Wealth of Nations

[ksen]

I agree that you seem confused that sometimes the same word can have different meanings.

 

[Axulus]

I agree that you seem confused that sometimes the same word can have different meanings.

Seem? I've explicitly stated that I'm confused at least 3 or 4 times and asked for clarification, and only got evasiveness.

 

[ksen]

I can't say it any plainer so I'm not sure what you're looking for.

You have not defined it - the way you are using the term is inconsistent and incoherent.

A worker is "more valuable" to a company if they can produce more product. You are thus saying that value = productivity.

Yes.

Then you say that having products and services to sell is "highly valuable". Having products and services to sell is highly productive?!? That's incoherent.

Well, what do you call the importance to a company of having products to sell? I'd say they find that a highly desirable state of affairs and thus it has value to them.

 

[Shafees]

You know I'd also like to read it if I get the time. And I don't know Jack about economics past the supply- demand graph.

 

[Playball40]

I can't find my copy. I'll have to buy a new one. There's a combo Wealth of Nations/Moral Sentiment kindle edition for pretty cheap. But I'd like to have a paper copy of them. #fwp

I think it's free on Amazon Kindle.

 

[ksen]

I ended up finding my copy!

 

[ZiprHead]

The ebook is available for free at the Gutenberg project.

https://www.gutenberg.org/ebooks/3300

 

[Loren Pechtel]

And that market wage isn't necessarily tied in any way to the value of the work they perform it's instead tied to how easily the firm can replace them.

The value of the work they produce is most certainly relevant.

A company will hire a worker to do <x> if the value of <x> is greater than the cost of hiring the worker + a reasonable risk premium.

If there was no such relationship there would be no unemployment other than of those utterly unsuitable as employees.

- - - Updated - - -

They are paid on a combination of factors, one of which is how many people are willing to do the work. But they are also paid on how much marginal utility someone sees in paying for that job.

Ridiculous. I've been involved with hiring and firing people for a long time and "marginal utility" has never entered into the equation and has never been brought up to me by a superior to use in making my hiring decisions.

And why would it be brought up? Utility counts for whether you'll be hiring someone in the first place, not who you hire. Unless you decide the number of people to hire it's not relevant.

 

[Axulus]

You have not defined it - the way you are using the term is inconsistent and incoherent.

A worker is "more valuable" to a company if they can produce more product. You are thus saying that value = productivity.

Yes.

Then you say that having products and services to sell is "highly valuable". Having products and services to sell is highly productive?!? That's incoherent.

Well, what do you call the importance to a company of having products to sell? I'd say they find that a highly desirable state of affairs and thus it has value to them.

It's going to depend on a lot of things - having something for sale is a necessary but not sufficient condition to make a profit. Having a good workers is desirable but that doesn't mean that every worker is highly desirable. Some of them might be mediocre but they get the job done for a reasonable price and are thus acceptable.

 

[Togo]

The value of the work they produce is most certainly relevant.

A company will hire a worker to do <x> if the value of <x> is greater than the cost of hiring the worker + a reasonable risk premium.

If there was no such relationship there would be no unemployment other than of those utterly unsuitable as employees.

- - - Updated - - -

They are paid on a combination of factors, one of which is how many people are willing to do the work. But they are also paid on how much marginal utility someone sees in paying for that job.

Ridiculous. I've been involved with hiring and firing people for a long time and "marginal utility" has never entered into the equation and has never been brought up to me by a superior to use in making my hiring decisions.

And why would it be brought up? Utility counts for whether you'll be hiring someone in the first place, not who you hire. Unless you decide the number of people to hire it's not relevant.

I decide the number of people I hire. I've never had marginal utility enter into the equation either.

The amount they get paid gets decided by HR, based on market rate and skill set, and they have no idea what I intend to use them for, or how profitable that activity will be.

Certainly in the companies I've worked for, hiring is seen as strategic, rather than a function of marginal profit. This may be because, in practice, opportunity costs and strategic capabilities are more important than fairly minor wage differentials.

 

[ksen]

Chapter 4 was a short history on money and why it started being used.

I've got nothing much to comment on about that topic.

 

[Nice Squirrel]

Chapter 4 was a short history on money and why it started being used.

I've got nothing much to comment on about that topic.

