Introduction to Economics – Part 2 – Murray N Rothbard

Part 2.

Introduction to Economics: A Private Seminar with Murray N. Rothbard

Rothbard continues the Crusoe analogy. He covers subjectivity of value, and the concept of marginal utility.

Part two of seven from Introduction to Economics: A Private Seminar with Murray N. Rothbard.

This lecture as a Podcast: http://enemyofthestate.podomatic.com/

Sourced from: https://mises.org/library/introduction-economics-part-2

Source: Introduction to Economics – Part 2 – Murray N Rothbard – YouTube

http://www.readrothbard.com/introduction-to-economics-part-2-murray-n-rothbard

TRANSCRIPT

00:00
the definition an entity consisting of
00:02
in homogeneous units does that apply to
00:08
the concept in the shed ice is a good
00:11
that means that all ice is a good any
00:14
specific unit of lifestyle can be a
00:16
different good for many other specific
00:18
you the device but it requires somebody
00:25
desires dump unit before you can even
00:28
determine that it’s only when it’s in an
00:30
unused or undesired state that they are
00:33
in fact the same yeah right about
00:51
centers used to it’s like you didn’t
00:53
even know generally you want to take it
00:55
these folks to characteristically route
00:58
so it’s not just a physical Akitas yes
01:00
or water for example is essential or
01:07
let’s take another example you see
01:09
Carolus tariffs are let’s say a need on
01:13
another scene II usually we haven’t got
01:15
the law of diminishing market really
01:16
yeah what’s coming is there teetering on
01:18
usually them if you have a supply of
01:20
something again one more unit you value
01:23
with less than the previous unit so have
01:25
four eggs you’re writing the fifth thing
01:26
less than or for the other for however
01:29
is closing and he’s five makes them make
01:31
it King you can’t make it taken up for I
01:33
think my cake baking sheet ground here
01:36
anyway if you get the fifth thing you
01:38
make you can so if you can then manually
01:40
fifth thing one of the biggest or I can
01:42
pay more for it because all right guys
01:44
now I’m going to cake
02:24
well does but it’s berries see some
02:33
personal might not doesn’t care about
02:34
the ambience won’t go to obviously
02:46
molecule exactly each other but what
02:52
what are the units in the ice cream this
02:56
ice cream parlor and the audience what
02:59
what I like each other
03:01
I mean it doesn’t look like he was like
03:04
oh yeah the ice cream in the gluten test
03:09
when ice cream in Swenson oh I skated
03:12
Bosch and
03:14
and the point is you’ve got an homage to
03:16
the tune is actually saying only one
03:18
unit because there’s more than one unit
03:19
in this no there’s not only the young
03:22
yacht there’s none under the ice cream
03:24
there’s also the thickness of a carpet
03:26
the number of is couple of ways the
03:32
second unfortunate ice cream would be
03:34
enough so is it good multiple good
03:38
sometimes it could be simply dividual
03:41
goods as well what the criteria is
03:52
whatever transaction is in trouble for
03:55
this if the people believe that their
03:58
homogeneity language oh but somebody
04:04
else is observing it from outside and
04:05
you say that they’re either our hobby
04:07
geniuses the people involved in the
04:09
transaction don’t see it that way or
04:11
finally they might say those are not
04:14
companies the personable it’s the people
04:17
involved in the transaction their view
04:19
of the transaction that’s important
04:21
their view of whether the goods or
04:23
opportunities are not not what any
04:25
external observer season what you’re
04:28
trying to what seems to be going on here
04:32
is people are trying to use this
04:34
definition as an objective definition
04:36
get my objective that
04:39
whether full
05:55
nice screen – at Swenson unit you have
05:59
one portion second portion and third
06:01
portion
06:02
how much how many should you buy you’re
06:04
coming with us there’s only a third
06:06
torch let’s say these they like whether
06:07
they come to the point where you don’t
06:10
buy it
06:12
the important point is just general what
06:14
you mean by the word Goods when you’re
06:17
speaking and that’s different that we
06:24
know what you’re making when you’re like
06:25
