(12-31-2016, 10:48 PM)FireIceTalon Wrote: This is just an argument of semantics. Yes, an important part of the social relationship that I described is based around the 'Labor THEORY of value'. A theory which, whether you like it or not, is valid.
It isn't semantics. The Labour Theory of Value is, as you say, a theory. If it was valid, it would reliably lead us from old truths to new ones. But it would also be called into question by any situation where it led us from truth to falsity.
In this particular instance, the Labour Theory of Value is a troublesome problem even for diehard Marxists trying to interpret the great master's thoughts. It doesn't obviously parse into a universal theory of either values or prices generally. How does it help us understand the value of a historic building? Of knowledge and expertise? Of intellectual property? Why is owning the rights to Star Wars so much more valuable than owning the rights to Waterworld? Why is beachfront property so much more valuable than inland property? Why does the price of agricultural products go up when most of a crop is ruined just after harvest? Why are fashion products so expensive, yet valued so differently? Why are haircuts in one country versus another priced so differently, when both their labour inputs and use values are nearly identical? It just doesn't have much use for these problems - we need more sophisticated theories of value.
Salvaging any use from the Labour Theory is tricky; the usual way is to restrict the theory to exclude the obvious exceptions. It is passable as a restricted theory of the long-run price of manufactured commodities, under some assumed normal conditions, in competitive markets. I personally find it useful in understanding the way that wages can increase with economic growth even for the least skilled workers. But that seems like the opposite of the use Marx wanted to put it to.
One can also try to salvage the theory by trying to jump through enough hoops to somehow relate every conceivable value back to labour time. For example, beachfront property is valued because of the labour time it would cost to provide the same level of enjoyment-of-warmth-and-scenic-views, thus a beach functions like a piece of machinery, which is simply the value of "dead" labour. But that road is just madness, in my view, and yields no insights, only tortured attempts to make exceptions fit the rule.
So, no, the labour theory of value is neither valid nor complete. At best, it has restricted applications to easy problems. We know this because it predicts facts to be true that are known to be false, and there are many known facts which are incompatible (or at least inexplicable) with the labour theory of value.
-Jester
(01-01-2017, 04:09 AM)kandrathe Wrote: Ok, I see. I'm not really blaming the fed, so much as saying the 2008 acceleration of the 2006 law change had the unintended consequence of allowing (removing the disincentive) pooling reserve deposits. The upside is the security of the banking sector, the downside is a dearth of available capital for economic expansion. The law sought to remove the disincentive for banks to keep reserves due to it being "unused capital".
The disincentive to pooling reserve deposits is, and has always been, opportunity cost. That's the same as with any bank - you only save your money there if you think it won't make you more money elsewhere. (Including liquidity concerns, of course.) At most, paying interest on reserves reduces the opportunity costs of holding those reserves by 0.75% per year. The only reason that would be important, is if the opportunity costs were already very low, and the only reason that would be true is if there is a severe shortage of investment opportunities. The Fed does not control the available investment opportunities in the economy; if those are poor, that's someone else's problem.
-Jester