I think he mentions that societies go through a barter phase which is incorrect according to archaeology and anthropology. They only barter with outsiders. It is now believed that governments are the ones that began using money for easier transfers of wealth. Or am I mischaracterizing what he said?

 

[ksen]

His focus is more on needing some sort of money system in order to really make division labor work. Because without money the only thing the laborer has to trade with is the surplus of what he makes that he doesn't consume himself and that won't always be acceptable to trade what his other needs and wants.

 

[Nice Squirrel]

But in more traditional societies, the laborer doesn't need to trade. If he makes all the shoes for the village and tills in the field, he doesn't need to make a surplus.

I think it is interesting how this beings to translate into the world where the shoemaker needs to produce and sell a surplus and society stratifies even more.

 

[Loren Pechtel]

The value of the work they produce is most certainly relevant.

A company will hire a worker to do <x> if the value of <x> is greater than the cost of hiring the worker + a reasonable risk premium.

If there was no such relationship there would be no unemployment other than of those utterly unsuitable as employees.

- - - Updated - - -

They are paid on a combination of factors, one of which is how many people are willing to do the work. But they are also paid on how much marginal utility someone sees in paying for that job.

Ridiculous. I've been involved with hiring and firing people for a long time and "marginal utility" has never entered into the equation and has never been brought up to me by a superior to use in making my hiring decisions.

And why would it be brought up? Utility counts for whether you'll be hiring someone in the first place, not who you hire. Unless you decide the number of people to hire it's not relevant.

I decide the number of people I hire. I've never had marginal utility enter into the equation either.

The amount they get paid gets decided by HR, based on market rate and skill set, and they have no idea what I intend to use them for, or how profitable that activity will be.

Certainly in the companies I've worked for, hiring is seen as strategic, rather than a function of marginal profit. This may be because, in practice, opportunity costs and strategic capabilities are more important than fairly minor wage differentials.

You made the call as to how many people you need to accomplish the task. The boss decided the task was worth accomplishing in the first place.

 

[Canard DuJour]

The value of the work they produce is most certainly relevant.

A company will hire a worker to do <x> if the value of <x> is greater than the cost of hiring the worker + a reasonable risk premium.

If there was no such relationship there would be no unemployment other than of those utterly unsuitable as employees.

- - - Updated - - -

They are paid on a combination of factors, one of which is how many people are willing to do the work. But they are also paid on how much marginal utility someone sees in paying for that job.

Ridiculous. I've been involved with hiring and firing people for a long time and "marginal utility" has never entered into the equation and has never been brought up to me by a superior to use in making my hiring decisions.

And why would it be brought up? Utility counts for whether you'll be hiring someone in the first place, not who you hire. Unless you decide the number of people to hire it's not relevant.

I decide the number of people I hire. I've never had marginal utility enter into the equation either.

The amount they get paid gets decided by HR, based on market rate and skill set, and they have no idea what I intend to use them for, or how profitable that activity will be.

Certainly in the companies I've worked for, hiring is seen as strategic, rather than a function of marginal profit. This may be because, in practice, opportunity costs and strategic capabilities are more important than fairly minor wage differentials.

You made the call as to how many people you need to accomplish the task. The boss decided the task was worth accomplishing in the first place.

And neither that firm nor its boss has set wages according to the marginal utility of any worker to that firm. If going wage rates push costs over revenue so the task isn't worth doing, the market has made a determination of the marginal utility of the firm's product. Higher wages, then, aren't necessarily a detriment to production since we're talking about the market as a whole and one man's spending is another's wage. IOW we can't assume one unique equilibrium where a supply curve intersects a static or independently varying demand curve.

 

[Loren Pechtel]

The value of the work they produce is most certainly relevant.

A company will hire a worker to do <x> if the value of <x> is greater than the cost of hiring the worker + a reasonable risk premium.

If there was no such relationship there would be no unemployment other than of those utterly unsuitable as employees.

- - - Updated - - -

They are paid on a combination of factors, one of which is how many people are willing to do the work. But they are also paid on how much marginal utility someone sees in paying for that job.

Ridiculous. I've been involved with hiring and firing people for a long time and "marginal utility" has never entered into the equation and has never been brought up to me by a superior to use in making my hiring decisions.

