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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 optimal

by 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
- nradov 10y ago
  Yes due to salary caps which distort the free market, NBA stars are underpaid. http://fivethirtyeight.com/features/kawhi-leonard-like-all-the-best-nba-players-is-vastly-underpaid/ http://fivethirtyeight.com/features/kawhi-leonard-like-all-t...
icebraining 10y ago
People who don't jibe with deifying the market shouldn't themselves talk about "The Market" as if it was some kind of natural force. The market, ie, people individually and in groups buying stuff, value stuff according to the goals of those buyers. Saying that the market as done a terrible job of pricing in the future costs of climate change to society makes no sense; it was never supposed to!
- stuaxo 10y ago
  Silly to say the market is natural when it is something we have made that exists within the rules we decide.
  - nilved 10y ago
    No it isn't. A market is just a collection of actors who perform transactions within the group. The only rules set are the ones by nature, and markets would exist with or without humans.
    - adamisom 10y ago
      You're talking about markets in a different sense. You're talking about the 'force-of-nature' market: the stark fact that positive-sum transactions can be made. stuaxos is talking about markets in situ, or reality. And in that sense of markets, there is no "free" market in the entire world. As Ha-Joon Chang points out, immigration control has a far bigger effect on wages than minimum wage, and if we (I'm in the USA) had a maximally free market we would also have open borders. There are many ways that "free" markets are not socially desirable.
randyrand 10y ago
> I don't believe your thesis that "market value" is fundamentally equal to "value to society" Which is why he never said that. Hes says market value is equal to what it is worth. The value to society also depends on how much society is worth. They are completely unrelated concepts.
- Dylan16807 10y ago
  I completely disagree. "Worth" should be market value plus external value to society.
  - deleted 10y ago
    [deleted]

by stouset 10y ago

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
nradov 10y ago
Yes due to salary caps which distort the free market, NBA stars are underpaid. http://fivethirtyeight.com/features/kawhi-leonard-like-all-the-best-nba-players-is-vastly-underpaid/ http://fivethirtyeight.com/features/kawhi-leonard-like-all-t...

icebraining 10y ago

People who don't jibe with deifying the market shouldn't themselves talk about "The Market" as if it was some kind of natural force. The market, ie, people individually and in groups buying stuff, value stuff according to the goals of those buyers. Saying that the market as done a terrible job of pricing in the future costs of climate change to society makes no sense; it was never supposed to!

stuaxo 10y ago
Silly to say the market is natural when it is something we have made that exists within the rules we decide.
- nilved 10y ago
  No it isn't. A market is just a collection of actors who perform transactions within the group. The only rules set are the ones by nature, and markets would exist with or without humans.
  - adamisom 10y ago
    You're talking about markets in a different sense. You're talking about the 'force-of-nature' market: the stark fact that positive-sum transactions can be made. stuaxos is talking about markets in situ, or reality. And in that sense of markets, there is no "free" market in the entire world. As Ha-Joon Chang points out, immigration control has a far bigger effect on wages than minimum wage, and if we (I'm in the USA) had a maximally free market we would also have open borders. There are many ways that "free" markets are not socially desirable.

randyrand 10y ago

> I don't believe your thesis that "market value" is fundamentally equal to "value to society" Which is why he never said that. Hes says market value is equal to what it is worth. The value to society also depends on how much society is worth. They are completely unrelated concepts.

Dylan16807 10y ago
I completely disagree. "Worth" should be market value plus external value to society.
- deleted 10y ago
  [deleted]