I think Adam smith came up with the concept that labor add value.
Here's the proof that Black-Scholes-Merton (BSM) is WRONG
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I think Adam smith came up with the concept that labor add value.
Sure, but not a fixed value of labor. Smith and Say, etc. were pretty clear on the concept of value as something established between buyer and seller. But hey, at least old Karl came up with "capitalism" as a term... he just expected it to be a minor stage on the road to socialism. Wish I knew what he'd been smoking!
Edit: I love Google; in the old days, you had to go to a library and dig to find the stuff you dimly remembered.
"The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people." - Adam Smith, "Wealth of Nations" Book 1, chapter V
So, 'value' is the amount of labor an asset can command from others - vs. Marx's innate value of labor. Only one of these fits the real world...
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Well from an economics point of view, Marx is not that far off from the truth. What Marx is advocating is the marginal cost of a good, the extra cost of making that one extra unit of that good and he believes the value that a good should command aka its marginal revenue should be just the marginal cost of making that good, no more and no less. And for those of you who's studied economics knows that eventually when all else equal, when there is no artificial interference, no anything, complete availability of information and transportation and everything, the marginal revenue of selling that one extra unit of that good exactly equals to the extra cost of making that good and that's when the marginal value is maximized. In Marx' vision, that's what happens when true communism arrives, in a utopia. And that matches exactly what is stated in the economics theory of perfect competition.
Again, his theorizing broke down the moment it met the real world. Value is the point of agreement between a buyer and a seller, not some silly "should" from a textbook; the only way to change that is "artificial interference" - that is, coercion of one side at the expense of the other. E.g., socialism.
Marx was a silly, financially- and politically-incompetent ivory-tower intellectual; he lived off other people for most of his life (rich brother in law, Engels, etc.), and people who actually understood power - e.g., Bismarck - used him as a puppet and discarded him at will. His only legacy is a set of compelling fairy tales that can be used to stir up the ignorant masses and get them to spill blood.
In his system of pseudo-economics, Marx argued that once communism was achieved following the transition from capitalism, worker compensation would continue to improve - but he provided no explanation or method that would account for this rise. However, about the same time as his publication of Das Kapital, three works from the Marginalist School of economics demonstrated that only the intelligent application of capital to the process of production could increase worker standards of living - and from Richard Arkwright on down to the present moment, it has done so. It is, in fact, the only system in history that has.
I'm no apologist for communism, but your last sentence is a bit hyperbolic. Kublai Khan vastly increased the standard of living in Mongolia, not sure there was a lot of "intelligent application of capital to the process of production" there. The Ottoman Empire greatly increased workers standards of living there, in an economic framework where the charging of interest was banned! Even the Soviet Union was an utterly backward set of feudal states before communism and although they potentially could have done far better under capitalism, it's undeniable that workers in the USSR had greatly increased standards of living over the peasant days of the Tsars. Potential being the operative word, many of the poorest countries in the third world are capitalist, but also happen to be hopelessly corrupt, run by dictators, and have unchecked massive disparities in wealth distribution. You need far more than just "the intelligent application of capital to the process of production" And where does China's current system fit in all that? Workers are significantly better off there now than under both Mao and the Nationalists. The world's not so black and white.
By your reasoning, since Idi Amin "increased the standard of living" for himself and his clique, that's an unalloyed good. Ditto every successful thief in history: they "increased the standard of living" for themselves and whoever they chose to spend their loot on, therefore theft is good.
I suggest you explore the difference between a steel man argument and a straw man argument, and determine which one you're applying here. If you also consider why you're choosing to do so, you may learn something useful.
No, I most certainly didn't include someone like Idi Amin because he most certainly didn't improve the standard of living for the workers in Uganda. In all of the examples I did provide the standards of living for workers in those countries undeniably improved under those governments. Certainly they often improved because they were so abysmal before that the bar for improvement was very low, but it's undebatable that their lives, not just the ruling elite, improved.
By the way, a straw man argument is bringing up something the other person didn't say and arguing against it, because you don't have any arguments against what they actually said. You did provide a good example of a straw man by ignoring all the examples I provided and substituting Idi Amin, who I specifically didn't include. Thank you for that. Since we're apparently going around suggesting things here, I suggest exploring the concept of projection....
The ultra-obvious point was "at a direct cost, usually horrible, to someone else". A.k.a., robbing Peter to pay Paul. Capitalism does not solve all problems - nothing can - but value-for-value exchange "floats all boats" as a default outcome; it produces value, whereas other economic systems transfer it, generally via coercion and theft.
Yep. Such as you ascribing some sort of absolutism to my point instead of a reasonable, charitable interpretation. I didn't provide a complete, perfect, utterly flawless economic treatise in the space of a single forum post, and you felt compelled to triumphantly demonstrate your amazing perspicacity by pointing that out.
Perhaps you should read up on the actual meaning... um, never mind. Actually understanding the point being made, if it involves anything beyond the glaringly obvious, does not seem to be within your ability today. Let's just skip it.
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