And why would it be brought up? Utility counts for whether you'll be hiring someone in the first place, not who you hire. Unless you decide the number of people to hire it's not relevant.

I decide the number of people I hire. I've never had marginal utility enter into the equation either.

The amount they get paid gets decided by HR, based on market rate and skill set, and they have no idea what I intend to use them for, or how profitable that activity will be.

Certainly in the companies I've worked for, hiring is seen as strategic, rather than a function of marginal profit. This may be because, in practice, opportunity costs and strategic capabilities are more important than fairly minor wage differentials.

You made the call as to how many people you need to accomplish the task. The boss decided the task was worth accomplishing in the first place.

And neither that firm nor its boss has set wages according to the marginal utility of any worker to that firm. If going wage rates push costs over revenue so the task isn't worth doing, the market has made a determination of the marginal utility of the firm's product. Higher wages, then, aren't necessarily a detriment to production since we're talking about the market as a whole and one man's spending is another's wage. IOW we can't assume one unique equilibrium where a supply curve intersects a static or independently varying demand curve.

The firm decided it could make money by hiring people to do <x>. That is determining the marginal utility of <x> even though it's not put in those terms.

 

[Canard DuJour]

The value of the work they produce is most certainly relevant.

A company will hire a worker to do <x> if the value of <x> is greater than the cost of hiring the worker + a reasonable risk premium.

If there was no such relationship there would be no unemployment other than of those utterly unsuitable as employees.

- - - Updated - - -

They are paid on a combination of factors, one of which is how many people are willing to do the work. But they are also paid on how much marginal utility someone sees in paying for that job.

Ridiculous. I've been involved with hiring and firing people for a long time and "marginal utility" has never entered into the equation and has never been brought up to me by a superior to use in making my hiring decisions.

And why would it be brought up? Utility counts for whether you'll be hiring someone in the first place, not who you hire. Unless you decide the number of people to hire it's not relevant.

I decide the number of people I hire. I've never had marginal utility enter into the equation either.

The amount they get paid gets decided by HR, based on market rate and skill set, and they have no idea what I intend to use them for, or how profitable that activity will be.

Certainly in the companies I've worked for, hiring is seen as strategic, rather than a function of marginal profit. This may be because, in practice, opportunity costs and strategic capabilities are more important than fairly minor wage differentials.

You made the call as to how many people you need to accomplish the task. The boss decided the task was worth accomplishing in the first place.

And neither that firm nor its boss has set wages according to the marginal utility of any worker to that firm. If going wage rates push costs over revenue so the task isn't worth doing, the market has made a determination of the marginal utility of the firm's product. Higher wages, then, aren't necessarily a detriment to production since we're talking about the market as a whole and one man's spending is another's wage. IOW we can't assume one unique equilibrium where a supply curve intersects a static or independently varying demand curve.

The firm decided it could make money by hiring people to do <x>. That is determining the marginal utility of <x> even though it's not put in those terms.

No and not really.

Whether a firm can make money from <x> depends on market conditions which it does not "decide". Say a firm ascertains that consumers will pay $10 each for widgets which take an hour each to make. If the going rate for widget makers isn't less than $10/hr, the marginal utility of the worker to that firm is neither here nor there. Conversely, if the going rate is substantially less, a profit maximising firm won't pay any more. In neither case is the wage determined by the worker's marginal utility to that firm.

The conditions are determined in the sense of caused or specified by the market and determined in the sense of discerned or ascertained by the firm. You're equivocating the two.

 

[coloradoatheist]

The value of the work they produce is most certainly relevant.

A company will hire a worker to do <x> if the value of <x> is greater than the cost of hiring the worker + a reasonable risk premium.

If there was no such relationship there would be no unemployment other than of those utterly unsuitable as employees.

- - - Updated - - -

They are paid on a combination of factors, one of which is how many people are willing to do the work. But they are also paid on how much marginal utility someone sees in paying for that job.

Ridiculous. I've been involved with hiring and firing people for a long time and "marginal utility" has never entered into the equation and has never been brought up to me by a superior to use in making my hiring decisions.

And why would it be brought up? Utility counts for whether you'll be hiring someone in the first place, not who you hire. Unless you decide the number of people to hire it's not relevant.

I decide the number of people I hire. I've never had marginal utility enter into the equation either.