we’re good friend I understand that it’s
06:27
different than it isn’t the same as
06:34
Coase theorem now Pretty Vacant support
06:38
public choice again are Maxima alleged
06:40
free market economists and theorem is
06:44
apart some of them it’s that that if
06:50
well he hit this the actual example of
06:53
comes to the famous art for the 15 years
06:54
ago a railroad was trimming along and
06:59
locomotive this pouring out of smoke
07:01
whitening orchards around at the farms
07:05
and the the question is these are costs
07:09
when the words repeat and railroads are
07:11
closing on the farms and according to
07:16
coast people with Cosi ins public choice
07:18
people it’s important with somebody to
07:20
pay the costs and the words that so for
07:22
externality or external cost the regular
07:24
owners are closing on their farmers and
07:27
they field that doesn’t matter which
07:30
whether I want whether we’re will has to
07:34
pay those farmers and the farmers have
07:35
to pay the railroad stop in other words
07:37
they don’t they don’t care what property
07:39
right the farmers property like to be
07:41
injured or the rare ones property lies
07:43
in the smoke and doesn’t that performers
07:45
have to pay them off to stop stop to
07:47
smoke that’s of course
07:48
the theory property rights but the
07:50
basics before I’m going to focus on now
07:52
is their view was okay let’s say where I
07:55
said where was was the compensation
07:56
former well then compensate that the
08:01
market price so you have an orchard
08:03
which of the story about smoke as the
08:05
market prices ten thousand dollars where
08:07
what people often seven thousand dollars
08:08
that’s it takes care of it
08:10
he wants me to be a lot of visits but
08:12
there’s with the the values of the
08:14
former might not be the ten thousand
08:15
dollars might be prior outside you might
08:17
love that I worked reduce or to came
08:19
that let’s random on the value of him
08:21
there’s a lot more that really
08:22
compensated where we have to pay a lot
08:25
more news lately expropriating the rules
08:27
which my toes
08:28
exactly there’s no way to evaluate
08:30
exactly the other thing is and that’s
08:31
the interesting thing here so the Wall
08:33
Street position isn’t that you can’t
08:35
evaluate to some market prices the
08:36
valuations of their each individual
08:38
different value and the interesting
08:39
thing is you can’t know what the value
08:40
is
08:41
you see because the old lady is saying
08:42
this I love this house so much I need a
08:44
million dollars there’s no way that’s
08:46
actually might be a wire no way to say
08:47
it could it could be priceless there’s
08:52
no reason I can’t right so nobody
08:54
rightness this is not a voluntary market
08:55
transactions no way to figure out what
08:57
this person needs you only wait will it
08:58
do you somehow go back in time make your
09:00
offers from those and that market
09:02
situation say what you can sign it what
09:04
you could take decisive but this see
09:05
this whole theory well suppose we’re
09:07
offering Atomics of the government
09:09
messes people off confiscates on land
09:11
and what I run a compensation on the
09:13
basis of what these think of the proper
09:14
compensation programs agents overall
09:16
objective basis okay the brand-new was
09:19
a-telling fine I’ll pay you like that
09:21
you can’t do that we don’t know what the
09:23
person value what subjective writing at
09:25
this time the issue
10:07
recently I don’t think I mean the judge
10:17
or awkward traitor or Bullock and make
10:19
some Congress that’s talking about
10:22
parties there’s no there’s no scientific
10:25
assess precisely accurate way that’s way
10:32
you can other words but so you know the
10:38
judge the arbitrator might do that
10:39
doesn’t mean you know the person’s value
10:41
scale see what we’re doing here we’re
10:55
talking about there’s a science of
10:57
economics of discipline theory than does
10:59
the art which is applying it and
11:01
scientifically did say to find a good
11:04
like this we can talk about or the
11:05
missing so the owns other stuff applying
11:07
it as an ARCA since that the person
11:10
wants to apply that a story in a pass or
11:12
forecast of the future or an economist
11:14
analyzing the current situation you’ve
11:16
