The Importance of Subjectivism in Economics

The double inequality of value.

After many years, Frédéric Bastiat remains a hero to libertarians. No mystery there. He made the case for freedom and punctured the arguments for state socialism with clarity and imagination. He spoke to lay readers with great effect.

Bastiat loved the market economy, and badly wanted it to blossom in full—in France and everywhere else. When he described the blessings of freedom, his benevolence shined forth. Free markets can raise living standards and enable everyone to have better lives; therefore stifling freedom is unjust and tragic. The reverse of Bastiat’s benevolence is his indignation at the deprivation that results from interference with the market process.

He begins his book Economic Harmonies (available at the FEE store) by pointing out the economic benefits of living in society:

It is impossible not to be struck by the disproportion, truly incommensurable, that exists between the satisfactions [a] man derives from society and the satisfactions that he could provide for himself if he were reduced to his own resources. I make bold to say that in one day he consumes more things than he could produce himself in ten centuries.

What makes the phenomenon stranger still is that the same thing holds true for all other men. Every one of the members of society has consumed a million times more than he could have produced; yet no one has robbed anyone else.

The Existence of Privilege

Bastiat was not naïve. He knew he was not in a fully free market. He was well aware of the existence of privilege: “Privilege implies someone to profit from it and someone to pay for it,” he wrote. Those who pay are worse off than they would be in the free market. “I trust that the reader will not conclude from the preceding remarks that we are insensible to the social suffering of our fellow men. Although the suffering is less in the present imperfect state of our society than in the state of isolation, it does not follow that we do not seek wholeheartedly for further progress to make it less and less.”

He wished to emphasize the importance of free exchange for human flourishing. In chapter four he wrote,

Exchange is political economy. It is society itself, for it is impossible to conceive of society without exchange, or exchange without society. …For man, isolation means death….

By means of exchange, men attain the same satisfaction with less effort, because the mutual services they render one another yield them a larger proportion of gratuitous utility.

Therefore, the fewer obstacles an exchange encounters, the less effort it requires, the more readily men exchange.

How does trade deliver its benefits?

Exchange produces two phenomena: the joining of men’s forces and the diversification of their occupations, or the division of labor.

It is very clear that in many cases the combined force of several men is superior to the sum of their individual separate forces.…

Now, the joining of men’s forces implies exchange. To gain their co-operation, they must have good reason to anticipate sharing in the satisfaction to be obtained. Each one by his efforts benefits the others and in turn benefits by their efforts according to the terms of the bargain, which is exchange.

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  • Fluffy||

    I think what's happening is that you're confused by the similarity between a subjective value and an agent-relative value.

    An object can objectively have different values to different people. A book written in Spanish has a higher value to a man who can read Spanish than to a man who reads only English. A quart of tomatoes has a lower value to a man with more tomatoes than he can eat than it does to a man with no tomatoes at all.

    If the guy with a Spanish book he can't read trades it for a quart of tomatoes Tomato Guy can't eat, they both have gained.

    But these aren't subjective values, and it's important to remember that. Since the values are set by objective facts about the circumstances of the two traders, they're still objective values. But there are two objective values in play for each element of the exchange; the objective value to the first party, and the objective value to the second party.

    Scope it out:

    A. Spanish book objective value to owner = 0
    B. Spanish book objective value to Spanish speaker = 5
    C. Tomato value to owner = 2
    D. Tomato value to guy with no tomatoes = 5

    Since B = D, the two traders are exchanging equal values. Since DA and BC, both parties profit. Both parties don't profit an equal amount, but this is not relevant.

    It's important to not be misled into thinking that these values are subjective, because that opens the door to New Soviet Man. "We'll just convince people to exchange goods for nothing, but subjectively like it."

  • OldMexican||

    But these aren't subjective values, and it's important to remember that.


    People collect books written in Latin that they can't read.

    Value is subjective. Get over it.

  • Randian||

    People collect books written in Latin that they can't read

    Which is not a refutation at all.

    But, given your intellectual "vigor", not surprising.

  • OldMexican||

    Re: Randian,

    Which is not a refutation at all.


    Of course it is, moron. Fluffy is establishing value on pragmatic terms. You're just being a knee-jerk jerk, like always.

