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"...but it's going to be tough renting out the station or selling it for how much it's actually worth." Sigh. In monetary terms, it would be precisely worth a

"...but it's going to be tough renting out the station or selling it for how much it's actually worth." Sigh. In monetary terms, it would be precisely worth as much as the price at which it clears the market[1]. The idea that somehow the value of the space station has a monetary value that isn't tied to the price at which the market clears is incorrect. Remember... the cost of station is not what it is worth, that's simply the cost. [1] Yes, there can be fraud or disparities of information between the parties in the transaction that can cause the selling price to not be properly reflective of the worth of the property in exchange. But the overall tendency of market pricing is to draw the monetary price to the value of the property.... and in my experience the exact opposite of the article's point tends to be true... the seller almost always knows more about the property sold than the buyer, thus the buyer is more likely to overpay for the property rather than the seller getting too little.

stouset 10y ago
While this is almost tautologically true for many things (guns, butter), I'm not convinced it holds for everything. The market doesn't value everything optimally, especially when you consider present vs. future value. The market has done a terrible job of pricing in the future costs of climate change, for instance. It's improving, but slowly and (seemingly only) with significant intervention (for instance, carbon credits). Is the market going to properly value future scientific gains from ongoing operation of the ISS? Would the market have paid for the LHC? For NASA, 50 years ago? Even if you believe the ongoing science collected is of minimal value, what about the effects of inspiration for kids to enter STEM fields? I'm not saying the ISS is worth it. I'm only saying I don't believe your thesis that "market value" is fundamentally equal to "value to society". It may be a good approximation in many, or even the majority of cases. But acting like it's the only correct way to value something is, I think, foolish. One of the benefits of government is to get everyone to chip into large-scale projects that (hopefully) benefit all, but are difficult to monetize. A network of roadways, research into science and medicine, and general education all come to mind.
- panic 10y ago
  A network of roadways, research into science and medicine, and general education all come to mind. Not to mention the programmable electronic computers and open internet without which we couldn't even be having this discussion!
  - panic 10y ago
    If you want to learn more about the history here, check out The Dream Machine by M. Mitchell Waldrop.
- hackuser 10y ago
  > The market doesn't value everything optimally Examples: My time, the skills of guys who chase balls around in sneakers, the skills of scientists who develop the Theory of Relativity, the Theory itself, my child's education, or my child.
  - adventured 10y ago
    > the skills of guys who chase balls around in sneakers That's a poor example and you're wrong. A very, very, very large, consistent, long duration market says that they're worth a lot. Quality entertainment can be worth a vast amount of money, and it has a very real/tangible value to it. Whether you personally think a specific entertainment is quality is purely subjective. What's not remotely that subjective, is the scale of the market, its historical record, and the reasonable future forecasts for its business prospects.
    - hackuser 10y ago
      > A very, very, very large, consistent, long duration market says that they're worth a lot I agree with that. My point and the point of the GP is that the market isn't good at valuing some things. The 'market' is just a tool, a technology, not a God or scripture. Any tool works well for some tasks and less well for others. Also, the concept 'free market' is a theoretical abstraction that doesn't exist in reality; the NBA, for example, operates a monopoly in a market distorted heavily by law, regulations, a collective bargaining agreement, and market power. As someone said, Theory is a useful servant but a bad master, liable to produce orthodox defenders of every variety of the faith.[1] [1] Harry Guntrip, as far as I know
feral 10y ago
Oscar Wilde: "A cynic is a man who knows the price of everything but the value of nothing." > the cost of station is not what it is worth, that's simply the cost. Yeah, but isn't it also wrong to say that the price is simply what it's worth? Maybe a lot of the value is scientific, and maybe difficult to capture. If corporations can't extract this value, maybe they won't be able to justify the running costs, the auction will flop and it will be de-orbited; but doesn't mean the value doesn't exist. Maybe the item is so large and so rare the market won't clear efficiently - maybe investment is too risky, the worst case future costs too high - there's a limited supply of capital willing to take such high risks; insurance has its limits etc. You did say: "In monetary terms" - maybe you were moving the goalposts there; but if so, that's you, not the original article.
hulpult 10y ago
> Sigh. In monetary terms, it would be precisely worth as much as the price at which it clears the market[1]. The idea that somehow the value of the space station has a monetary value that isn't tied to the price at which the market clears is incorrect. Oh look, you know econ101 and think you are smart. The worth/value of an object != its price. There is a reason different words are used, you might have figured this out if you actually read some econ books.
philipov 10y ago
There is no market for space stations. Market pricing only works when assets are fungible and their sale can be abstracted into a statistical model. A sample size of 1 is not enough to establish an efficient pricing model for an asset, and space stations are not fungible. The ISS is literally priceless.

