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Wednesday, April 12, 2006

Theories of Value, Part I

Recently, Kevin Carson's Studies In Mutualist Political Economy was featured in the Journal of Libertarian Studies, edited by Roderick Long, one of my favorite thinkers among the Mises Crew. The JLS was the Austrian response to the Studies.
Though some of the responses (notably Reisman's and to some extent, Block's) were a bit silly, most of them focused on his revised Labor Theory of Value. This is the biggest theoretical difference of opinion between Austrian and Mutualist economics, most likely. (the other being discussed by Prof. Long, the difference between usufruct and lockean homesteading approaches. It's not that big a difference that a non-economist would likely notice it.)

As you may have guessed, either from the title of this blog, or by reading enough of it, I don't exactly agree with either approach. Yet, I believe that they have more in common than one might think. (I certainly don't wish a pox on either the Neo-Austrian economists nor the Carsonian Mutualists, btw. I think between them, there is an almost complete reconstruction of a general social science, in fact.)

I think the roots of all production cost are time, energy, natural resources and luck*. A "good" that requires very little of any of these to produce will not be as scarce, and in general its marginal value will be lower, than a "good" that requires more of any of these to produce, given the same desire for it. Now desire is the most subjective factor in all of this. No matter how hard it is to make a feces-covered brick, I don't want one. And things that are more desirable, will command a higher price, given the same difficulty of production.
Value, or marginal scarcity, is a very complex factor depending on raw expenditure of production and desire, and comes from both. Both of these are "subjective" but bound each other. I'd love a supercomputer, but I don't want to break my ass too much for one.

* chemistry and cooking are two fields where luck comes into play in successful production.

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