got in to say well I think this is a
11:18
good right other words I think I seem
11:20
really good except for the case you
11:22
slice it or whatever you sort of make we
11:23
make these judgments but they can be
11:25
fallible because there’s no way
11:26
precisely say that it’s a good if you’re
11:29
applying this in the real world so the
11:32
the art of economics quite a judgment
11:35
for her ship in a sense
11:37
it’s not the same tomorrow site signs of
11:40
theoretical structure so a good is
11:46
available for sale
12:43
that Gordon talked to distinguished
12:47
public choice theorists electrifying
12:49
market Dean Gordon mr. Gordon Tullock
12:52
was now George Mason oh man how I came
12:57
up endless because notice the our deal
13:00
tax Wow yeah I mean just so tall I can
13:28
imagine Kingman in the penalty that was
13:29
a long poem Society meeting which is a
13:31
group of relatively free market
13:34
economists now he’s very worried I’d be
13:36
funny to the writer for the Trudeau so
13:41
any arising out Gina talking about
13:46
mysteriously this is the perfect actress
13:47
is the voluntary tax my deal tax where
13:52
you get everybody an assessor property
13:54
taxes your property and in pay up that’s
13:56
whatever taxes on it and there’s a tax
13:59
assessor property in $20 to pay very
14:02
little tax within the government either
14:03
the government you have to sell it to
14:05
the government or the next person who
14:06
comes along and that that price you
14:11
don’t want to stop something that really
14:12
twice until you see I said yeah two
14:13
billion dollars on then you have to pay
14:17
it so poor professor high act is now a
14:20
little bit leaner it was living Austrian
14:23
economist somewhat my case I it was
14:26
precious library what was the library
14:27
10,000 books or whatever and that means
14:30
you want to say my lab right has a value
14:32
at two million dollars I would never go
14:34
to the poorhouse
14:35
and the answer loans who cared about no
14:36
library that was the rates the whole
14:38
thing market my client library so that’s
14:43
the difference between the property
14:44
rights approach
14:59
okay any question is against my point
15:17
you leave bubbly activity humor or
15:19
whatever so that stuff Mary moon asked
15:23
me well what if you have 20 ice cream
15:26
cones door same not daily different a
15:28
sense that one isn’t different occupied
15:30
slightly different space to the left of
15:34
the other one but the point view of the
15:35
consumer than with a care the rest
15:37
payments on movies at Phoenix or
15:42
everything over the store so against on
15:44
the point of the whole thing is a point
15:45
of view of the actor the actual person
15:46
doing almost it’s not for point
15:48
molecular physics or objective property
16:01
an approximation because there’s no way
16:06
physically different things can ever be
16:09
the same
16:09
any value is that even if the same
16:11
waitress comes along and hands on a
16:13
second ice cream cone it’s August
16:15
isn’t that a different time is the
16:17
deprivation in cohesive butter feel
16:20
different is yeah you might you are
16:23
different that time I feel exactly the
16:25
same but I could apply it and apply it
16:29
to the empirical situation applied
16:33
economists so to speak and then you have
16:35
to make it
17:04
the closer you get to make that purchase
17:07
fewer homogeneous there are good until
17:11
you make that final choice and now it is
17:13
not just anyone it’s the one you thought
17:44
well that’s one of the purpose I don’t
17:46
think it’s the only first purpose is
17:50
that true body of knowledge we can pull
17:52
up an analysis of the system then it
17:56
turns out however they have political
17:58
applications almost dual purpose any
18:07
right to press on the given the
18:12
homogeneous units let’s say Bob we’re
18:17
and while the great masters lost in
18:18
economics I shouldn’t mention who they
18:20
are
18:22
a commoner I’m 11 founder economics
18:39
University Vienna and therefore oh this
18:46
book 18 1871 econometric just different
18:56
translations foundation to begin on mix
18:57
whatever so this is his great student
19:10
assignment Lincoln on boom ba bap
19:24
also succeeded him University me and
19:27
I’ll continue also talking perceive EMEA
19:29