  • Randian||

    Fluffy is establishing value on pragmatic terms

    No, he is not. He said it was agent-relative, which is not the same as subjective.

  • Killazontherun||

    It's a distinction without a difference Fluffy makes. Without agency there is no value in anything.

  • Fluffy||

    People collect books written in Latin that they can't read.

    Not for the same thing.

    Since most items you can gain by trade have a pretty wide range of uses, B and D have a pretty vast range of possible values.

    But once you decide that you're just too damn lazy to wade through those values and declare that they're entirely subjective, the entire market argument collapses. And that's probably why Proudhon is pushing in that direction in the cited text. Because it would mean that interference in the market isn't actually destroying value - the people being interfered with are simply being recalcitrant in refusing to change their totally-entirely-subjective perceptions to the altered market reality. If all values are subjective, when the statists go all Scooby Doo villain and say, "We would have gotten away with it, if it wasn't for you damn kids!" they're right.

  • OldMexican||

    Re: Fluffy,

    Not for the same thing.


    How would you know?

    Since most items you can gain by trade have a pretty wide range of uses, B and D have a pretty vast range of possible values.


    Of course, but that does not mean value is determined by the practical uses of a good. You cannot know that because you cannot read minds. In essence, you're just giving YOUR opinion on how you would use a few things and then derive a theory of trade from it.

    But once you decide that you're just too damn lazy to wade through those values and declare that they're entirely subjective, the entire market argument collapses.


    What an assertion. Subjective value theory is not an arm-throwing surrender, Fluffy, but the logical conclusion to the question why people values some things more than others. Subjective value theory explains this perfectly, whereas a pragmatic value theory fails in many circumstances, just as the labor theory of value does. For instance, why would a person that speaks Spanish value more a first edition of a Dickens' novel in English than a current edition of Marquez' Hundred Years of Solitude in Spanish, when the person can't read English? The fact that he does cannot be explained by the practical reality of knowledge of Spanish, which means something else is afoot.

  • OldMexican||

    The fact is that you're easily confusing the situation by looking at things in pragmatic terms. Of course, the case can be made that for a man putting together a bicycle for his son, an instructions booklet in English will be more useful than one in Spanish; the fact that the man would value the English version more than the Spanish version can lead you to conclude that the valuation is made in purely pragmatic terms, but that conclusion is entirely derived from your own valuation, not the man's.

  • dinkster||

    Men don't read the assembly directions. Everything else sounds good, though.

  • Fluffy||

    The subjective value theory would also remove one of the most critical elements of the market, namely its capacity for punishing error.

    The way to achieve market success is to continually find opportunities for trade where D is greater than A, and the maximize the delta between D and A. If you do that improperly because you're stupid and don't correctly perceive D's value or A's value to you objectively given your circumstances as valuing agent, you fail.

    If all values are subjective, it's impossible for me to erroneously believe I have found a situation where D is greater than A. How could I ever be in error? D would always greater than A, if their values are set by the act of my subjective evaluation. But since sometimes businesses fail, it's pretty clear that D is not always greater than A just because I think it is.

  • np||

    But even when you state D or A's value "objectively" they are still relative to each individual, even when there emerges a market consensus, so it is still subjective.

    Any objective value would have to be universal, but that also implies being able to predict human behavior like we could model outcomes mathematically

  • Randian||

    Objectivity does not depend on Platonic universals that "exist" outside of context.

    Any objective value would have to be universal, but that also implies being able to predict human behavior like we could model outcomes mathematically

    To a certain extent, we can do that very thing. That is what supply/demand is all about.

    If value were ultimately subjective, that would mean that the price of a computer could be 1 million dollars and we could say nothing meaningful about the expected shift in the market as a result.

  • np||

    That's still only a rough estimate with probabilities based on current markets and past relative experience.

    To illustrate the subjectivity of the value of the computer, we could take the same computer, price it at $10 or say a ton of fish, and try to trade it with primitive natives of some lost tribe who've had little to no outside contact, who would still not buy it.

  • Fluffy||

    The computer would objectively be of no value to the members of a primitive tribe.

    But let's make it an assault rifle and 1000 rounds of ammo.