stouset 10y ago

While this is almost tautologically true for many things (guns, butter), I'm not convinced it holds for everything. The market doesn't value everything optimally, especially when you consider present vs. future value. The market has done a terrible job of pricing in the future costs of climate change, for instance. It's improving, but slowly and (seemingly only) with significant intervention (for instance, carbon credits). Is the market going to properly value future scientific gains from ongoing operation of the ISS? Would the market have paid for the LHC? For NASA, 50 years ago? Even if you believe the ongoing science collected is of minimal value, what about the effects of inspiration for kids to enter STEM fields? I'm not saying the ISS is worth it. I'm only saying I don't believe your thesis that "market value" is fundamentally equal to "value to society". It may be a good approximation in many, or even the majority of cases. But acting like it's the only correct way to value something is, I think, foolish. One of the benefits of government is to get everyone to chip into large-scale projects that (hopefully) benefit all, but are difficult to monetize. A network of roadways, research into science and medicine, and general education all come to mind.

panic 10y ago
A network of roadways, research into science and medicine, and general education all come to mind. Not to mention the programmable electronic computers and open internet without which we couldn't even be having this discussion!
- panic 10y ago
  If you want to learn more about the history here, check out The Dream Machine by M. Mitchell Waldrop.
hackuser 10y ago
> The market doesn't value everything optimally Examples: My time, the skills of guys who chase balls around in sneakers, the skills of scientists who develop the Theory of Relativity, the Theory itself, my child's education, or my child.
- adventured 10y ago
  > the skills of guys who chase balls around in sneakers That's a poor example and you're wrong. A very, very, very large, consistent, long duration market says that they're worth a lot. Quality entertainment can be worth a vast amount of money, and it has a very real/tangible value to it. Whether you personally think a specific entertainment is quality is purely subjective. What's not remotely that subjective, is the scale of the market, its historical record, and the reasonable future forecasts for its business prospects.
  - hackuser 10y ago
    > A very, very, very large, consistent, long duration market says that they're worth a lot I agree with that. My point and the point of the GP is that the market isn't good at valuing some things. The 'market' is just a tool, a technology, not a God or scripture. Any tool works well for some tasks and less well for others. Also, the concept 'free market' is a theoretical abstraction that doesn't exist in reality; the NBA, for example, operates a monopoly in a market distorted heavily by law, regulations, a collective bargaining agreement, and market power. As someone said, Theory is a useful servant but a bad master, liable to produce orthodox defenders of every variety of the faith.[1] [1] Harry Guntrip, as far as I know

feral 10y ago

Oscar Wilde: "A cynic is a man who knows the price of everything but the value of nothing." > the cost of station is not what it is worth, that's simply the cost. Yeah, but isn't it also wrong to say that the price is simply what it's worth? Maybe a lot of the value is scientific, and maybe difficult to capture. If corporations can't extract this value, maybe they won't be able to justify the running costs, the auction will flop and it will be de-orbited; but doesn't mean the value doesn't exist. Maybe the item is so large and so rare the market won't clear efficiently - maybe investment is too risky, the worst case future costs too high - there's a limited supply of capital willing to take such high risks; insurance has its limits etc. You did say: "In monetary terms" - maybe you were moving the goalposts there; but if so, that's you, not the original article.

hulpult 10y ago

> Sigh. In monetary terms, it would be precisely worth as much as the price at which it clears the market[1]. The idea that somehow the value of the space station has a monetary value that isn't tied to the price at which the market clears is incorrect. Oh look, you know econ101 and think you are smart. The worth/value of an object != its price. There is a reason different words are used, you might have figured this out if you actually read some econ books.

philipov 10y ago

There is no market for space stations. Market pricing only works when assets are fungible and their sale can be abstracted into a statistical model. A sample size of 1 is not enough to establish an efficient pricing model for an asset, and space stations are not fungible. The ISS is literally priceless.