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Exactly. For anyone wondering why "labor theory of value" is flawed, the currently accepted theory is "supply and demand". I found it very interesting that thi

Exactly. For anyone wondering why "labor theory of value" is flawed, the currently accepted theory is "supply and demand". I found it very interesting that this was not widely understood during the times of Marx and is a relatively young insight.

ZeroGravitas 10y ago
And one that still most people reject. See for example the reactions to "surge pricing" from Uber. Standard economic theory suggests that by letting prices rise (or indeed fall), supply will adjust to match demand and overall utility will be increased. But paying more for a cab when lots of people want to use the available cabs strikes people as unfair. As a nerdy fan of economics, I believe the underlying problem is inequality which humans are apparently very sensitive to and surge pricing makes it explicity that rich people are getting the benefit. If there was less inequality then it could be reframed as "the people who really value a cab ride right now".
- bad_user 10y ago
  I don't think giving Uber at this point as proof of anything is OK. In my city Uber has inflated prices almost all the time, except for maybe after 22:00 at night. And it seems unfair for one because they don't provide a good mental model of what's going on. If the standard pricing is never available between 7 and 22, then the standard pricing is a hoax. In fact, the standard pricing shouldn't be available at rush hours, because daily rush hours are normal. I can understand rainy, snowy or foggy conditions making traffic difficult, or upcoming holidays, but your regular Tuesday should not have surged prices at 9 o'clock in an area that's not the most crowded part of the city, because then the standard pricing is a hoax. Also, people that think Uber's pricing is unfair do so because taxis with much lower and stable prices still exist, even at rush hour. They even have apps now. And many cities have a working public transport system as well. As for supply and demand, you have to remember that Uber is not a free market, because the drivers are not the ones that can set pricing ;-) This is why I stopped using Uber, because they'll be very dangerous if they'll ever have monopoly. Now I'm using a local app for cabs (CleverTaxi in Romania, for those interested) and Taxify, which is like this European-made alternative from Estonia. They have the same surge pricing model, but are being more conservative in applying it for now.
- marssaxman 10y ago
  I argue against tolling as a means of traffic congestion management from the same motivation: I don't actually care how rational it might be, I just can't stomach the idea of creating more opportunities for rich people to buy their way out of hassles the rest of us will continue to be stuck with. Emotionally, I'd rather we just left the highways un-tolled and congested, so at least we all suffer equally.
  - snrplfth 10y ago
    The rich just move closer to work, then. Oh hello, San Francisco.
    - marssaxman 10y ago
      Sure, that's the whole point of being rich: they already have lots of options. So why on earth would the rest of us want to give them any more?
      - snrplfth 10y ago
        The point is that if you try to prevent pricing of goods, you get a) pricing by other means, often more inflexible, b) underinvestment and underproduction, c) departure of the wealthy through other markets. The problem with road pricing is usually not the pricing per se, but rather, that the government bodies doing the pricing just apply the revenues to something totally unrelated, breaking the connection between services and revenue. Road pricing can work if it is actually used for maintaining and building the road network - a genuine pay-for-service model.
        marssaxman 10y ago
        Like I said, I don't actually care how rational it all might be in economic terms. I'm not willing to allow rich people to pay for more privileges than they already have, even if we might all be better off as a result. They have too many privileges already. So, exactly as ZeroGravitas was saying, it's clear that my reaction is really about inequality and not about highway congestion management. Fix the inequality problem and I'd probably start feeling more OK about tolling proposals.
RobertoG 10y ago
I'm not sure that the labour theory of value is related to "supply and demand" as you say. If I remember correctly, labour theory of value says that all value come from work, that is: you have nature, you have capital (that is work already done) and the only way to create more value is working. If after consuming the product of that new work, you have surplus, you have new capital available. How is that related to supply and demand?
- MrBuddyCasino 10y ago
  If I remember correctly (and its been a while since I've read Das Kapital), Marx tried to explain why a good costs what it costs, where its value really comes from. So he was dissecting the different parts that went into its creation only to conclude that they really weren't different parts, but that it all came down to labour in the end - basically what you said. His theory however did not explain why the value of a good fluctuates over time, like the price of bread in times of bad harvests, and I have some fuzzy memories of weird corner-case explanations to maneuver around this issue. Today we know that no matter how much human labour went into the creation of something, in the end the laws of supply and demand determine its price. I could be wrong though and thats not what Marx goal was, after all.
  - RobertoG 10y ago
    Again from memory, but I think that price and value are related but not the same thing. Prices would be determined by supply and demand, but value would be, by definition, anything added to the inputs. I think I will spend some time looking into it.