    Let's say we offered the assault rifle and 1000 rounds of ammo to a member of a primitive tribe whose people were under attack by another primitive tribe. And all we ask for is a basket of fish.

    Objectively, that's a good exchange for the tribesman. For nothing more than some fish, he can take the assault rifle and blow away the guys from the enemy tribe. WIN!

    But let's say he's never seen a rifle before, and has no way of knowing what it does. So he refuses to make the trade, because he thinks we're just offering him a funny-looking stick.

    His preference is wrong. He has made a mistake. It's based on a lack of knowledge on his part.

    But if all value is subjective, we can't say that he's made a mistake. Even though he obviously has.

    The rifle was objectively of more value to him than the fish, and he fucked up by not making the trade.

    We have to be able to say this, because if we can't say it, a law that forbade him from making the trade wouldn't actually be harming him. If there's no real value there, then he won't be actually harmed if you stop him from making the trade. If all value is merely subjectively perceived, we can't tell the state that it's hurting the tribesman by forbidding the trade. It's just perception, and FUCK HIM HE CAN GET NEW PERCEPTIONS.

  • np||

    He's only made the mistake relative to our perceptions, and would have made a mistake according to his in hindsight, but only after discovery of purpose and use.

    We can't really know if he actually did make a mistake at that time. If he doesn't know how to use the gun, and thus would have never successfully operated it if he had made the trade, his decision could have been the right one.

    Or let's say that he would've figured it out. Still we can't say he objectively made a mistake because maybe the outcome turns out to be better that allowed him to make peace with the other tribe.

    Or it could be that he found out later and regretted the decision (hence he determined it to be a mistake) because of the other tribe's violent conquest.

    But whatever the future outcome and regrets or appreciations, he still acted rationally at that moment, despite subjective evaluation. That is, "I don't know what this thing (gun) is, therefore, I will not risk losing fish for something unknown"

  • np||

    We have to be able to say this, because if we can't say it, a law that forbade him from making the trade wouldn't actually be harming him. If there's no real value there, then he won't be actually harmed if you stop him from making the trade. If all value is merely subjectively perceived, we can't tell the state that it's hurting the tribesman by forbidding the trade. It's just perception, and FUCK HIM HE CAN GET NEW PERCEPTIONS.


    You're using a utilitarian criteria here. Opposing interference from the state should not be based on determination of harm, because conversely you can justify on the same grounds.

    Whatever the outcomes of a voluntary exchange--harmful or not--interference by the state with such trade, shouldn't be based on what someone else thinks about it or any determination of future mistake whether recognized by one party or both parties.

    Opposing the state should come from the fact it is aggressing or using force against individuals, voluntary exchange, regardless of the outcome, and regardless if they did decide to trade or not.

  • Fluffy||

    But whatever the future outcome and regrets or appreciations, he still acted rationally at that moment, despite subjective evaluation.

    If you act rationally based on imperfect information, you can still be wrong.

    When you describe the alternative outcomes that might occur, those are still outcomes - facts outside the subject's consciousness. You're increasing the complexity of the decision-making process, and showing us how hard making correct decisions can be, but as long as you keep describing outcomes you're not making the value any less objective.

    In fact, one good way to look at the Invisible Hand is to say that when people are free to explore alternatives and make decisions some people will make the right decisions and succeed, and some people will make the wrong decisions and fail, and since making the wrong decision depletes your resources and assets over time this shifts resources and assets to people making better decisions.

  • VG Zaytsev||

    Let's say we offered the assault rifle and 1000 rounds of ammo to a member of a primitive tribe whose people were under attack by another primitive tribe. And all we ask for is a basket of fish.

    Why would you trade an assault rifle and 1,000 rounds of ammo for a basket of fish?

    Your premise is idiotic so it's hardly surprising that an idiotic conclusion flows from it.

  • Zeb||

    Depends on how big the basket is. And how many assault rifles you have.

  • Pound. Head. On. Desk.||

    Any objective value would have to be universal, but that also implies being able to predict human behavior like we could model outcomes mathematically

    The objective is universal in principle, but then must be applied to people and circumstances which differ. The objective value of a heat source is clearly higher on the Western Antarctic Ice Sheet than atop Mount Etna.

