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So if I have some wood, and I create a chair out of it, would you would say that nothing of value was created? Previously we had some lumber worth $10 and now

So if I have some wood, and I create a chair out of it, would you would say that nothing of value was created? Previously we had some lumber worth $10 and now we have a chair worth $250 dollars. Where did the $240 dollars come from? Was it stolen from somebody else?

notpachet 3y ago
Where did the wood come from? Where did the calories you used to make the chair come from? Where did your tools come from? Who trained you? Who owns the property where your workshop is located? How much marketing effort did you have to spend convincing another human that the chair is actually worth $250? What potentially carcinogenic chemicals did you treat the wood with, and how much grant money is your government giving to doctors to treat the consequences of those carcinogens in the larger population? All of those factors have hidden externalities baked into them that erode the net value you're creating. My argument is that it's all just a shell game where we're passing costs down the line to future generations while telling ourselves we're creating something valuable from nothing because it's what we need to do to sleep at night. We just don't perceive the longer-term externalities in a lot of cases.
- Negitivefrags 3y ago
  I'm not going to claim that all externalities are priced. There is certainly a lot more that we could do. But many of them are. The cost of the calories, the tools, the training, the property, and the marketing are certainly all priced. But let's just say that you priced all of the externalities perfectly. In this hypothetical example, can you really make an argument that all of that adds up to more than, say, 100 dollars? And if you can't, then you still have a lot of "value" to account for.
  - notpachet 3y ago
    If all the externalities are perfectly priced at $100, then that's the value of the chair. At that point the extra $150 you manage to get out of the buyer is just grift, not extra value produced from thin air.

notpachet 3y ago

Where did the wood come from? Where did the calories you used to make the chair come from? Where did your tools come from? Who trained you? Who owns the property where your workshop is located? How much marketing effort did you have to spend convincing another human that the chair is actually worth $250? What potentially carcinogenic chemicals did you treat the wood with, and how much grant money is your government giving to doctors to treat the consequences of those carcinogens in the larger population? All of those factors have hidden externalities baked into them that erode the net value you're creating. My argument is that it's all just a shell game where we're passing costs down the line to future generations while telling ourselves we're creating something valuable from nothing because it's what we need to do to sleep at night. We just don't perceive the longer-term externalities in a lot of cases.

Negitivefrags 3y ago
I'm not going to claim that all externalities are priced. There is certainly a lot more that we could do. But many of them are. The cost of the calories, the tools, the training, the property, and the marketing are certainly all priced. But let's just say that you priced all of the externalities perfectly. In this hypothetical example, can you really make an argument that all of that adds up to more than, say, 100 dollars? And if you can't, then you still have a lot of "value" to account for.
- notpachet 3y ago
  If all the externalities are perfectly priced at $100, then that's the value of the chair. At that point the extra $150 you manage to get out of the buyer is just grift, not extra value produced from thin air.