ZeroGravitas 10y ago

And one that still most people reject. See for example the reactions to "surge pricing" from Uber. Standard economic theory suggests that by letting prices rise (or indeed fall), supply will adjust to match demand and overall utility will be increased. But paying more for a cab when lots of people want to use the available cabs strikes people as unfair. As a nerdy fan of economics, I believe the underlying problem is inequality which humans are apparently very sensitive to and surge pricing makes it explicity that rich people are getting the benefit. If there was less inequality then it could be reframed as "the people who really value a cab ride right now".

bad_user 10y ago
I don't think giving Uber at this point as proof of anything is OK. In my city Uber has inflated prices almost all the time, except for maybe after 22:00 at night. And it seems unfair for one because they don't provide a good mental model of what's going on. If the standard pricing is never available between 7 and 22, then the standard pricing is a hoax. In fact, the standard pricing shouldn't be available at rush hours, because daily rush hours are normal. I can understand rainy, snowy or foggy conditions making traffic difficult, or upcoming holidays, but your regular Tuesday should not have surged prices at 9 o'clock in an area that's not the most crowded part of the city, because then the standard pricing is a hoax. Also, people that think Uber's pricing is unfair do so because taxis with much lower and stable prices still exist, even at rush hour. They even have apps now. And many cities have a working public transport system as well. As for supply and demand, you have to remember that Uber is not a free market, because the drivers are not the ones that can set pricing ;-) This is why I stopped using Uber, because they'll be very dangerous if they'll ever have monopoly. Now I'm using a local app for cabs (CleverTaxi in Romania, for those interested) and Taxify, which is like this European-made alternative from Estonia. They have the same surge pricing model, but are being more conservative in applying it for now.
marssaxman 10y ago
I argue against tolling as a means of traffic congestion management from the same motivation: I don't actually care how rational it might be, I just can't stomach the idea of creating more opportunities for rich people to buy their way out of hassles the rest of us will continue to be stuck with. Emotionally, I'd rather we just left the highways un-tolled and congested, so at least we all suffer equally.
- snrplfth 10y ago
  The rich just move closer to work, then. Oh hello, San Francisco.
  - marssaxman 10y ago
    Sure, that's the whole point of being rich: they already have lots of options. So why on earth would the rest of us want to give them any more?
    - snrplfth 10y ago
      The point is that if you try to prevent pricing of goods, you get a) pricing by other means, often more inflexible, b) underinvestment and underproduction, c) departure of the wealthy through other markets. The problem with road pricing is usually not the pricing per se, but rather, that the government bodies doing the pricing just apply the revenues to something totally unrelated, breaking the connection between services and revenue. Road pricing can work if it is actually used for maintaining and building the road network - a genuine pay-for-service model.
      - marssaxman 10y ago
        Like I said, I don't actually care how rational it all might be in economic terms. I'm not willing to allow rich people to pay for more privileges than they already have, even if we might all be better off as a result. They have too many privileges already. So, exactly as ZeroGravitas was saying, it's clear that my reaction is really about inequality and not about highway congestion management. Fix the inequality problem and I'd probably start feeling more OK about tolling proposals.

RobertoG 10y ago

I'm not sure that the labour theory of value is related to "supply and demand" as you say. If I remember correctly, labour theory of value says that all value come from work, that is: you have nature, you have capital (that is work already done) and the only way to create more value is working. If after consuming the product of that new work, you have surplus, you have new capital available. How is that related to supply and demand?

MrBuddyCasino 10y ago
If I remember correctly (and its been a while since I've read Das Kapital), Marx tried to explain why a good costs what it costs, where its value really comes from. So he was dissecting the different parts that went into its creation only to conclude that they really weren't different parts, but that it all came down to labour in the end - basically what you said. His theory however did not explain why the value of a good fluctuates over time, like the price of bread in times of bad harvests, and I have some fuzzy memories of weird corner-case explanations to maneuver around this issue. Today we know that no matter how much human labour went into the creation of something, in the end the laws of supply and demand determine its price. I could be wrong though and thats not what Marx goal was, after all.
- RobertoG 10y ago
  Again from memory, but I think that price and value are related but not the same thing. Prices would be determined by supply and demand, but value would be, by definition, anything added to the inputs. I think I will spend some time looking into it.