    Physics is clearly objective, so clear you know of a method to predict the exact path of a particular nitrogen molecule when air is released from your car tire.
    Please look up Gas Diffusion, paying particular attention to Brownian Motion, then send your refutation of Random Walk to the Nobel Committee.

  • np||

    Yes I'm not disagreeing.

    I'm saying you can't model and predict human behavior and evaluation like you would in physics, or prove some economic/monetary value to be universally true like you would prove a theorem

  • Pound. Head. On. Desk.||

    I'm saying you can't model and predict human behavior and evaluation like you would in physics, or prove some economic/monetary value to be universally true like you would prove a theorem

    Sure you can. Certain principles are easy to understand, like the cheaper (on the consumption side) or more profitable (on the production side) you make something the more you get.

  • The Derider||

    You can't model the movments of an individual hydrogen atom, but you can accurately model the behavior of many hydrogen atoms in a gas.

    Similarly, you cannot model the choices of an individual human being, but you can model the behavior of many human beings in a market.

  • Fluffy||

    Subjectivity and agent-relativity are not the same thing.

    If I'm standing next to the human torch, getting shot with a flamethrower is much more harmful to me than it is to him. So that means that the reduction in value we experience from getting shot by a flamethrower is relative to us as individuals.

    But it's not subjective. I can't decide that getting shot with a flamethrower is a really good thing, just because I'm the valuing subject, damn it, and I want to say that. It's a bad thing outside of a circumstance where I want to die (a circumstance where the values are still objective, but I flip the axis on which the values are counted).

  • The Derider||

    We can model human economic behaviors mathematically.

  • ||

    Oh please enlighten us Joe.

  • OldMexican||

    Re: Fluffy,

    The subjective value theory would also remove one of the most critical elements of the market, namely its capacity for punishing error.


    Whose error?

    If all values are subjective, it's impossible for me to erroneously believe I have found a situation where D is greater than A.


    Why? You're equivocating, you're confusing subjectivism with caprice or happenstance. This is not so: A person can consistently prefer vanilla over chocolate all his fucking life, but you cannot contend that vanilla is more valuable in an objective way than chocolate. The market, as a knowledge-discovery device, can tell you what people prefer and value MORE over other things, but that does not tell you that good A is objectively more valuable than good B. Think of the buggy whip.

  • Randian||

    We can determine that it is more valuable to that person, which is agent-relative NOT subjective.

    but that does not tell you that good A is objectively more valuable than good B. Think of the buggy whip.

    As I stated upthread, objectivity does not depend on Platonic universals. It depends on the context. No one here championing objectivity over subjectivity is saying "drop the context and determine if a buggy whip is more valuable than a nuclear weapon". Of course it depends upon what the goal of the agent is, but that's relative to the agent.

    If Agent A and Agent B both want to ship goods to Destination X, it is silly to say that Agent A made the "smart" choice if he used a Conestoga Wagon and Agent B used a train or semi.

  • Killazontherun||

    We can determine that it is more valuable to that person, which is agent-relative NOT subjective.

    Again, you are making a distinction between subjective value and agency that doesn't exist. All value is derived through agency. When the human race is extinct there will be nothing of value no matter what products have been accumulated beside our corpses and not used. In such a world, bananas are going to be put to more purpose than gold.

    Marginal utility is an intrinsic property of valuation. It allows the market sorting of orders that you have trouble understanding exists in a world where all values are subjective.

  • Pound. Head. On. Desk.||

    People collect books written in Latin that they can't read.

    Value is a thing to be gained and kept and used. Evidently those who keep books they cannot read find some other use in them.

    The fact that a rancher, a farmer, an apartment dweller, and a chemist all find different values (positive or negative) for a ton of cattle manure does not make those values irrational. Each value lies in their use and burden to each person.

  • np||

    Both parties don't profit an equal amount, but this is not relevant.


    but you can really never make this comparison to begin with--of profits or utility between different people on the same scale--because you can't compare intrapersonal values interpersonally

    that's the reason why Austrians don't use cardinal value scales like you've illustrated with numerical assignments of utility, rather they use relative ordinal scales i.e.
    for Spanish guy at time X: tomatoes {greater than} book
    for non-spanish tomato guy at time X: book {greater than} tomatoes

  • Fluffy||

    but you can really never make this comparison to begin with--of profits or utility between different people on the same scale--because you can't compare intrapersonal values interpersonally

    Of course you can.

