4 ms·

Ain't no "what if" about it son. Every economic transaction between two parties benefits the seller slightly more than the buyer; that is the definition of pro

by rdiddly 10y ago

Ain't no "what if" about it son. Every economic transaction between two parties benefits the seller slightly more than the buyer; that is the definition of profit. Sure, the buyer is getting whatever good or service they paid for, but they are ordinarily paying slightly more than it's absolutely worth. If that element isn't present (i.e. if the transaction does not incrementally impoverish the buyer and enrich the seller by some amount), the seller won't continue to sell that good or service. Edit: except non-profits, subsidies, and Uber

WalterBright 10y ago
The buyer and seller both profit, or they would not engage in the trade. Each has something the other needs more than they do.
- rdiddly 10y ago
  I agree and I acknowledged this ("the buyer is getting whatever good or service they paid for"). But I still tend to frame it as the buyer having incurred a cost, not having profited. The seller is the one who ends up with money in hand, that can be invested elsewhere. The buyer usually ends up with something that either starts off with no resale value, or that depreciates, or that (if you're poor) does nothing but keep you alive -- like a roof over your head let's say. Mind you, since that last category consists of things one really needs a lot, it makes one that much more eager to engage in the trade and pay the stated price. If you can afford to walk away from a negotiation, your position is a lot stronger.
  - WalterBright 10y ago
    Consider the farmer and the blacksmith. The farmer makes more corn than he can eat, and the blacksmith shoes the horses. The blacksmith trades shoeing the farmer's horse for corn to eat. They are both better off. There is no buyer/seller. Money is just a medium for making trading more efficient. A "buyer" and "seller" is an artificial construct, and framing things as the "seller" always gets the upper hand has no real basis. I buy things and sell things all the time. It's pretty clear that the seller has no inherent advantage.
    - rdiddly 10y ago
      In barter there is no seller's advantage because yeah, there's no seller. In a monetary transaction, there is, because one party ends up with money, which is more than just a medium of exchange - it's capital. You can easily rent it out and get back not only your money, but a bit extra. You could do that with corn, too, but you would have to set up the arrangement yourself, whereas the mechanisms already exist to do that with cash.
      - WalterBright 10y ago
        It is just a medium of exchange. It's all money is. I doubt I'll convince you with rhetoric, so I suggest you try doing a little selling. The experience should be pretty convincing that it doesn't give you any advantage.
        rdiddly 10y ago
        Well this is funny. Believe it or not, my attempts to sell something nobody wanted are actually the very thing that made me think the way I do. I had something I couldn't find a buyer for -- something specific with only as much value as any buyer would care to assign. But my potential customers had something everybody wants including me -- a medium of exchange as you say, that can be easily converted into anything else. Selling is harder than buying because what you're asking for (people's money) is more flexible and reliably worth something to a greater number of people. If you find a market, a bunch of people who want what you've got, more than they want money, you've scored a coup!
- ue_ 10y ago
  The buyer of labour-time pays wholly for the labour value provided, but the worker in turn provides surplus labour which the capitalist collects as value. The worker is paid for the the time that the capitalist has purchased, not the surplus. The worker does not "profit" from this; the worker must work in order to survive.
  - WalterBright 10y ago
    The worker sells his labor for profit because the money is worth more to him than his labor.
    - ue_ 10y ago
      If you are forced to do something in order to survive, would you say this is profitable? The worker must sell his labour time in order to survive. If this is how profit is defined, then so be it - but it is a very strange way of "profit" if your profit is that you get to live. This also does not address the surplus labour issue, in which the worker is not and within capitalism cannot be compensated for the additional labour, for if he was then the capitalist, even in a system of equal exchanges between the capitalist and the buyer, would not be able to make profit.
      - WalterBright 10y ago
        The blacksmith cannot eat iron, and the farmer cannot grow corn to eat unless his horses are shod. Does that make their trade of extra corn for horseshoes unprofitable for both of them?
jdietrich 10y ago
If the transaction didn't also benefit the buyer, they wouldn't voluntarily enter into it. If I have a dollar but would rather have a soda, buying the soda makes me slightly better off. I might prefer a free soda, but I'd still rather have the soda than the dollar. If I perceived the soda as being worth less than a buck, I would have kept the money. There are a million other things I could have done with my dollar, but I chose to exchange it for a soda; that simple choice reflects a profound truth about the market. Nothing is "absolutely worth" anything. The same bottle of soda is worth 25 cents at Costco and $4 at a ball game. It's up to the customer to decide whether the product is worth the price it's being sold for.
- rdiddly 10y ago
  See my reply to WalterBright below. The transaction absolutely does benefit the buyer. But it benefits the seller more. What you're left with (a soda), you consume and it's gone. What the seller is left with, he can invest (essentially renting it out) and turn into more money. Something good I could say about the soda is that it's 200 calories that keeps you alive a couple hours longer, and you have a chance to make some money in that time. So it might be a good investment. It's not black & white. Or a car (a cost you incur) that enables you to commute to a job you couldn't otherwise reach, that kind of thing comes close to an even benefit. Edit to clarify: What I'm thinking of as the "absolute worth" of a good or service, is basically, "exactly the cost of providing it." If you provide everything "at cost" then you are making zero profit. Agreed that market price/supply/demand/etc. may dictate that you make more (or less) than that.
greenhatman 10y ago
It really depends on who's more desperate for the sale to happen. And it can be either side. For the most part, both sides gain. In extreme cases someone can feel forced by circumstances to either sell or buy.

