Bitcoin adjusts difficulty based on how many people mine it. So cheap power doesn't reduce the cost, since it will just mean even more mining.
Can't generate AI, websites, etc with the computing infrastructure.
No software patents if no computers to create software.
Whereas in cryptocurrency, that's split. The miners provide security and integrity for the chain. They also take their own very specific fee.
This is one of the most problematic statements ever made in Econ.
The 'value' of a product is different for everyone, and it's what you (or anyone else) will pay for it.
The idea that 'work = value' is one of the most distortionary ideas in business, even today.
Just had a discussion today about pricing a product, and it was derived from component prices. Trying to convince a room of people that 'price is not a function of cost' ... in 2017.
Yes - when things are commodities, often, price is a function of cost, because competitive pricing means just a small margin above cost, which will roughly be the same for most.
Labor is what's gone in, use is the inherent/intrinsic value in the object, and exchange value is what people will trade in exchange for it. That's a bad summary, and there's a lot more to the dialectic examination of them.
Reading Capital (along with David Harvey's lectures) is worth it if you find these things interesting, it's a deep analysis of markets and capital.
You're probably right about it's use in understanding a capitalist market, Marx spends no shortage of time on how capitalists warp that basic idea.
Also - it's entirely possible that you make spectacular wine with the same effort I make bad wine.
They are somehow 'equal' in value?
It's just ridiculous. Labour theory of value just doesn't have a lot of meaning.
Explain how it is possible, and how the situation does not immediately solve itself with you stopping doing something you hate and are bad at.
As many have pointed out, "value" is subjective. Your terrible wine may be loved by someone. Or you may really enjoy making wine. As wine has zero intrinsic value, it is a luxury good, it's very possible for both wines to be just as valuable.
It has plenty of meaning, it just doesn't explain "profit."
Yes - of course people will have differing opinions - but aggregate market demand can be different for something made with the same amount of labour - that is not an issue of scarcity.
i.e. 'most people' can view one wine as better than the other with equal amounts of labour.
Again - surely you can, if you want get into issues of 'scarcity' i.e. you can talk about production volumes etc. but that's kind of a second order issue.
"Aggregate market demands" are capitalism, where wine is a status symbol and "good" wine generally refers to price. You are continuing to view this only in the eyes of capitalism and considering "value" to include "profit."
No - what I meant by 'aggregate market demand' was really just 'average price / perception of value' - and 'good' does not refer to 'price' - good wine literally is better.
I am not equating value and profit. I am equating value and price.
Some goods are generally better than others (i.e. most people will think one is better than the other) and require the same labour - this is my point - and it's unrelated to scarcity.
Price is value plus profit, thats the only reason to distinguish between the two.
If you could produce infinite quantities of Chateau-Petrus, it would be extremely cheap. But since it depends on being produced at a specific location, with a specific know-how, the quantities are limited. In this case, the amount of labour involved has little effect on the price of the wine.
Back on topic, "expensive" and "price" again add the concept of profit to the value produced. The only value of wine is enjoyment, so even Petrus wine has little more value than similar wines.
That increase in value is largely labor from learning the trade and long running slow maintenance. The only part that is scarce is the soil composition, something that could be recreated with a large amount of labor. Similarly, discovering that that area produced quality wine was labor intensive as well.
No - not at all.
Good wine can be 'more expensive' simply because it is better!
There's more willingness to pay, i.e. better demand curve!
Doesn't need to be less supply!
Point being: not all labour is equal, ergo, the idea of something being valued upon the 'amount of labour' put into it is really not useful.
I just don't believe the labour theory of value is a useful concept.
I don't think Marx provides any understanding of how the economy works - other than to hint strongly that prices are really a function of power - i.e. when one group has a monopoly on some critical thing, i.e. land or capital, then they can use that to leverage over another group, and then you have basically class struggle.
I mean, it's useful rhetoric, I'm not sure if it's useful theory.
Sorry if this missed the mark completely. Would love to learn.
Given how much our labour is amplified by machines, energy, machine intelligence, parts, equipment, R&D, support - it's not a very helpful way to think about anything.
It's also very unhelpful when considering prices of IP related things.
You study your whole life to become a great actor, you make a film - it only takes a month. Is it only a 'one month film'? Equivalent to the quality of a newby actor?
Almost everything requires at least some skill ...
Because I bet the price changes drastically, and that's the labor-value represented in object.
10 years and 1000's of lawyers to find out whether Microsoft is a monopoly? Give me a break! Just look at their income statement! Profit margins of 30% and more for 30 or more years? Do you seriously believe nobody would or could do the same for 20% profits?
A real market economy would tax away most of the excess profits after a certain number of years (depending on industry?). But then you would not have Apple and Microsoft and all your other beloved monopolists.
Ps: I'm a bit undecided but maybe it's OK for luxury products to not be part of the market. If you want to pay $200 more for an additional 1 GB on your iPhone when the price for 1 GB is $20, then it's no skin of my nose. But please make sure Apple pays their taxes.
How do you define 'excess profits'.
And BTW - yes - I really do believe 'nobody can compete with Microsoft'.
Do you realize how sophisticated those products are?
And for every MS product, there are tons of competitors.
MS doesn't just make a 'widget' - they depend upon the talent (and ability to evolve that), deep value chain integration, R&D - it's a constantly moving team.
The creator gets a time limited monopoly to pay for his efforts. Nobody ever thought having an unlimited monopoly was good for society (well except for the guys actually having the monopoly, cuz you know it trickles down somehow).
Regarding the quality of MS products, why it's obvious that they used some of their monopoly rents to hire smart people to work on it.
But the point still stands that they were and still are a monopoly. Otherwise someone equally smart would have broken into their market and pushed profit margins down.
Marx did not dispute that. His point, rather, was that workers are paid significantly less than the actual value of the work that they do (because said value is directly measured by how much their product sold for, minus all the non-labor expenses).
And from there he concluded that the difference is the economic rent that the owner of the means of production is effectively extracting from those workers, by virtue of his ownership giving him the monopoly on them (or rather, by virtue of the capitalist class collectively having a monopoly on the means of production).
And that, being pure rent, it does not serve any useful purpose in the economy, except for the one collecting it - i.e. things would be more efficient if people couldn't collect rent like that, which he proposed to achieve by rejecting the notion that means of production can be privately owned in a way that also bestows ownership of whatever is produced by them.
“Profit motive” was bunk psychology created by 19th century economists to explain away this discrepancy.