growth is great recipes capital and
19:31
interests which goes into the price
19:33
theory as well almost on an agility
19:35
price theory also to some ballparks take
19:52
this example is horses unison horses
19:57
what you do how much you lost a certain
20:19
group of logs and you can use it for new
20:24
members see me here music for many many
20:26
different uses like the same unit of
20:29
stuff and use them of different uses
20:31
they got propane as a priority of
20:32
useless most important lots of money
20:35
it’s cooking tonight’s final ticket have
20:37
meat which is not second second rank if
20:56
he has another another some of the logs
20:58
is I’ll say adding attention it was law
21:02
camera billing of law
21:09
third-ranked might be storing the bar
21:14
next part is that such luck around Trump
21:18
what tomorrow so take a restaurant okay
21:21
so you have a little bit of savings here
21:35
around this thing so you can happen keep
21:37
the Wolves out of my head the order of
21:46
priorities here already and fit
21:48
something if you always one of the dudes
21:50
will get to eventually the building a
21:51
boardwalk on the beach almost kind of
22:12
headaches operating Atomics by people
22:15
claiming to measuring lists whatever saw
22:17
the one who set ABC West Center
22:19
graphical order right this is strictly
22:21
ordinal ranking of them and so now the
22:27
point is less if he loses one let’s see
22:29
how these final they or anybody can do
22:32
this first a second second Center one
22:34
washes away tie the way it comes in
22:36
Washington ago
22:37
sense of law which uses he didn’t get
22:40
robbed he’s obviously give up the
22:41
lowest-ranking you he’s not going to
22:43
give this talk there’s only four sort of
22:46
five they portray that he’s gonna give
22:48
up the boardwalk a couple of weeks or
22:52
something so he gives up then he has
22:54
five sets of logs will give up his
22:57
supply is five supply being the finest
23:00
your stock amount available homogeneous
23:03
units supply it’s fine and so he gives
23:07
up he loses the one of these logs it
23:10
doesn’t give up Lisa gives up at least
23:12
important use to him just
23:15
so the other hand he’s got only two sets
23:18
of logs when one Washington why he loses
23:20
it even give up the second is I’d keep
23:22
the first ball
23:23
so we conclude from this the more the
23:28
more logs he’s got good lower the value
24:27
lead to unit and of course conversely
24:35
when the supply of leg does another coin
24:41
and School Admission more utility for
24:45
vacuous cold utility and where marginal
24:51
comes in as breakfast anyway marginal
24:57
means at the more junior considering the
24:59
next group of laws about the dippity
25:01
this is very nice portion of my screen
25:03
whether to buy it or not so late so
25:05
people act in the real world in terms of
25:07
units so so the technical Volga Nizhny
25:10
markings
25:17
the one of those four pieces for the
25:21
sleepless this before Adam Smith is a
25:25
matter of economics really wasn’t as a
25:27
whole other stick the I’m sure you all
25:32
heard that name in England Smith wrote
25:35
this thing as Wealth of Nations in 1776
25:37
Scotsman and for various reasons
25:43
sure math and guess that Smith sort of
25:47
family you know which role in economics
25:48
back over the economics to have a big
25:50
step backward after global nation French
25:53
very stretchy ponde list examine and
25:55
scholastic media most Lasky he promised
25:58
a continent I already discovered almost
25:59
this is welcome on television market
26:01
over they had another margin part
26:03
they’ve got everything else pretty well
26:04
set anyway lovely wait in the supply
26:06
will go go the muscle evaluate beating
26:08
that terms of units really use the last
26:11
corner stone stone the edifice so before
26:16
says the generalist figurative the
26:18
valuing we’re gonna market pricing good
26:19
mark is the terminal you Charlie in a
26:22
supply how much is available and how
26:24
much people will evaluate if you have
26:27
reader supply will be value less Smith
26:32
himself says teachers Scott on Hutchison
26:35
that’s as much as also had the same view
26:37
I spent them softens previous writings
26:39
twenty years before that unpublished
26:40
lectures also happen and this the well