by rdiddly 10y ago

WalterBright 10y ago

The buyer and seller both profit, or they would not engage in the trade. Each has something the other needs more than they do.

rdiddly 10y ago
I agree and I acknowledged this ("the buyer is getting whatever good or service they paid for"). But I still tend to frame it as the buyer having incurred a cost, not having profited. The seller is the one who ends up with money in hand, that can be invested elsewhere. The buyer usually ends up with something that either starts off with no resale value, or that depreciates, or that (if you're poor) does nothing but keep you alive -- like a roof over your head let's say. Mind you, since that last category consists of things one really needs a lot, it makes one that much more eager to engage in the trade and pay the stated price. If you can afford to walk away from a negotiation, your position is a lot stronger.
- WalterBright 10y ago
  Consider the farmer and the blacksmith. The farmer makes more corn than he can eat, and the blacksmith shoes the horses. The blacksmith trades shoeing the farmer's horse for corn to eat. They are both better off. There is no buyer/seller. Money is just a medium for making trading more efficient. A "buyer" and "seller" is an artificial construct, and framing things as the "seller" always gets the upper hand has no real basis. I buy things and sell things all the time. It's pretty clear that the seller has no inherent advantage.
  - rdiddly 10y ago
    In barter there is no seller's advantage because yeah, there's no seller. In a monetary transaction, there is, because one party ends up with money, which is more than just a medium of exchange - it's capital. You can easily rent it out and get back not only your money, but a bit extra. You could do that with corn, too, but you would have to set up the arrangement yourself, whereas the mechanisms already exist to do that with cash.
    - WalterBright 10y ago
      It is just a medium of exchange. It's all money is. I doubt I'll convince you with rhetoric, so I suggest you try doing a little selling. The experience should be pretty convincing that it doesn't give you any advantage.
      - rdiddly 10y ago
        Well this is funny. Believe it or not, my attempts to sell something nobody wanted are actually the very thing that made me think the way I do. I had something I couldn't find a buyer for -- something specific with only as much value as any buyer would care to assign. But my potential customers had something everybody wants including me -- a medium of exchange as you say, that can be easily converted into anything else. Selling is harder than buying because what you're asking for (people's money) is more flexible and reliably worth something to a greater number of people. If you find a market, a bunch of people who want what you've got, more than they want money, you've scored a coup!
ue_ 10y ago
The buyer of labour-time pays wholly for the labour value provided, but the worker in turn provides surplus labour which the capitalist collects as value. The worker is paid for the the time that the capitalist has purchased, not the surplus. The worker does not "profit" from this; the worker must work in order to survive.
- WalterBright 10y ago
  The worker sells his labor for profit because the money is worth more to him than his labor.
  - ue_ 10y ago
    If you are forced to do something in order to survive, would you say this is profitable? The worker must sell his labour time in order to survive. If this is how profit is defined, then so be it - but it is a very strange way of "profit" if your profit is that you get to live. This also does not address the surplus labour issue, in which the worker is not and within capitalism cannot be compensated for the additional labour, for if he was then the capitalist, even in a system of equal exchanges between the capitalist and the buyer, would not be able to make profit.
    - WalterBright 10y ago
      The blacksmith cannot eat iron, and the farmer cannot grow corn to eat unless his horses are shod. Does that make their trade of extra corn for horseshoes unprofitable for both of them?

jdietrich 10y ago

If the transaction didn't also benefit the buyer, they wouldn't voluntarily enter into it. If I have a dollar but would rather have a soda, buying the soda makes me slightly better off. I might prefer a free soda, but I'd still rather have the soda than the dollar. If I perceived the soda as being worth less than a buck, I would have kept the money. There are a million other things I could have done with my dollar, but I chose to exchange it for a soda; that simple choice reflects a profound truth about the market. Nothing is "absolutely worth" anything. The same bottle of soda is worth 25 cents at Costco and $4 at a ball game. It's up to the customer to decide whether the product is worth the price it's being sold for.

rdiddly 10y ago
See my reply to WalterBright below. The transaction absolutely does benefit the buyer. But it benefits the seller more. What you're left with (a soda), you consume and it's gone. What the seller is left with, he can invest (essentially renting it out) and turn into more money. Something good I could say about the soda is that it's 200 calories that keeps you alive a couple hours longer, and you have a chance to make some money in that time. So it might be a good investment. It's not black & white. Or a car (a cost you incur) that enables you to commute to a job you couldn't otherwise reach, that kind of thing comes close to an even benefit. Edit to clarify: What I'm thinking of as the "absolute worth" of a good or service, is basically, "exactly the cost of providing it." If you provide everything "at cost" then you are making zero profit. Agreed that market price/supply/demand/etc. may dictate that you make more (or less) than that.

greenhatman 10y ago

It really depends on who's more desperate for the sale to happen. And it can be either side. For the most part, both sides gain. In extreme cases someone can feel forced by circumstances to either sell or buy.