Mark (et al), I am new to this discussion and am not an economist, so I find your presentation very edifying. However I am surprised by your finding of an obscenity [see Mark's posting below]. Simplistically it seems to me that you have 2 choices, make someone pay to pollute through regulations and fines or through taxes, or reward him for not polluting. Since in either case you are facing an issue of whether or not the end justifies the means, the best rule of choice is which is likely to work the most efficiently, or which is most easily reversable. Permit trading best satisfies both criteria. It may be obscene that people don't stop polluting simply to be ethical, but we have to accept that we live in a world of such obscenity and try to find workable solutions within the conditions of human reality. It's not the solution that's obscene, it's the cause. Regards Murray Duffin---- - --- In [EMAIL PROTECTED], "Mark Jones" <[EMAIL PROTECTED]: >>>The long and short of it is this: there are really only 2 theories of value in economics, and one says value is intrinsic in an object, ie, is actually in the eye of the beholder and in his/her willingness to bid accordingly on the market, this is neoclassicalism (the thing Jay Hanson loves to hate) and the other theory is that commodities have value because they embody someone's labour-time. The is the classical economics of David Ricardo (1772- 1823). Some people regard Marx as a 'minor post-ricardian' - Julien just said as much when he said Marx has a 'labour theory of value'. But this is wrong. The crucial difference between Marx and the classicals is that while Ricardo believed value was determined by embodied labour time, Marx added the crucial qualifier 'socially-necessary' labour time. In other words, if it takes me ten hours to make a shoe which a Korean makes in ten minutes, then my shoe is still only worth 10 minutes, however much time I personally spent on it. This modification by Marx enabled him to develop theories of markets, money, competition, and capital accumulation and, above all, a theory of the wage, which Ricardo et al were not able to do. Now, some people say that Marx and Ricardo were both half-right, in that labour-time does determine some, but not all, values. Julien says this. Many leftwing economists who are not marxists have some idea like this. If a waterfall increases the productivity of a mill, must it not be adding value? Is this value not captured by the rent accruing to the waterfall- owner? (I'm talking big brush, here, you get me! There are aircraft-hangar sized libraries full of dusty tomes on all this stuff). I think this is all a cop-out. You can't be one percent pregnant. Either you are a neoclassical utilitarian or some variant thereof, and utterly reject the labour theory of value (ltv), or you take the opposite view and regard any value theory as metaphysical mumbo-jumbo unless it is rooted in the hard, concrete world of toil, sweat, and labour. The waterfall- owner gets his rent not because of the natural value of the waterfall but by means of appropriating a part of the general pool of profit, and this general pool derives from the portion of labour-time skimmed off by the owners, the bosses. Without labour to make a go of it, a waterfall is just a beauty-spot. If one chap owns a waterfall and builds a mill, and nine other chaps grind their wheat by manual labour, the market price of wheat is determined by that preponderance of manual labour (the social average kind of labour in that industry). The watermill owner produces wheat more cheaply than that average because he needs less manual labour and has less costs; so he gets some surplus-profit. Some or all of thsi will go to the waterfall owner in the form of rent. A bit later the steam engine takes over milling, and suddenly the watermill is more expensive than the new social average, not cheaper, so the waterfal goes back to being a picturesque beauty spot and the millowner gets no more rent. I think this is all obvious. Over on pen-l, $100k pa economics professors argue 6 months at a time over this question and still can't agree. Objects have value not because they are scarce and because we desire them, but because they require more or less labour to extract, mine, mill, distribute etc. You simply don't need psychologisms of need or desire to explain how economies work. You can explain it all in terms of the division of labour between different branches of industry, ie the apportionment of labour-time by the actions of the market. There are alleged to be profound contradictions and anomalies in Marx's value-theory, in particular there are problems concerning the transformation of 'values' into 'prices'. The ins and outs of this are like (excuse me) the ins and outs of a cat's backside, but for what it is worth, I've been there, I have my Master's in economics from the London School of Economics so I'm as ready to be dogmatic about it as anyone and say that there are no contradcitions and that the famous Transformation Problem is a chimera. Of course, as you say, natural resources, biosystems, etc have "intrinsic value", but they don't have any ECONOMIC value (this is the whole of our problem with capitalist ecocide actually) and the proponents of 'natural capitalism' have got it plain wrong; you cannot make a monetary valuation of so-called 'ecoservices' without taking the essential madness and futility of economic theory to an ultimate limit. I've tried to argue this on the ecological-economics lists but these guys are totally hung up on their theory. I'm not saying Costanza, Cutler et al are not doing useful empriical stuff, they are, but I do say it is plain absurd when the 'natural- capital' thinkers try to put a monetary valuation on things which by *their own definition* (ie they are *natural*, ie, non-marketised, values) lie outside the markets and hence outside the only valuation system which actually exists; ie, these are exactly things that have no price, because they have no "value", economically-speaking. The fact that they are also *priceless* and are the whole basis of human life, just points to the intrinsic irrationality of capitalist economics, IMHO. What the theorists of 'natural capitalism' actually do is help legitimate the ultimate obscenity of carbon-emissions trading, ie, finding new ways to make a profit from burning up the planet. They do this by putting a notional financial 'value' on things like a carbon-free atmosphere, then working out the 'price' you pay someone for not putting more carbon up the chimney. I call this, paying off the hostage-taker, rewarding crime, and I don't like it.<<< _______________________________________________ Crashlist resources: http://website.lineone.net/~resource_base To change your options or unsubscribe go to: http://lists.wwpublish.com/mailman/listinfo/crashlist
