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?
your question just ask what the market wage rate is. what the market price of labour is. just survey and gather statistics. you are asking a purely empirical and contingent question
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
nirgrahamUK:your question just ask what the market wage rate is. what the market price of labour is. just survey and gather statistics. you are asking a purely empirical and contingent question
I can't gather statistics in this hypothetical "sandwich society".
mickanomics:As I was half way through reading "The Origin of Money and Its Value" I was terrified because LvM's thinking was looking dangerously close to my own, but luckily he seemed to take a detour at the last second and failed to solve the problem.
"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
mickanomics: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?
In short, like all subjective phenomena of the market, it is impossible to say a priori.
Snowflake:Why don't you just tell us what your idea is and we'll tell you if we know of anyone who has ever said the same thing.
The seeds of my idea are here.
By the way I am looking for a collaborator (preferably in London) that's already in an academic institution to help me publish this work. If you have any suggestions then I'm all ears.
I glanced at your blog. How is this idea new? It just looks like a variant of standard GE theory. There are plenty of articles with some permutation of Walrasian GE.
Perhaps I'm being too harsh, but I don't see this as an original idea.
Check out my blog at Kaleidic Society!
mickanomics:The seeds of my idea are here.
"would then finally give us an answer to my original question and actually tell use what assorted goods will cost in terms of whatever money there is in the model economy."
If you actually manage to make a model that fits real life data well, your model will be placed in competition with other predictive models. In the end, it is all just data fitting; The structure of your final equations may have no praxeological significance. Again, your study is purely phenomenological. Take for example the equation mechanical engineers use for behavior of steam. This equation has 56 parameters. No thermodynamicist claims these parameters reflect any fundamental principles. It simply works better than the Peng Robinson etc equations of state. This 56 parameter equation exists merely because it fits the data. If you do the same with prices in a particular economy, you will do no better.
mickanomics: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.
Prices and value are determined at the margin, not on average.
============================
David Z
"The issue is always the same, the government or the market. There is no third solution."
mickanomics:I really like that answer because part of the reason I am asking these questions is that I've already solved the problem. If I find that nobody has solved the problem before then I would like to publish my results in an economics journal.
I hear the Nobel commission publishes expert ass lickers.
"...The post-totalitarian system contrives to force life into its most probable states...This system serves people only to the extent necessary to ensure that people will serve it
Vaclav Havel
ziragt: I glanced at your blog. How is this idea new? It just looks like a variant of standard GE theory. There are plenty of articles with some permutation of Walrasian GE.
What does GE stand for? Can you give me a reference/link?
ziragt:How is this idea new? It just looks like a variant of standard GE theory.
One minute I'm being told the problem is impossible to solve, the next minute I'm being told its solved already... hmmmm...
mickanomics:The question now is: how many shekels will a sandwich cost?
Total shekels spent / number of sandwiches
Prashanth Perumal: Total shekels spent / number of sandwiches
Presumably this must be "per unit of time".. lets say 1 week. But the number of shekels spent in a week is not clear. It could easily be more than the total shekels in existence because the money can get spent repeatedly... or it could be much less than the total shekels in existence.
mickanomics: Presumably this must be "per unit of time".. lets say 1 week. But the number of shekels spent in a week is not clear. It could easily be more than the total shekels in existence because the money can get spent repeatedly... or it could be much less than the total shekels in existence.
Total shekels spent = Total shekel units * velocity.
Fine now?
mickanomics: Prashanth Perumal:Total shekels spent / number of sandwiches Presumably this must be "per unit of time".. lets say 1 week. But the number of shekels spent in a week is not clear. It could easily be more than the total shekels in existence because the money can get spent repeatedly... or it could be much less than the total shekels in existence.
Prashanth Perumal:Total shekels spent / number of sandwiches
you have programmed a hunger function right?
and be sure to make some of your robot consumers fussy eaters
loltastic
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