>If Alice values potatoes at 1.01 apples and Bob values apples at 1.01 potatoes, and they trade, maybe they've created 0.01 apples worth of value but they certa

>If Alice values potatoes at 1.01 apples and Bob values apples at 1.01 potatoes, and they trade, maybe they've created 0.01 apples worth of value but they certainly have not created two, they started with two and ended with approximately two. I believe this to be incorrect. For instance, let's say that Alice runs a hamburger stand, and wants potatoes to sell alongside her burgers. Conversely, perhaps Bob makes apple pies which he then sells. In a situation like this, they both would value (the verb) the other food more than the one they had, which would cause them to enact the trade - they are increasing their wealth by doing so. (This leads to a whole additional conversation about wealth, but I'm trying to keep it short here.) The reason they would value it more is because they could create more value from the other's food. Bob can sell an apple pie for perhaps 10 bucks, of which most is profit. He cannot do anything with a potato, so the value of a potato is significantly less. Likewise, Alice might be able to sell one potato's worth of french fries for $5, generating a significant profit, and thereby creating value.