The Enlightened Examiner

Is marginalism dying? More and more economists are acknowledging that there are problems in marginal theory, and that the science has already begun moving away from the foundations of value theory laid down in 1871. This is happening while "heterodox" economists, such as MMTers who strongly lean toward socialism, are gnawing at mainstream theory from the outside. But what if I told you there is a third option, compatible with capitalism? Not an intrinsic or a subjective theory of value. And not a theory that is embarrassed to frame economics as a normative science that views the pursuit of wealth as a virtuous end by its own right. I present to you an objective theory of economic value. Yes, objective, which connects value to fact—action to identity—abundance to the key problem of traders. Read the first part below to discover the objective standard of values on the market.

@ASuijuris To say "next best thing" is to presuppose a standard with which you choose what is best or worst among the available options.

@MrExaminer You don't need to rank thousands of things; you only rank the thing you chose against the next best thing you gave up. That "standard of evaluation" is just human subjective preference.

For Austrian economics to be compatible with Objectivism there is a huge gap in epistemology that must be accounted for. Peikoff said that a theory of value rests on one's theory of concepts (and I agree). As you can see here, there is no bridge between these two views.

@ASuijuris An actor cannot possibly rank thousands of possible alternatives before acting. He needs a standard of evaluation.

@MrExaminer You’re smuggling in a false distinction. Opportunity cost is value of foregone alternative as ranked by actor. If you choose A, you necessarily exclude B, C, and everything else you could have done with same scarce time and means. That exclusion is exactly what ‘cost’ means.

The "incurred opportunity cost" is just a vague term that substitutes "evaluated the situation according to some standard." In your case, the Austrian doctrine. You don't literally "incur" the infinite possibilities of that which you can write in a tweet. You operate within the conceptual framework (Austrianism) that you chose to adopt.

@MrExaminer Calling it 'ritual' doesn't refute point. If you think the action axiom is wrong, then name the exact claim you reject: that you acted toward an end, used scarce means, and incurred opportunity cost.

@Borges1234x @RichardHanania That's a good question. IMO it's because Christianity permitted a theological separation between religion and politics ("Render unto Caesar the things that are Caesar's, and unto God the things that are God's").

@MrExaminer @RichardHanania So why didn't it take place in a non Christian culture?

You've probably heard the theory that Christianity is responsible for the Enlightenment and the values of Western Civilization. I explain here why I don't buy it. The evidence is a just-so story that ignores a lot of evidence to the contrary. richardhanania.com/p/jesus-ancien…

Do you agree that for every purpose you may have (e.g., "I want a new car") the market offers many alternatives? The next step to ask is how you decide which means best serves your purpose. This requires a standard because you can't hold thousands of options in your mind at once.

@MrExaminer @Trent_STEMpunk I'm not appealing to authority, your argument is flawed. Opportunity cost exists outside market standard, and economic value is a broad term that applies in that context as well. Ack that first then we can talk about market exchange. Don't move the goalpost.

@ASuijuris Now you're just reciting Austrian economics like it's a ritual.

@MrExaminer You did not consult an objective standard of value before typing your reply. Your own action refutes your thesis.

@YashArya @Trent_STEMpunk I stressed that there's a difference between a market exchange and an isolated exchange, the former giving rise to the need of a standard. You can think about my argument rather than appeal to authority.

@MrExaminer @Trent_STEMpunk We're talking about Austrian economics, not whatever your idiosyncratic view of econ is. Chapter 4 is literally “Robinson Crusoe” Economics cdn.mises.org/essons_for_the… Ch. 2 is "On the economic circumstances of the isolated individual" cdn.mises.org/Economics%20fo…

@YashArya @Trent_STEMpunk My argument is that isolated exchange is not economics.

@MrExaminer @Trent_STEMpunk That's why I said it's not limited to market context. :) You know this. So many Austrian econ books start with a Robinson Crusoe example.

@YashArya @Trent_STEMpunk The concept "market" presupposes many goods being offered by multiple traders. Otherwise you're discussing bartering, not markets.