26:42
the nation be 200 years backward he says
26:46
you can’t figure anything things
26:48
diamonds bread macaques
26:50
we’re dining with water paradox some
26:53
some whole paradox in venue and mended
26:55
my Smith
26:58
like most paradoxes problem products of
27:03
anyone says looking says we have bread
27:06
bread is a stack of life it’s extremely
27:09
useful it’s people dialing out
27:11
tremendously useful philosophically
27:13
magnificent and yet the other markets
27:15
great sheet
27:19
so then the other I say heaven
27:22
brendensen has a high user value Brad my
27:27
value and let me have diamonds I’m there
27:34
for you every important all right and
27:36
why this occurred the Calvinist
27:40
Presbyterian tended to be against the
27:42
consumption anyway suctioning diamonds
27:45
are every sinful and here’s simple
27:50
language we chase that has nobody’s
27:52
whatsoever actually some at zero you
27:55
smacking farmers are very expensive
28:02
they’re highly L’Amour this is a paradox
28:07
how come
28:08
rectify these binding low exchanging
28:11
value the price of the market em
28:14
exchange and yet diamonds of zero is
28:20
almost very negligible is that happens
28:22
very high he said he couldn’t solve this
28:28
and therefore he just drop site says
28:31
this is it eager and as analysis
28:32
consumption and his humors brought back
28:34
the classical economics between Smith
28:36
Ricardo a million great Brittany it’ll
28:40
talk about consumers where they can’t
28:41
figure out some paradoxes and
28:43
peculiarities of the market screening
28:45
engine Amelie or whatever so this of
28:48
course leaves total hostage open to
28:50
socialize Alexis later on let’s see mm
28:53
well anyways more aggravating than Mark
28:56
see that money said look coins the idea
29:00
is two kinds of production production
29:03
for you so erection for profits there is
29:05
production for profit you both or change
29:07
matters of market values as production
29:10
for uses we will be producing what
29:11
people really use it need need
29:13
so this this some of the economy can
29:16
uses and market of shame back which
29:18
extremely pernicious whether colonial
29:21
history
29:21
social sport okay what was the
29:25
resolution of the paradox which repeated
29:27
predecessors and spending softly
29:28
essentially riding that basically is
29:33
listen we don’t real world system family
29:36
Austrian program looks at the individual
29:38
reacting individual how he or she
29:39
chooses we we don’t choose classes of
29:43
goods you don’t sit around as
29:44
philosophers say which is more important
29:46
to mankind rhetoric violence then choose
29:49
between them right at the better
29:50
that’s not the way that’s not the sort
29:53
of choices were confronted with on the
29:54
morning if and the angel Gabriel came
29:57
now is one of my examples like the other
30:06
TVs said first things you’re not
30:08
presentable in choice I’m not as much of
30:10
this choice for now on you have to give
30:12
up either all the bread on the world now
30:14
and forever also probably most of them
30:17
to say let’s give up diamonds I want
30:19
useful on this full of effector some
30:22
whole Sciences thoughts but we not
30:24
confront of that kind of a choice of
30:26
choice work in front of the market is
30:27
how much we paid a loaf of bread
30:29
how should you pay for a diamond and so
30:31
in the market in other words we make
30:33
moral choices of units which is where
30:35
the marginal thing comes in ok again
30:41
welcome our conditioning market utility
30:43
so happens in this world that there’s a
30:46
lot of bread around ok as millions of
30:49
loaves of bread Wonder Bread silver cup
30:51
bridge form when I said that’s a try
30:54
pumpernickel outside never dying right
30:58
have simple diagram look at this we have
31:00
Argentina Chile or whatever value and
31:04
quality the exercises and we have
31:10
we might start off we have only one loaf
31:11
of bread there might have much now some
31:15
enormous might be honest why not one of
31:20
them so big she wind up low exchange
31:24
value at least any given loaf they have
31:27
enormous appoints to 10-minute lows or
31:29
as a bread
31:30
therefore the each person invited each
31:32
locus fairly small the other hand
31:37
