Economic Theory

grasping the after wind

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Value is rooted in demand.

If there's no demand for the labor, what value would it have?

Absolutely, a thing is only worth what someone is willing to give up to get it.

BTW someone said earlier that saving money takes it out of the economy. That would only be true if the person saving the money saved it someplace like in a can in their back yard or under the mattress. Money saved in a bank or in the stock market is being used in the economy to fund expansion, home ownership etc. There is no money sitting around in a big vault somewhere gathering dust.
 
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grasping the after wind

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Maybe. Someone has probably studied it.
Actually one cannot create value. Value is a subjective judgment made by the valuer not an objective thing that can be fashioned with the right techniques.
 
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OldWiseGuy

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I think the case could be made that spending resources on military doesn´t create or help creating value (in the way that e.g. building or improving infrastructure can).



You have touched upon the most misunderstood aspect of the economy: the difference between production and maintenance. Most of the economy is dedicated maintenance (repair and replacement) that doesn't add any significant value to the thing being repaired or replaced.

Think in terms of 'getting ahead financially'. After all the bills are paid (maintenance) what little is left over for savings is production or growth. Most people are employed in the maintenance field and don't even know it. It is this maintenance aspect that gives the economy stability. It is predictable and reliable.

Production, or growth, is usually creating something new, or creating something new to repair something that is old; a zero sum game.
 
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Resha Caner

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Actually one cannot create value. Value is a subjective judgment made by the valuer not an objective thing that can be fashioned with the right techniques.

I have an ax. Another man has a field of wheat. I can't eat without his wheat. He can't bake it into bread without my ax to cut wood. The wood and the wheat have no value to either of us. But we agree on an exchange of wood for bread. Now they both have value ... a value we created through our cooperative labor.

If you don't agree we have created value in that sense ... Shrug. OK.
 
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quatona

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You have stumbled upon the most misunderstood aspect of the economy: the difference between production and maintenance. Most of the economy is dedicated maintenance (repair and replacement) that doesn't add any significant value to the thing being repaired or replaced.
I do acknowledge this difference, but I fail to see how it´s in any way relevant to my point. If (IF!) paying the military industrial complex helps creating value, maintaining military facilities is, of course, helping to create value, as well.
 
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OldWiseGuy

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I do acknowledge this difference, but I fail to see how it´s in any way relevant to my point. If (IF!) paying the military industrial complex helps creating value, maintaining military facilities is, of course, helping to create value, as well.

Value is too vague and subjective to be used in discussing economics.
 
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grasping the after wind

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I have an ax. Another man has a field of wheat. I can't eat without his wheat. He can't bake it into bread without my ax to cut wood. The wood and the wheat have no value to either of us. But we agree on an exchange of wood for bread. Now they both have value ... a value we created through our cooperative labor.

If you don't agree we have created value in that sense ... Shrug. OK.

You have created bread not value.

Squeeze the bread in one hand and the percieved value in the other and see which feels real.

I hate the super food Kale. You could not pay me to take Kale off your hands. I agree with Jim Gaffigan who says that its superpower is tasting bad like a real strong spinach with hair. My neighbor loves Kale, thinks it is not only a healthy super food but delicious as well and is willing to pay $5.00 a pound for it. Which one of us is right about the value of Kale or if we are both wrong what is the correct value of Kale?
 
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quatona

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Building bombs creates jobs (lot's of jobs)
The government paying a company for moving useless rocks from one useless location to another useless location and back to the first (and so on) creates jobs, as well.
while providing a deterrence.
As far as I can see, a deterrent doesn´t create value.
 
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OldWiseGuy

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The government paying a company for moving useless rocks from one useless location to another useless location and back to the first (and so on) creates jobs, as well.

Does the government actually do this?

As far as I can see, a deterrent doesn´t create value.

The value created by deterrence is the sense of security.
 
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quatona

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Does the government actually do this?
I don´t think so, but the argument "it creates jobs" suggests that this would save the economy.



The value created by deterrence is the sense of security.
I was under the impression we were talking economic value.
 
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OldWiseGuy

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Sure. Now, what precise and non-subjective criteria would you suggest to use instead?

I wouldn't include it in any fashion in a discussion about economics. It's too subjective. Some consider the bombs a valuable defense asset, others see it as a provocation to war.
 
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OldWiseGuy

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I don´t think so, but the argument "it creates jobs" suggests that this would save the economy. I was under the impression we were talking economic value.

The economy is base on the exchange of labor through the medium of money. The product or service involved really isn't that important as long as the money keeps moving.
 
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quatona

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I wouldn't include it in any fashion in a discussion about economics. It's too subjective.
We already agreed on that. However, I was asking you which operative terms (precise and non-subjective) you´d suggest to use instead for discussing economics.
 
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