    If I trade you a glass of water in the desert for a Chuck E Cheese coupon, you profit more than me. Your life is saved. I get to play foozball for ten minutes. There's simply no way to not evaluate that exchange as a greater profit for you than me.

    It's OK, because the important thing is that I profited. Not how much profit you got.

    This is also critical to remember, because it's important in Elizabeth Warren type arguments, where the fact that I gain more profit from subsequent exchanges is seen as bad, and painted as being "stolen" from my counterparties in previous exchanges.

  • np||

    If I trade you a glass of water in the desert for a Chuck E Cheese coupon, you profit more than me. Your life is saved. I get to play foozball for ten minutes. There's simply no way to not evaluate that exchange as a greater profit for you than me.


    but you've just confirmed my point. Such a profit is relative to you and I only in such situation, hence subjective. Saying there's some inherent objective value in any of those items, would mean it would always be true of the relationship between the glass of water and the Chuck E. Cheese coupon for everyone.

    the exchange occurs when we both profit. Let us replace the Chuck E. Cheese coupon with money, say $10,000. At that time, in that situation, I value that glass of water more than $10,000, hence I profit. While at the same time, in that situation, you value $10,000 more than the glass of water, hence you also profit.

  • Randian||

    Objective =/= inherent and relative =/= subjective.

  • np||

    Well, that's what it means.

    Subjectivity implies relativity as well as impermanence (e.g. someone's value scales can change over time)

    Objectivity implies universality, being true regardless context. And that would only be the case in terms of value if it were inherent, something like physical or naturally universal property.

  • Fluffy||

    No, that's not what it means.

    A subjective value is a value declared by the subject y an act of will without reference to any outside objective condition.

    If the valuing agent has objective characteristics that make certain things harmful to it and certain things beneficial to it regardless of its arbitrary preference (i.e. a "nature") than values are relative but not subjective.

    Objectivity implies universality, being true regardless context.

    No it doesn't. I'm sitting in a room right now. I am objectively in a room; I'm here whether I want to admit I am or not. You are not in this room. So it's not universally true that we are in this room. So it's contextually, but completely objectively, true that I am in this room.

  • np||

    A subjective value is a value declared by the subject y an act of will without reference to any outside objective condition.


    People can make their own internal valuations with plenty of reference to outside objective condition and come to conclusions that are true for them and no one else. That each subject's value can differ given all objective criteria is precisely what makes it subjective.

    If the valuing agent has objective characteristics that make certain things harmful to it and certain things beneficial to it regardless of its arbitrary preference (i.e. a "nature") than values are relative but not subjective.


    You are conflating physical properties such as that we might consider "harm"--but for the sake of being more objective, let's say it's degrees and kinds of physical criteria of bodily damage--with internal value.

    You can't predict people's subjective valuation. You can't say just because it's physically harmful, or even if A is more physically damaging than B, that no one would want it.

  • np||

    .. cont'd

    Sadomasochists, suicidal people, cults (e.g. internal values of Branch Davidians were subjective, still in the face of great objective harm), and drug users for example. Even with drug users, you still wouldn't know, until they act. Maybe one person still wants to get high despite the harm, and another person wants to get rid of his addiction. In this case again, despite all objective criteria involved, it is an internal value comparison--subjective valuation (only true for that subject)--between his own various desires: his physiological cravings vs his well being. Both of which are objective.

    What is subjective is what he'll choose:
    physiological cravings {greater than} well being
    -vs-
    physiological well being {greater than} cravings

  • Fluffy||

    Even with drug users, you still wouldn't know, until they act. Maybe one person still wants to get high despite the harm, and another person wants to get rid of his addiction.

    We don't have to know before they act. We can evaluate the outcome of their actions and know in retrospect.

    That each subject's value can differ given all objective criteria is precisely what makes it subjective.

    Subjects may reach different conclusions based on the same objective criteria. But that doesn't mean they're all correct. Sometimes you choose wrong.