The amount they get paid gets decided by HR, based on market rate and skill set, and they have no idea what I intend to use them for, or how profitable that activity will be.

Certainly in the companies I've worked for, hiring is seen as strategic, rather than a function of marginal profit. This may be because, in practice, opportunity costs and strategic capabilities are more important than fairly minor wage differentials.

You made the call as to how many people you need to accomplish the task. The boss decided the task was worth accomplishing in the first place.

And neither that firm nor its boss has set wages according to the marginal utility of any worker to that firm. If going wage rates push costs over revenue so the task isn't worth doing, the market has made a determination of the marginal utility of the firm's product. Higher wages, then, aren't necessarily a detriment to production since we're talking about the market as a whole and one man's spending is another's wage. IOW we can't assume one unique equilibrium where a supply curve intersects a static or independently varying demand curve.

The firm decided it could make money by hiring people to do <x>. That is determining the marginal utility of <x> even though it's not put in those terms.

No and not really.

Whether a firm can make money from <x> depends on market conditions which it does not "decide". Say a firm ascertains that consumers will pay $10 each for widgets which take an hour each to make. If the going rate for widget makers isn't less than $10/hr, the marginal utility of the worker to that firm is neither here nor there. Conversely, if the going rate is substantially less, a profit maximising firm won't pay any more. In neither case is the wage determined by the worker's marginal utility to that firm.

The conditions are determined in the sense of caused or specified by the market and determined in the sense of discerned or ascertained by the firm. You're equivocating the two.

I'm confused. If a company is selling a widget for $10/hr but it costs the company $12/hr for the widget maker, would they hire that person?

 

[Canard DuJour]

The value of the work they produce is most certainly relevant.

A company will hire a worker to do <x> if the value of <x> is greater than the cost of hiring the worker + a reasonable risk premium.

If there was no such relationship there would be no unemployment other than of those utterly unsuitable as employees.

- - - Updated - - -

They are paid on a combination of factors, one of which is how many people are willing to do the work. But they are also paid on how much marginal utility someone sees in paying for that job.

Ridiculous. I've been involved with hiring and firing people for a long time and "marginal utility" has never entered into the equation and has never been brought up to me by a superior to use in making my hiring decisions.

And why would it be brought up? Utility counts for whether you'll be hiring someone in the first place, not who you hire. Unless you decide the number of people to hire it's not relevant.

I decide the number of people I hire. I've never had marginal utility enter into the equation either.

The amount they get paid gets decided by HR, based on market rate and skill set, and they have no idea what I intend to use them for, or how profitable that activity will be.

Certainly in the companies I've worked for, hiring is seen as strategic, rather than a function of marginal profit. This may be because, in practice, opportunity costs and strategic capabilities are more important than fairly minor wage differentials.

You made the call as to how many people you need to accomplish the task. The boss decided the task was worth accomplishing in the first place.

And neither that firm nor its boss has set wages according to the marginal utility of any worker to that firm. If going wage rates push costs over revenue so the task isn't worth doing, the market has made a determination of the marginal utility of the firm's product. Higher wages, then, aren't necessarily a detriment to production since we're talking about the market as a whole and one man's spending is another's wage. IOW we can't assume one unique equilibrium where a supply curve intersects a static or independently varying demand curve.

The firm decided it could make money by hiring people to do <x>. That is determining the marginal utility of <x> even though it's not put in those terms.

No and not really.

Whether a firm can make money from <x> depends on market conditions which it does not "decide". Say a firm ascertains that consumers will pay $10 each for widgets which take an hour each to make. If the going rate for widget makers isn't less than $10/hr, the marginal utility of the worker to that firm is neither here nor there. Conversely, if the going rate is substantially less, a profit maximising firm won't pay any more. In neither case is the wage determined by the worker's marginal utility to that firm.

The conditions are determined in the sense of caused or specified by the market and determined in the sense of discerned or ascertained by the firm. You're equivocating the two.

I'm confused. If a company is selling a widget for $10/hr but it costs the company $12/hr for the widget maker, would they hire that person?

No but other companies selling widgets at >$12 would if that's the going rate. Some firm might induce consumers to buy more widgets or gain market share at $10, hence a marginal value of widget making to that firm of <$10, but that doesn't determine what a widget maker will work for. The market does that and the demand for widgets is positively correlated with wage levels.