Does anyone know of any work (either by an Austrian or non Austrian) that attempts to derive the value of money in terms of amount of some produce or an amount of hours worked. Perhaps something along the lines of, if there are X dollars in total in the society and (other things defined...) then on average each dollar will buy Y hours labour.
As an illustration, here is my own formulation: Imagine a very simple society in which there is only one commodity: sandwiches. Everyone in the land grows the ingredients for their sandwiches in their gardens. Often they will exchange sandwiches with their neighbours just for variety. There is no money in this society only barter. But then one day the king of the land says "I've just invented something I'm going to call money. It consists of metal coins called shekels. I will give everyone in the land 1000 shekels and from now on bartering is banned. All exchanges must be via the medium of exchanging shekels. What's more, nobody is allowed to eat their own sandwiches." The question now is: how many shekels will a sandwich cost? It may well be that on day one, people will not have a clue and all sorts of silly prices may get paid... but presumably over time the price will gravitate towards a certain value. What will that value be?
mickanomics:I don't think LvM himself would agree with the statement "values are ordinal".
Ludwig von Mises:A judgment of value does not measure, it arranges in a scale of degrees, it grades. It is expressive of an order of preference and sequence, but not expressive of measure and weight. Only the ordinal numbers can be applied to it, but not the cardinal numbers. It is vain to speak of any calculation of values. Calculation is possible only with cardinal numbers.
It is vain to speak of any calculation of values. Calculation is possible only with cardinal numbers.
http://mises.org/pdf/humanaction/pdf/ha_07.pdf
*sigh* Now you're trying to refute marginal utility.
I can't believe that Peter Schiff has followers who don't actually understand free market economics.
If you find something evil that wobbles, push it. - Gary North
Le Master: mickanomics:I don't think LvM himself would agree with the statement "values are ordinal". Ludwig von Mises:A judgment of value does not measure, it arranges in a scale of degrees, it grades. It is expressive of an order of preference and sequence, but not expressive of measure and weight. Only the ordinal numbers can be applied to it, but not the cardinal numbers. It is vain to speak of any calculation of values. Calculation is possible only with cardinal numbers.
If LvM really thought (and I'm still not convinced) that value judgements were not cardinal (in our minds) then he was sorely mistaken. If, on an ordinary day, I offered you the choice between two small pieces of chocholate of two different brands, presumably you may prefer one piece to the other by a small margin. Whereas lets say you had just crossed the sahara desert and were dying of thirst and I offered you the choice between a piece of chocolate and a pint of cold water you would prefer the water to the chocolate by a large margin. No?
liberty student:Now you're trying to refute marginal utility.
I am very happy with the concept of marginal utility.
mickanomics:If, on an ordinary day, I offered you the choice between two small pieces of chocholate of two different brands, presumably you may prefer one piece to the other by a small margin.
That margin, is utility, and utility cannot be measured cardinally.
mickanomics:Whereas lets say you had just crossed the sahara desert and were dying of thirst and I offered you the choice between a piece of chocolate and a pint of cold water you would prefer the water to the chocolate by a large margin.
Again, due to utility. That is what marginal utility is about.
This is pretty straightforward refutation of your position, and any claims you may have about where Mises stood.
mickanomics:I am very happy with the concept of marginal utility.
Then stop claiming it doesn't apply.
liberty student: mickanomics:I am very happy with the concept of marginal utility. Then stop claiming it doesn't apply.
I don't see how I'm claiming it does not apply.
liberty student:That margin, is utility, and utility cannot be measured cardinally.
Lets imagine for a second that the man in question is you. Lets also imagine that after you made the choice in both scenarios you were asked to choose some words to describe the degree to which you preferred your choice to the alternative. What words do you think you may have come up with?
Here's a suggestion...
Scenario 1. "A little bit"
Scenario 2. "A lot"
Do you understand the concepts of ordinal and cardinal?
To darkness I condemn you...
mickanomics: Here's a suggestion... Scenario 1. "A little bit" Scenario 2. "A lot"
That's FIGURATIVE language.
Looking over this thread is like watching a train wreck.
Mickanomics, it's perfectly fine to get excited about your own economic ideas. But your poor understanding of value theory makes me think you've done a lot of theorizing without a lot of careful reading to inform your theorizing. It's untoward and embarrassing to go about professing to have outdone Mises in multiple different topics, when it's clear you're not even familiar with the basics of his theories. For example you clearly hadn't read the crucial passage Le Master and Liberty student quoted.
