5 times as cooking or anything like that.  Thus, value is subjective and subject to change over time. 

 

If value is fixed and absolute, on the other hand, then every transaction is potentially exploitative.  This is at the core of most socialist theories I think, and is implied when people say things like "underpaid" or "overpriced".  The problem is, that there is absolutely no objective or empirical test to determine what the "fair price" of anything should be.  This is usually just a way of manipulating people.  As Nietzsche first pointed out, and Stef describes very well, most ethics are just a way of getting resources from people.  This kind of thinking is also incredibly condescending in the way that it avoids assigning responsibility to anyone who isn't doing well, or who makes choices you might disagree with.  Contempt for free market successes like Wal-Mart or Apple, is contempt for the common man disguised as populist virtue.

I compliment your integrity for recognizing the validity of certain aspects of free market and Austrian economics.  When you say "How might you alter socialist theory to incorporate truisms from other schools of thought?" I wonder why should we even try to do this?  My guess is that you have some emotional affinity for certain sentiments of socialism, though maybe you recognize that much of it is not logical or practical.  I sympathize, because at one time I wanted to reconcile Left Libertarianism with Ancapism, though I was probably not as strongly attached.  But I found that their arguments were always ultimately manipulative - you could never get them to simplify their language down to principle. 

What it mostly comes down to, I think, is that the free market leads to results that they don't like, particularly inequality, as people possess a VAST difference in ability, intelligence, work ethic, personal values, and to some degree, luck.  So leftists want to work the system to produce a more favorable outcome more in line with their personal preferences.  Left libertarians may even agree that the free market is a good idea in theory, but their arguments against it always come down to utilitarianism, and a utopian vision of how things can be.  Even though they say they are anti-authoritarian, they still think like Central Planners to some degree.  I'm just curious what aspects of socialist theory do you have a hard time letting go of, and why?

[jughead]

^ So well said RoseCodex.

[David Ottinger]

If you go trade in the markets, you'll quickly find that price and value are not the same.