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You can actually "reduce" any expense entirely to several things if you think reductionistically enough: energy costs, material scarcity, etc. Labor is one pos
by lazzlazzlazz 6y ago
You can actually "reduce" any expense entirely to several things if you think reductionistically enough: energy costs, material scarcity, etc.
Labor is one possible resource bottleneck, and because it can be intuitively converted into most other resources with some imagination, it is often mistaken as transcending other resources.
Labor Theory of Value has been broadly discredited for this reason among many others.
- kdtsh 6y agoEach of those things ultimately reduce to human labour though. Energy because it requires human labour to produce; material scarcity because of the human labour required to extract certain rare materials. It’s very easy to say that this is mental gymnastics, but do you honestly disagree and think that these disparate things are categories into themselves? - how can we then determine the relative value of things, it becomes a matter of comparing apples and oranges. You can look at the utility of some commodity, but that will only ultimately tell us what a person will pay for it, and value does not always correlate to cost.
- lazzlazzlazz 6y agoYes, we can reduce energy needs to human labor; we can also reduce human labor to energy needs. I invite you to try out the exercise. Since both are substitutes for one another to a significant degree much of the time, it's easy to get trapped into the thinking that they're always substitutes. The reality is that despite their fungibility, you tend to reach the limits at an extreme (think like a Cobb-Douglas function). And yes, the disjunction between market value and cost is well-known. They only converge under certain market assumptions, an interesting subject of study in itself.