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This is not the greatest example. Picasso just made $999k, but it came from somebody else. There was no value creation there as a whole. In Monopoly I can sell
by rtpg 9y ago
This is not the greatest example. Picasso just made $999k, but it came from somebody else. There was no value creation there as a whole. In Monopoly I can sell a thing for more than I bought it too!
Perhaps a better example is that a farm increases in value as the techniques and technology for growing increases. Ultimately the extra value comes from somewhere, everything else is just redistribution.
- vixen99 9y agoOf course a painting can be value creation. Aesthetic value is as real as food value or any other desirable in the eyes of ourselves or others. Ultimately, value comes from our local star which blasts us with a massive amount of energy every day. The rest is redistribution if you like. In other words it provides the conditions whereby we get up in the morning and expend energy doing something someone finds of value. Along the chain, someone worked harder and innovatively such that someone else could satisfy the desire to own that painting whether for the value they themselves could see in it or for the value others will see in it in the future (investment).
- rtpg 9y agoIf I grow more food, I have more stuff. If I paint a painting, I do not have more stuff. Someone else might be more willing to trade my paint for more of their stuff. But in an econonmy where there are only $20 for the paint, Picasso won't be getting a million no matter how hard he paints. The money simply isn't there! Reality is complicated, but if you're looking for a simple example of creating value in a "closed economy", art is not intuitively right
- WalterBright 9y agoIt is a good example. The creation of value, such as a painting, increases the total value of goods and services in the economy. It most certainly is creation.