islands might be family one dime in the
31:40
world versus one piece Breton brettelmer
31:41
vegetables or brethren associate
31:44
diamonds around very scarce they do
31:47
something like that so we’re out here
31:48
and so that one carat of diamonds worth
31:52
a lot more the higher value of the
31:54
market a little threat so the relative
31:56
scarcity to things becomes the key to
31:59
the whole situation what you look at the
32:01
individuals mark Robin is still think of
32:04
this philosophic holistic fold up in
32:06
class
32:07
then you can solve a paradox and the
32:10
mystery why Smith yourself is sort of
32:13
see more like the funny in the forest
32:14
have enough of us I think Porter but I
32:17
don’t know the porter business is this
32:19
Presbyterian outlook mr. barrini there
32:24
should be useful catching the Sun well
32:30
again another way of that with water or
32:33
I would say it’s free there’s more or
32:35
less so well there’s so much of it did
32:40
you go to go to the fat and get water
32:41
not to pay for each each glass each
32:43
caucus
32:44
extremely abundant here someone however
32:47
you’re walking across the Libyan desert
32:49
and you have one canteen one cup of
32:52
enormous extremely important if how you
32:55
to million dollar the old life savings
32:57
in one cup it takes zero next to nothing
32:59
for it one cup here so because
33:06
everybody out there so they smear you
33:09
want to tell these girls so about those
33:12
ears these kinds of key thing here and
33:14
therefore and they so the value of a
33:16
market which was exchanging I which is
33:18
the price market because Charlie might
33:22
you think two forces at work here one of
33:26
the hold any given time supply price on
33:36
the y-axis now and quantity of the
33:40
x-axis and there’s quiet we’ve got a
33:46
sexually they don’t know exactly what it
33:47
is it can be anything or conceptually we
33:49
could find out too many of those of
33:51
Wonder Bread hundred thousand pounds of
33:53
peaches whatever we have demand of
33:57
evaluation determined by the
34:00
one-dimensional utility so that looking
34:06
at the rate of the supply unless the
34:09
lower will be the valuation will be the
34:11
price it’s also a common-sense way let
34:16
me into the standards utility how you
34:19
arrive at it at a higher price less will
34:22
be purchased a little mites more will be
34:24
purchases singing some one thing so this
34:29
is leagues a whole demand curve its how
34:32
much will be purchased and then given
34:34
price either by one person or by an
34:36
aggregate by all people on the market
34:37
all consumers to sum up if you have if
34:42
they’re five consumers thinking about
34:44
other why wasn’t wondering written
34:46
sexual at least arrived at you should
34:48
each individual’s demand curve commerce
34:51
dictated by anything twice and if some
34:53
guy some person might be a marginal
34:55
underbred person lonely boy if it gets
34:57
out of fifty cents a well if something
34:58
else might be a fanatic why
35:00
ten dollars a loaf why not this order
35:03
following the man so-called following
35:05
demand curve these are the two forces
35:09
which determine any company’s prices any
35:12
any product good or service on the
35:15
market
35:17
the young and these are the only two
35:20
forces attractive man for how much would
35:22
be purchased given point and the supply
35:27
of notice the amount available now this
35:30
gives us our famous thing this is the
35:31
mass supply curves I’ve been talking
35:34
about Friday night they’re going to take
35:35
too long my course applies of course to
35:39
bring in Friday for a cruise on Friday
35:41
exchange it support a little bit here
35:48
well look we could say in this sense
35:49
about exchange it’s important to say or
35:52
get price further that all the whole
35:56
market is like a latticework like a
35:59
spiderweb
36:00
– work millions of different unit
36:03
exchanges
36:13
so you have I have me buying this pepper
36:17
outside so I are exchanging 30 cents New
36:26
York climbing and this case where both
36:31
parties benefit like fur items by the
36:34
two values they are involved actually
36:36
there’s maybe I rank three cents every
36:44
time I write the new york times higher
36:46
than three cents
36:47
I put this in the record I haven’t
36:49
