That society might gain additional benefit from how you spend your money is merely coincidental.
I’m not sure what “coincidental” means here. The question is how much more or less than $100 of value you create by working, and that seems to depend about as much on how you spend your money as it does on how you earn your money.
if I am interpreting Zolmeister correctly, i think you are misunderstanding their point and/or are talking past each other.
If I get paid $100 to write software for a company, that company may earn far more than $100 from the software I write; the company then resells the software, creating a ton of wealth. The wealth creation happens through the work, not the macroeconomic details of how I spend the $100. Those macroeconomic details are the “coincidence” of which GP speaks.
When I work I create value for the world, which is ultimately measured in benefits to other humans. And when I go spend my money I impose a cost on the world which is ultimately measured in the effort those people put in to give me what I bought, or the other people who could have had the thing that did not, or whatever.
It seems like the question is about the balance between the value I create by working, and the value others lose when I consume, isn’t it? It’s relevant both how much other people value what I do for them, and how much other people value the effort they put in for me.
You could have a worker that faced a situation that if we doesn’t lower his pricer all the customers will go to the competitors. If people were completely farsighted and could factor in everything they would close shop immidietly. But it isn’t unheard off to run an activity a little while with loss or run it by overworking oneself outside of ones capacity. There are uncertainties and closing and opening a shop isn’t neccesarily frictionless. But that fricton can mask an area where activity is kept for inertias sake while actually being a little bit of burden.
Doing all the risk adjusments and opportunity costs and everything correctly is cognitively very challenging. Trusting that everybody does every decision always correctly might be handy for mathematical ideal land but for limited cognition agents it just means that everybody has a story how their deal makes sense. And like nobody is the villain of their story, everybody is the mastermind of their business. It doesn’t mean that everybody is a saint or that all business is suistainable.
Suppose that you write an ET game get paid for it. Your company sells the game to retailers. Turns out the game is utter trash and of no gameplay or cultural value. Retailers decide to dump the game cartidges under the ground as $0 worth items.
Under some definitions the game writer provided value to their company and the retailers destroyed value by finding a item they paid money to now be of worth 0.
By another definition nothing of value was created but some money transfer from retailers to game companies and game writers happened.
But that’s not what typically happens. Take a company like Google. Google has about 100000 employees, and their average annual salary is 117 000 $. Google’s yearly net income is 35 billion dollars. An average Google employee is creating value 4 times their salary. The effects of their spending on pollution etc. are negligible in comparison.
Any good that is “consumed” is in a state that has resale value of $0. If the ET game company made 35 billion it wouldn’t have guaranteed that the product actually had any use value just that some people are willing to receive it by buying with that cash.
If I save 3 lifes and get $100 in compensation does that mean that a life is $33 in value? Human lives seem like they would have value outside of their exchanged value.
If there was a homo economicus that could choose between spending a day chopping down trees to get $1000 or spend a day saving 3 people and getting $100 the result would be that trees would get chopped and people would be left to die. This would to many seem like a tragic allocation of world affecting power. In order to compare whether market prices line up with our utility function satisfaction we need to be able to model the situation where the prices are not aligned. if one is able to recast the options in utilons that might resolve the problem. But then a strategy being homo economicus efficient doesn’t tell whether the strategy is aligned with a value profile or not.
Doing service and getting paid well for it is a hint that it might not be totally frivolous but it is not staighforward to define that value via exchange. If somebody would do the same thing a google engineer did and didn’t get any compensation for it it woud be just as valuable. Or a piece of code written as freeware or as proprietary software has comparble use value regardless of the cost associated with aquiring it.
If I pay you 100$ for saving 3 lifes, it means I value these lifes at at least 100$. The payment is not equal to the value, it is a lower bound estimate. Granted, I could make a mistake and spend these money on a cure that didn’t work, or on a game I didn’t enjoy. Then I would give away more than I got in return. But if we’re talking about an established company that sells the same goods or services over and over again, people are going to learn what these goods or services are worth and stop making such mistakes.
