Does Economic Value Derive from Demand or Difficulty?

This, from about a week ago, probably will only be meaningful for those who already know about the roots of current “libertarian” thinking in the writings of the mid-twentieth century economists, Ludwig von Mises and Friedrich von Hayek (apparently non-libertarian conservatives are also influenced by them), and in fact I don’t know enough about economics myself to understand all of it, but I thought these paragraphs from economics professor Brad de Long were interesting:

The point of view underlying von Mises's—and von Hayek, and Marx, and Ron Paul—complaint against Fiat money in general and monetary management of the business cycle in particular is this: that value comes from human sweat and toil, not from being clever. Thus it is fine for money to have value if it is 100% backed by gold dug from the earth by sweat and machines and muscles (even if there is no state of the possible future world in which people actually want to exchange their pieces of paper for the gold that supposedly backs it). But it is not fine for money to have value simply because it is useful for buying things. There is, von Mises—and Marx, and von Hayek, and Ron Paul—think, something profoundly wrong on an economic and on a moral level with procedures that create value that is not backed by, in Marx's case, human labor, and in von Mises's and von Hayek's case human entrepreneurial ingenuity. And in its scarier moments this train of thought slides over to: "good German engineers (and workers); bad Jewish financiers".

Note that this does not just apply to fiat money produced by a government.

This applies to all financial market asset valuations in excess of capital cost of production (or perhaps the value of the inventions of the gigantic Krell-like brain of John Galt). They are, to von Mises, all cheats.

This (which, as de Long points out, also applies to Marx’s labor theory of value), does say that because “value comes from human sweat and toil,” the price of edible dandelion roots foraged from a meadow should always be less than the price of a big boulder that was dug out of my yard so a sewer line could be put in place.  It doesn’t, however, imply that it is somehow cheating to ask a neighbor or friend for help, even with trivial things like opening a package or fastening a necklace, which would just be silly.  Though I’m not sure why “value comes . . . not from being clever” isn’t supposed to remove the real value from “the inventions . . . of John Galt.”

But I thought of this again when I read, recently, an essay by Martha Nussbaum, a professor of philosophy, law, and religion, on the objectification and harassment of women on the Internet (in The Offensive Internet, a volume she co-edited).  She discusses

the tendency of some societies to define the ideal adult as self-sufficient, independent, lacking in deep needs with respect to others.  In many societies, such pictures are held out to young people—but far more often to males than to females.  The idea of the "real man" as someone who is never weak, never dependent, always in control, is a very common feature of developmental patterns in countless societies, but certainly in ours, which so strongly valorizes the lone cowboy who can provide for himself without the help of any others. 

Even though, even taken to an extreme, the point of view Brad de Long attributes to people like Marx and Ron Paul and Ludwig von Mises applies only to economic theory, not to the details of ordinary people’s mundane lives, it does sound as though this economic theory supports—since Ayn Rand has already been brought into the discussion—what her novels’ villains condemn as “rugged individualism,” and what Nussbaum suggests is, in some places and at some times, considered appropriate for all men but for no women.

Comments

[LFC]

I wrote a very long comment and then I pushed the wrong keys by accident and my computer ate it.

Short, blunt version: this post is very confused about Marx, who has nothing to do with rugged individualism as Nussbaum describes it in the quoted passage, and who would have regarded Randian notions as obfuscatory bourgeois ideology of the worst sort. DeLong ropes Marx, R.Paul and Mises/Hayek together to make a narrow, specific point. You then extrapolate from that point in an unwarranted way. If the ghost of Marx read this post I think it would be gyrating in agony.

[casino en ligne]

Je ne peux pas rattraper ce que Marx voulait dire. Le fait est que laisser le grossissement économique.