4 ms·

When a bomb destroys a building, to whom is the value of the building redistributed to?

by jellicle 10y ago

JBReefer 10y ago
Moloch
misja111 10y ago
To the building company that will rebuild it.
- wiz21c 10y ago
  hence to the people working for that company
- jellicle 10y ago
  Oh, so the rebuilding is done for free, funded by the value of the original building? No. The rebuilding requires additional work/money inputs to create the new building. The value of the original building is lost forever.
  - RobertoG 10y ago
    "The value of the original building is lost forever." Of course, but if you are a building company, why would you care about that?. There is this idea, that, in a society with very little scarcity, would be almost impossible to make a profit. Your only chance would be to burn everything and start again. I really hope that theory is false.
    - njharman 10y ago
      Why? What is so great about profit? I would be very glad to give up profit for no scarcity.
      - jacobush 10y ago
        The ferengi is weak in this one.
        gm-conspiracy 10y ago
        Sorry, I cannot resist adding a reference to gold-pressed latinum.
  - logfromblammo 10y ago
    The resources and energy invested in creating the building are lost forever. The value of the building was never intrinsic to the arrangement of its bricks, but to the desires of its tenants. If all of them died when the building was destroyed, most of the value of the building is indeed lost. The crater still inherits the unrealized potential value of an expansion or remodel of the old building, from those people who were not tenants of the original building, who possibly might have wanted to occupy building space in the place where it stood, yet were somehow unable to do so. Perhaps the old building was full, or didn't have enough contiguous floor space left, or the space available was too expensive, or installing network fiber was not economical. Otherwise, if all the tenants survived and continue to have a desire to occupy building space, the value attributable to them is likely to pass mostly to other buildings in the area, as they seek to relocate. They can also impart potential value to the crater, if they wouldn't mind occupying a new building in the same spot where their old one blew up. Once the potential value of rebuilding in the crater is estimated to exceed the market value of the construction inputs, someone will make the necessary investment and capture the difference by constructing a new building. Value is only limited by the bounds of human desires. The economy only produces a finite quantity of resources and energy per unit of time, though. Whatever is spent on rebuilding in a crater cannot also be spent on new building in a fresh development site, or on building a luxury yacht, or on programming a machine to make a different kind of "ping" noise, or on making all new Taco Bell menu items from the same old ingredients. The value per thing ratio is continuously recalculated, and market prices eventually follow. So when you blow up a building, and don't kill all the people who gave it its value (or at least diminish their desire to consume in relation to their willingness to produce), that excess unmet desire redistributes to everything else in the economy. You're making most things imperceptibly more expensive, and a few things noticeably more expensive, such as the cost of occupying the nearby vacant building space. Flows of resources are easy to calculate, but change in value is nearly impossible to predict.
mtanski 10y ago
Skanska? But in all seriousness I would look at multi-national companies and industries "selling shovels" that benefit for rebuilding both sides of war.
- VMG 10y ago
  Contrast the sale of a car to the sale of a bomb: in the first case, both parties are clearly better off. In the second case, some people would argue that the commons is better off by funding a public good (national defense). If the sold weaponry is not increasing security for the public, or even decreasing it, wealth is destroyed. It's like buying a car and burning it on the spot.
RobertoG 10y ago
To the owners of the other buildings, I suppose, they own a more scarce good now. Also, capital destruction give a chance for building again, and it's building again that you can extract value and make a profit.
- philh 10y ago
  At most a portion of the value of the building has been redistributed. Some of it has just plain been destroyed. Also, capital in its undestroyed form can typically be used to extract value and make a profit. If that weren't true, there'd be little value and profit in building it in the first place. For example, a building can be used to provide people warmth and shelter in exchange for money. That's why the owner desires to own it, and that's why the owner (or someone down the chain) is willing to pay other people to build it.
mason240 10y ago
It's troubling that this has to actually be explained.

When a bomb destroys a building, to whom is the value of the building redistributed to?

JBReefer 10y ago

Moloch

misja111 10y ago

To the building company that will rebuild it.

wiz21c 10y ago
hence to the people working for that company
jellicle 10y ago
Oh, so the rebuilding is done for free, funded by the value of the original building? No. The rebuilding requires additional work/money inputs to create the new building. The value of the original building is lost forever.
- RobertoG 10y ago
  "The value of the original building is lost forever." Of course, but if you are a building company, why would you care about that?. There is this idea, that, in a society with very little scarcity, would be almost impossible to make a profit. Your only chance would be to burn everything and start again. I really hope that theory is false.
  - njharman 10y ago
    Why? What is so great about profit? I would be very glad to give up profit for no scarcity.
    - jacobush 10y ago
      The ferengi is weak in this one.
      - gm-conspiracy 10y ago
        Sorry, I cannot resist adding a reference to gold-pressed latinum.
- logfromblammo 10y ago
  The resources and energy invested in creating the building are lost forever. The value of the building was never intrinsic to the arrangement of its bricks, but to the desires of its tenants. If all of them died when the building was destroyed, most of the value of the building is indeed lost. The crater still inherits the unrealized potential value of an expansion or remodel of the old building, from those people who were not tenants of the original building, who possibly might have wanted to occupy building space in the place where it stood, yet were somehow unable to do so. Perhaps the old building was full, or didn't have enough contiguous floor space left, or the space available was too expensive, or installing network fiber was not economical. Otherwise, if all the tenants survived and continue to have a desire to occupy building space, the value attributable to them is likely to pass mostly to other buildings in the area, as they seek to relocate. They can also impart potential value to the crater, if they wouldn't mind occupying a new building in the same spot where their old one blew up. Once the potential value of rebuilding in the crater is estimated to exceed the market value of the construction inputs, someone will make the necessary investment and capture the difference by constructing a new building. Value is only limited by the bounds of human desires. The economy only produces a finite quantity of resources and energy per unit of time, though. Whatever is spent on rebuilding in a crater cannot also be spent on new building in a fresh development site, or on building a luxury yacht, or on programming a machine to make a different kind of "ping" noise, or on making all new Taco Bell menu items from the same old ingredients. The value per thing ratio is continuously recalculated, and market prices eventually follow. So when you blow up a building, and don't kill all the people who gave it its value (or at least diminish their desire to consume in relation to their willingness to produce), that excess unmet desire redistributes to everything else in the economy. You're making most things imperceptibly more expensive, and a few things noticeably more expensive, such as the cost of occupying the nearby vacant building space. Flows of resources are easy to calculate, but change in value is nearly impossible to predict.

mtanski 10y ago

Skanska? But in all seriousness I would look at multi-national companies and industries "selling shovels" that benefit for rebuilding both sides of war.

VMG 10y ago
Contrast the sale of a car to the sale of a bomb: in the first case, both parties are clearly better off. In the second case, some people would argue that the commons is better off by funding a public good (national defense). If the sold weaponry is not increasing security for the public, or even decreasing it, wealth is destroyed. It's like buying a car and burning it on the spot.

RobertoG 10y ago

To the owners of the other buildings, I suppose, they own a more scarce good now. Also, capital destruction give a chance for building again, and it's building again that you can extract value and make a profit.

philh 10y ago
At most a portion of the value of the building has been redistributed. Some of it has just plain been destroyed. Also, capital in its undestroyed form can typically be used to extract value and make a profit. If that weren't true, there'd be little value and profit in building it in the first place. For example, a building can be used to provide people warmth and shelter in exchange for money. That's why the owner desires to own it, and that's why the owner (or someone down the chain) is willing to pay other people to build it.

mason240 10y ago

It's troubling that this has to actually be explained.