@MrExaminer @Trent_STEMpunk Economic concept of value is not limited to market context, doesn't need an abundance of alternatives (only at least 1 alternative), nor an objective standard to evaluate the best deal (may be irrational).

This is the key paragraph in Hayek's "The Meaning of Competition." The problem that modern economics tries to solve is the problem of universals applied to markets. The realization of this and its relation to marginal utility theory is actually mind-blowing. To be continued...

@TheDrewHaas @Somuchsteak @RichardHanania Self-sacrifice is evil

@MrExaminer @Somuchsteak @RichardHanania Diabolical worldview man

Ok, I don't remember the full conversation, but I presuppose that fondue is valued higher within a certain range of customers for whom the two options matches their personal context. And again, I don't think you really know Rand's epistemology, so it's weird to claim she's wrong.

@MrExaminer Well, no, I had to clarify all those conditions that are unique to a particular subject. Regardless, much as I like Rand, she was just wrong in things like certainty and induction. Other than that, we’re prolly like 90% agreed on everything

Taking Hayek seriously (via ChatGPT) and realizing that his epistemology is some psychologized/pragmatist form of Marxism. Concepts do not correspond to reality, they are subjective practical necessities that "work" or "fail" depending on their similar interpretation by others.

@Somuchsteak @RichardHanania I do not judge "worth" from an intrinsic, religious lens. I think we're done here.

@MrExaminer @RichardHanania So ants are more “worthy” of existing then humanity?

@ASuijuris Re your first sentence: right, that's why they are surplus goods.

@MrExaminer Elon Musk doesn't hold Teslas to drive them all at once; he holds them as means to generate future revenue. That is capital accumulation directed toward a purposeful end. Value doesn't float inside the physical atoms of a Tesla; it exists in minds of people who want them.

@Somuchsteak @RichardHanania Worthiness comes from the demonstrated efficacy of your efforts to sustain your life.

@MrExaminer @RichardHanania Where is this “worth” can i measure it? Why is man more worthy of existing then an ant?

@KWamlo Ah the fondue guy 😄 I said the fondue is more valuable than cheese bagel for people who like cheeses and have no dairy allergies. This would actually be clear to you if you had a proper (and objective) theory of concept formarion.

@MrExaminer Well, you think cheese fondue is objectively more valuable than bagels, even to ppl who are lactose intolerant, so what can we do? Classifications are fallible constructs, even if what they’re classifying real. They need to be tested against realty (Hayek’s hypothesis approach)

@Somuchsteak @RichardHanania I don't believe in magic, sir. Worth is earned, not inherited. Morality is induced from the facts of man's nature and his requirements to live.

@MrExaminer @RichardHanania really? So you think you have inherit worth? Where does this magical substance come from?

@YashArya @Trent_STEMpunk "What do I want?" *in a market context* presupposes the existence of an abundance of concrete alternatives. This necessitates a standard of evaluation to guide traders how to judge the best deal for their purposes. This is an objective standard that applies to all traders.

@MrExaminer @Trent_STEMpunk Economic & philosophical usage of value are two different things. Economic value deals with "what do I want?" (this is subjective) Philosophically, value deals with "what's good for me, based on the kind of being I am?" (this is objective) Where is the conflict?

@ASuijuris A surplus is a good that is owned in excess requirement to one's needs. As in, you can literally not use it personally. Can Elon Musk use all his Teslas? I don't think so. Hence: surplus. What's funny/crazy is that you subjectivists kinda deny the existence of goods.

@MrExaminer A 'surplus' isn't some magical, objective physical state. A good is only a surplus because the owner values it less than what they can get in trade. This is just 19th-century Labor Theory of Value wearing an Objectivist trench coat.

@Somuchsteak @RichardHanania Exactly the opposite. Under Christian/religious ethics no individual has a right to exist but by slaving for others or God.

@MrExaminer @RichardHanania Take the enlightenment to its logical absurd conclusion. You personally have no more value or roght to exist then a grain of sand