    A drug addict is actually a good example. If you fuck up your life and end up dead on the street, guess what? You chose wrong. If not, and you experience a lot of physical pleasure and avoid any negative consequences, then you chose right. But if you end up dead on the street, it would be stupid for someone to say, "Wow, he got what he valued so that's a great outcome for him!"

  • np||

    Bloomberg wants to restrict sugar intake and trans fats, etc. By objective science he's right. By your rationale based on previous above example with tribe, gun trade and state, you would be justifying use of state force in preventing people from "choosing wrong"

    But 'choosing wrong' is still relative. So what if he suffers negative consequences. It could be something he's willing to endure and even risk all for the sake of getting high, which again, he values more highly than the other consequences. You're only saying that from your perspective. Someone else can only truly determine if he chose rightly or wrongly by asking him about regrets. The same applies for any speculative transaction or things that are subjective.

    If not, and you experience a lot of physical pleasure and avoid any negative consequences, then you chose right.


    But again, that's your valuation. For someone else, lots of physical pleasure itself can be choosing wrongly. (As a side note, there are physiological consequences as well from any pleasurable activity, with dopeamine, resistance, habituation, etc)

    "Wow, he got what he valued so that's a great outcome for him!"


    Well yes, logical so, if he had no regrets, or if that's what he preferred (valuing cravings over health) even as conditions worsened. The key phrase being "for him". It's the same for any kind of risky endeavor, or anything valued highly by a few and not by most.

  • Randian||

    Someone else can only truly determine if he chose rightly or wrongly by asking him about regrets.

    No, because the results would dictate whether he chose rightly or wrongly.

    If I wanted to commit suicide, and I chose a glass of water as my object, when I inevitably fail to commit suicide, we can objectively say that I failed in my goal.

  • VG Zaytsev||

    I'm sitting in a room right now. I am objectively in a room; I'm here whether I want to admit I am or not. You are not in this room. So it's not universally true that we are in this room. So it's contextually, but completely objectively, true that I am in this room.

    And that has absolutely nothing to do with valuations of a trade.

  • Killazontherun||

    If the valuing agent has objective characteristics that make certain things harmful to it and certain things beneficial to it regardless of its arbitrary preference (i.e. a "nature") than values are relative but not subjective.

    The existence of harm doesn't enforce a value distinction that makes a decision more 'objective' than other decisions. What is the value of choosing a greater propensity to heart disease than to lung cancer? The difference between choosing the Andy Capp fries or the cigarettes in the break room. It is still a choice based on a subjective valuation made by the agent doing the choosing. Placing an objective criteria between the fries, the cigarettes, or anything else in that break room is absurd, and doing so is where the New Soviet Man of your first example really comes into play.

  • Randian||

    Consider that if the value were "subjective", you should just be able to convince yourself that the glass of water is just as valuable as a glass of poison.

    But in the context of this scenario, it is not.

  • np||

    IF I wanted to commit suicide, I sure would consider poison {greater than} water

  • Fluffy||

    But even in that circumstance, one would still be objectively more valuable than the other, and the determination of which one was more valuable wouldn't be up to you as a subject. It would be based on outside objective factors and circumstances beyond the control of your preference.

  • Randian||

    Yes, exactly this.

    If you want to commit suicide, you (probably) cannot do it with a glass of water, and the poison would be objectively more valuable in pursuit of the goal.

    Subjectivism would say that you could change the nature of the object and that any object could serve your purpose, and that is not true.

  • ||

    Except that the valuation of suicide as greater than living is itself subjective. You can't fallback on that to "prove" it's objective because the decision to suicide more than life is subjective value-judgement. So your conclusion that the poison is "objectively" of greater value to someone who wants to commit suicide is erroneous.

  • Randian||

    Even if the valuation of the aim is subjective does not mean that the assessment of value is.

  • ||

    Yes, it does. The value is based on subjective views. Hence, the value is subjective.

  • Mr Whipple||

    Maybe you really, really, really like foozball.

    The point is, I can't possibly know what your level of the anticipation of the satisfaction of wants a Chuck E Cheese coupon will provide you.

    It is not the actual satisfaction of wants, it is the anticipated satisfaction of wants, or the anticipated removal of a state of uneasiness.