I’m not sure what “coincidental” means here. The question is how much more or less than $100 of value you create by working, and that seems to depend about as much on how you spend your money as it does on how you earn your money.
if I am interpreting Zolmeister correctly, i think you are misunderstanding their point and/or are talking past each other.
If I get paid $100 to write software for a company, that company may earn far more than $100 from the software I write; the company then resells the software, creating a ton of wealth. The wealth creation happens through the work, not the macroeconomic details of how I spend the $100. Those macroeconomic details are the “coincidence” of which GP speaks.
I may still be misunderstanding.
When I work I create value for the world, which is ultimately measured in benefits to other humans. And when I go spend my money I impose a cost on the world which is ultimately measured in the effort those people put in to give me what I bought, or the other people who could have had the thing that did not, or whatever.
It seems like the question is about the balance between the value I create by working, and the value others lose when I consume, isn’t it? It’s relevant both how much other people value what I do for them, and how much other people value the effort they put in for me.
You impose no such cost, as those willing to exchange your money for their services do so profitably.
It is possible to trade oneself to be bankcrypt.
You could have a worker that faced a situation that if we doesn’t lower his pricer all the customers will go to the competitors. If people were completely farsighted and could factor in everything they would close shop immidietly. But it isn’t unheard off to run an activity a little while with loss or run it by overworking oneself outside of ones capacity. There are uncertainties and closing and opening a shop isn’t neccesarily frictionless. But that fricton can mask an area where activity is kept for inertias sake while actually being a little bit of burden.
Doing all the risk adjusments and opportunity costs and everything correctly is cognitively very challenging. Trusting that everybody does every decision always correctly might be handy for mathematical ideal land but for limited cognition agents it just means that everybody has a story how their deal makes sense. And like nobody is the villain of their story, everybody is the mastermind of their business. It doesn’t mean that everybody is a saint or that all business is suistainable.
Suppose that you write an ET game get paid for it. Your company sells the game to retailers. Turns out the game is utter trash and of no gameplay or cultural value. Retailers decide to dump the game cartidges under the ground as $0 worth items.
Under some definitions the game writer provided value to their company and the retailers destroyed value by finding a item they paid money to now be of worth 0.
By another definition nothing of value was created but some money transfer from retailers to game companies and game writers happened.
But that’s not what typically happens.
Take a company like Google. Google has about 100000 employees, and their average annual salary is 117 000 $. Google’s yearly net income is 35 billion dollars. An average Google employee is creating value 4 times their salary. The effects of their spending on pollution etc. are negligible in comparison.
Any good that is “consumed” is in a state that has resale value of $0. If the ET game company made 35 billion it wouldn’t have guaranteed that the product actually had any use value just that some people are willing to receive it by buying with that cash.
If I save 3 lifes and get $100 in compensation does that mean that a life is $33 in value? Human lives seem like they would have value outside of their exchanged value.
If there was a homo economicus that could choose between spending a day chopping down trees to get $1000 or spend a day saving 3 people and getting $100 the result would be that trees would get chopped and people would be left to die. This would to many seem like a tragic allocation of world affecting power. In order to compare whether market prices line up with our utility function satisfaction we need to be able to model the situation where the prices are not aligned. if one is able to recast the options in utilons that might resolve the problem. But then a strategy being homo economicus efficient doesn’t tell whether the strategy is aligned with a value profile or not.
Doing service and getting paid well for it is a hint that it might not be totally frivolous but it is not staighforward to define that value via exchange. If somebody would do the same thing a google engineer did and didn’t get any compensation for it it woud be just as valuable. Or a piece of code written as freeware or as proprietary software has comparble use value regardless of the cost associated with aquiring it.
If I pay you 100$ for saving 3 lifes, it means I value these lifes at at least 100$. The payment is not equal to the value, it is a lower bound estimate. Granted, I could make a mistake and spend these money on a cure that didn’t work, or on a game I didn’t enjoy. Then I would give away more than I got in return. But if we’re talking about an established company that sells the same goods or services over and over again, people are going to learn what these goods or services are worth and stop making such mistakes.