Please, do continue your passion for economics, but be more humble and studious about it.
Human Action Comics Issues 1-6
Lilburne:That's FIGURATIVE language.
I know it is, but tell me very precisely why you would use different terms for the two cases. Why not answer "somewhat" to both?
Lilburne:without a lot of careful reading to inform your theorizing
In 1983 I became interested in the challenge of writing a computer program to play the ancient oriental game of "go". I found a local club and went to ask people about how you play the game. I was told that it was impossible to write a program that could play the game. I knew that there were some academic papers published about other peoples attempts but I deliberately chose not to read them because I feared that it may set me off thinking on the wrong track.... over the coming years there were many international contests pitting one go program against another. In 1999 at a contest in Shanghai, I became world champion.
It is obvious that there are vast amounts of bad economics out there and I could spend a lifetime reading only a tenth of it. It makes sense to be very selective. Obviously there is the risk that I may re-invent a few wheels, but at least in the process I will get a good grasp of how the wheels work. I started this thread for the purposes of finding out what work had been done in finding the value of a fiat currency, and in that regard this thread has been a success. I never knew LvM himself had worked on exactly the problem I was interested in, so I am grateful for the tip-off.
If you want to discuss etiquette then I suggest you have words with a few other people first. I have been called every kind of idiot in this forum, there are some incredibly rude and childish people here, I have no idea why they weren't barred long ago. I'm not saying I've never insulted anyone here, but if you look at the history of my posts (painful I know) you will find that I dish out about one insult for every ten that are thrown at me.
Jon Irenicus: Do you understand the concepts of ordinal and cardinal?
Yes. Ordinal is concerned with the ranking of things. Cardinal is concerned with the value (in the numerical rather than economic sense) of things.
Often though you can have both concepts going on at the same time. For example, imagine a collection of pebbles of varying weights in a room. Lets say that someone has already placed them in a row in order of weight before you enter the room. Yes there is some ordinal information available about the stones (you can see that from the arrangement in a row) but at the same time there is cardinal information - you could get some scales and weigh them yourself.
Now you may say "aha, but you can't measure human thoughts, so human choices only have ordinal information available", so to carry the analogy over to the stones scenario its like only being allowed to view the stones and not touch. You can now say that only ordinal information is available. But with both human thought and with stones you can't touch, there is not zero cardinal information. Instead there is only crude information. So in the case of the stones you may be able to see that one stone is much bigger than the others and you can say something like "Well it looks bigger than the others and most stones are quite dense and its not very likely to be hollow (etc. etc.) so its probably quite heavy" Similarly in the case of the chocolate/water/desert scenario you could say that the thirsty man probably wants the water much more than the chocolate, not just somewhat more.
Why don't you like, just try to put a number on my preferences.What units of measurement do my preferences have? .......
"It has always been the prerogative of children and half-wits to point out that the emperor has no clothes. But the half-wit remains a half-wit and the emperor remains an emperor." ~Dream
Let's let Rothbard elucidate:
Murray Rothbard:It is important to realize that there is never any possibility of measuring increases or decreases in happiness or satisfaction. Not only is it impossible to measure or compare changes in the satisfaction of different people; it is not possible to measure changes in the happiness of any given person. In order for any measurement to be possible, there must be an eternally fixed and objectively given unit with which other units may be compared. There is no such objective unit in the field of human valuation. The individual must determine subjectively for himself whether he is better or worse off as a result of any change. His preference can only be expressed in terms of simple choice, or rank. Thus, he can say, “I am better off” or “I am happier” because he went to a concert instead of playing bridge (or “I will be better off” for going to the concert), but it would be completely meaningless for him to try to assign units to his preference and say, “I am two and a half times happier because of this choice than I would have been playing bridge.” Two and a half times what? There is no possible unit of happiness that can be used for purposes of comparison and, hence, of addition or multiplication. Thus, values cannot be measured; values or utilities cannot be added, subtracted, or multiplied. They can only be ranked as better or worse. A man may know that he is or will be happier or less happy, but not by “how much,” not by a measurable quantity.
Snowflake: Why don't you like, just try to put a number on my preferences.What units of measurement do my preferences have? .......
Hmmm, good question.... probably amps, because its an electrical phenomena in the brain. It may correspond to the total positive electrical signal received by the set of neurons responsible for instigating the action that will satisfy your desires.
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