  • np||

    It's important to not be misled into thinking that these values are subjective, because that opens the door to New Soviet Man. "We'll just convince people to exchange goods for nothing, but subjectively like it."


    Well all values of exchange are ultimately subjective. Assuming no coercion, there's never an "exchange for nothing". You may think the item is worthless or has no monetary value--and it could very well be that no one else beside this one person is willing to pay anything for the item--but it could still have "real" value to that person at that time (even if the person comes to regret the exchange later)

    There is also what Mises called psychic profit or value. So we could say for example, to one person: psychic value of heirloom everyone thinks is junk trinket zillion dollars. This is why cardinal values (numerical assignments) and interpersonal comparisons of utility fail to work out

  • np||

    lol, for about the squirrels, that should read:
    .. psychic value of heirloom everyone thinks is junk trinket {greater than} zillion dollars.

  • Mr Whipple||

    But you left out the most important part. Diminishing marginal utility.

  • Killazontherun||

    Bingo! Do Fluffy and Randian really think Menger and other economist who solved the dilemma of the classicist and Marxist schools drew up theories of value based on physical properties (even labor is a composite of physical properties) but were vexed to find value in the markets never reflected these properties deserving special consideration? Do Fluffy and Randian truly believe this distinction without a difference, this thing they are calling 'agent relative' as a factor separate from subjectivity created a special case that would have forced Menger back to his chalkboard with an eraser if he was only enlightened by the later day thoughts of Ayn Rand? That is what is really going on here right? Rand's theory of valuation based upon aesthetic considerations being misapplied in the economic realm? Well, that's what it smells like.

  • Killazontherun||

    the dilemma of the classicist and Marxist schools that drew up theories of value based on physical properties

  • ant1sthenes||

    That technically is subjective. Meaning, they are of the subject (the evaluator), not the object (the book/tomato). The object is unchanged in both cases.

  • Brandybuck||

    I think you have misunderstood what is meant by "subjective value". Not fault of yours, of course, as many of the promoters of Mises have dumbed down the concept. Subjective value is not two individuals deciding on an objective value of a good, but two individuals placing different rankings to their values. Bob values his apple less than he values Fred's orange, and Fred values his orange less than Bob's apple. No objective price has been set by the transaction.

    The value of something is more than just what the buyer and seller agree on. The key factor in subjective value is that value is not nominal but ordinal. This is crucial, and is what gives rise to marginal utility. You can't give an objective value to a good, because that good's value is only meaningful in when ranked with other goods. Bob may value apples higher than oranges but less than pears. But if he has twenty apples he may prefer an orange over an additional apple.

  • ||

    You would have been better with a smith and farmer analogy.

    A farmer produces enough food for 2 families but only needs enough food for 1 family. The Farmer puts very little value on half is produce.

    A smith makes an iron plow he has absolutely no use for.

    If the two trade their good with one another they both get something they put greater value on then the thing they are selling. In both cases the items they sell are of little value and the thing they buy is of great value.

    The relative inequality is why they trade and that inequality makes them both wealthier then they were before.

  • nuwriter||

    What are your units of measure?

    Are they the mysterious "utils"? To quote Murray Rothbard - "There ain't no such thing as a util!"

    You cannot quantify values in the manner you are. I cannot say that I like oranges 2.5 times as much as I like apples.

    Values are ranked, not numbered.

    As for your ideas about the "New Soviet Man" - that's a strawman, and a nonsensical one at that. Both sides must value that which the other side possesses MORE than that which they posses or they will not make the trade. I will not trade nothing for goods, as I will value something more than nothing, unless the thing I am getting rid of has for me a negative value.

    Your idea of the Spanish book having no value to its owner is also flawed. There being numerous people who speak Spanish in the world, and knowing that the book may well have some value to them, it is reasonable to assume that this trade value would bid up its price, and thus give the book value in trade for some other good.

  • Fluffy||

    Damn you squirrels.

    Since D is greater than A and B is greater than C, both parties profit. Both parties don't profit an equal amount, but this is not relevant.

  • ||

    But if all value is subjective, we can't say that he's made a mistake. Even though he obviously has.

    The rifle was objectively of more value to him than the fish, and he fucked up by not making the trade.

    "Obviously" and "objectively" don't mean what you think it means. Yes, it is possible to subjectively value something highly at one point, and later realize that it isn't what you now want, as anyone who has been infatuated with someone who they later grow to dislike can verify.

    But, assume the tribesman was a budding Gandhian peacelover, or the reincarnation of Jesus. Even knowing what that assault rifle was, such a person's subjective valuation of the rifle would be less than a loaf of bread. There's no such thing as an objective, fixed value. It depends on what a particular person WANTS at a given moment.

  • Randian||

    It depends on what a particular person WANTS at a given moment.

    Achieving what you want depends upon objective criteria.

    If the tribesman wanted to defend his tribe, then objectively speaking, turning down the gun in the context of his desires is the *wrong* move.

    If you believe that the subject can change the outcomes of a choice or trade with his mind, which is what subjectivism states, then you have no criteria to assess "success" or "failure".

  • ||

    Achieving what you want depends upon objective criteria.

    It depends on both objective AND subjective criteria, which makes it ultimately subjective.

    In the poison example, for instance, the desire of someone for suicide is itself a subjective, not an objective, judgment. So we can't say that the poison is "objectively" valued higher than the water since it's value is itself decided based on subjective criteria (i.e. that he values his death over his life.

  • Randian||

    So you are saying you can commit suicide equally well with a glass of water as you can with a glass of poison?

  • ||

    Are you saying that death is objectively of greater worth than life?

  • ||

    IF I wanted to commit suicide, I sure would consider poison {greater than} water

    Fluffy| 9.9.12 @ 11:44AM |#

    But even in that circumstance, one would still be objectively more valuable than the other, and the determination of which one was more valuable wouldn't be up to you as a subject.

    Wrong again. It would depend on the person's subjective view of how they would prefer to end their life. A man might prefer a shotgun because it is quick and presumably painless. A woman might prefer poison because she would want her body to be found looking as beautiful as possible.

  • Randian||

    What? Fluffy is saying that a glass of poison is more objectively valuable than a glass of water if the value is "ending your life".

    What the shotgun has to do with it, I have no idea.

  • ||

    It's also wrong because the view that their death is preferable to life is itself a subjective, not an objective, decision. So the entire valuation of poison vs. water vs. shotgun is subjective.

  • ||

    It doesn't really help Fluffy's critique that "agent-relative value" refers to the moral worth of certain actions over others in consequentialism, NOT to the different valuation of goods based on the person's motives for obtaining them. The way he has it, "agent-relative value" is simply "subjective value" with a different name. It's semantics.

  • ||

    If the tribesman wanted to defend his tribe, then objectively speaking, turning down the gun in the context of his desires is the *wrong* move.

    Well, no. Depends on how he was going about defending his tribe. Selling a single assault rifle, with a couple of clips of ammo, to a Plains Indian tribe in the mid-1800s that was currently at peace with the U.S. Government, might be catastrophically bad for that tribe if they were then emboldened to go to war with a government with the means to wipe them out. Staying at peace would be that tribe's least worst option.

    Giving Gandhi an assault rifle, and him firing it upon British troops, would get him killed. Better for his people if he ditched the weapon and used his peaceful methods to get the British to withdraw from India.

    If you believe that the subject can change the outcomes of a choice or trade with his mind, which is what subjectivism states, then you have no criteria to assess "success" or "failure".

    I don't believe that at all. What I believe is that trading is done by individuals whose values and desires are inextricably subjective. This does not rule out or invalidate Objectivism -- it just reflects reality. It is possible to be an Objectivist and still recognize that one's desires are subjective. One Objectivist might prefer to date Asian women, another one might prefer to date Caucasian women, another might want to date other men. None is wrong in wanting what turns them on.

  • ||

    So you are saying you can commit suicide equally well with a glass of water as you can with a glass of poison?

    If trying to drown yourself with a glass of water fails, and you ten seconds later have the epiphany that you in fact want to live, the glass of water has been more valuable to you than drinking a glass of poison and, as you are dying, realizing that you in fact want to live but are totally hosed.

    And, if you do want to die, and you hook up a convoluted method to drown yourself with that tiny amount of water, that might be a somewhat less agonizing way of dying than using some poisons.

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