gotten yet it me just before I buy the
36:50
paper and looking his things up by I
36:53
would be better off slightly better off
36:55
of a higher utility where we want to
36:57
call if I spend three separately or
37:01
times like I abandon the or times higher
37:04
more highly honored by the 30 cents the
37:06
other hand a news dealer nicely the
37:12
opposite situation
37:13
he even he’s a pretty sensitive she
37:19
hasn’t got yet more highly than they are
37:21
trying to cut honey or kindness problem
37:24
unless he wants that money for it so he
37:27
doesn’t have here an exchange is the
37:28
unit exchange but the parties you better
37:30
off as we complete the exchange which is
37:33
a transfer of ownership I can expand
37:34
this it’s sort of like buying a house
37:37
that they have a notoriety you know I
37:39
hate to do that given the 30s not to use
37:42
the times that’s it don’t have a lawyer
37:45
either become peace and meaningless okay
37:49
so so I’m better off on a higher utility
37:55
I thought what am I getting in New York
37:57
Times I’m benefiting he’s been
37:59
three cents mutually beneficial exchange
38:01
both both parties to it go higher their
38:04
values snails will achieve their goals
38:08
and so we have here the conditions for a
38:12
successful exchanger to peopler to be
38:14
one long and to come to commodities
38:17
goods these cases to people I mean in
38:21
this deal the two goods of 30 cents or
38:23
times and you change these two things
38:26
both are off the mark the free market is
38:29
a lighthouse work begins leader changes
38:31
going on time star why somebody works
38:36
for IBM let’s say you’re selling your
38:39
labor service live and you’re getting
38:40
money you prefer getting money not
38:42
something like the service they prefer
38:44
getting labor servers and getting
38:46
keeping them money that’s each set of
38:49
cases they’re two people are in case
38:50
might be a group of people represented
38:52
by corporation and making this exchange
38:56
in each case that each person is a
38:58
better off for each you anything’s
39:00
better wrong so we have a situation of
39:02
the between marketing and email at the
39:04
efficiency the three more than one wants
39:05
to look and each step of the way he’s
39:07
brought in each person’s maximum on is
39:09
getting better and better
39:10
hi youtl each of each step transaction
39:15
in case you crucified each one is better
39:18
off flying fish would be so uh we
39:25
already have here so we possibly need
39:27
that assumes we need that for successful
39:29
exchange the reverse to equality of
39:31
valuable to people we needed for me
39:33
evaluate you two things differently okay
39:36
immoral and if both both of us prefer
39:39
thirty cents they are kind of the basis
39:41
for transaction I haven’t before the New
39:44
York Times of thirty steps by prefer
39:45
ladies by the same relative value scales
39:48
he’s got they don’t make any deal so we
39:51
have to find her trading exchange the
39:54
reverse inequality of value of values
40:05
the values of subjective they’re ordinal
40:08
or value scales of harm each individual
40:10
again once you state this it might seem
40:13
self-evident but this already wipes out
40:14
a huge amount of economics then after
40:26
you look out or even state it before
40:29
that so it happens is that example you
40:35
take Karl Marx that’s copy talk great
40:37
this dating book don’t have to be more
40:39
than first two pages because Prime’s
40:43
fallacy in the first couple of pages but
40:51
time fallacy which is to mostly genomic
40:54
fallacy most colleges are in the
40:56
assumption in the first couple of pages
40:58
less than spitting habit
41:01
so these stores almost all of the resume
41:04
there’s an exchange he doesn’t use a
41:06
newspaper whatever he says two things
41:08
exchange for each other once a pretty
41:10
central New York Times one pound of
41:14
bread for two thousand eight or whatever
41:15
okay so because they take for each other
41:18
says they must be equal and value so
41:23
that he says okay what is there about
41:30
station horses or whatever to get back
41:34
beyond money let’s say fishing horses or
41:36
eggs butter or whatever whatever what is
41:39
there these two products that they
41:41
wanted me holder the other but make them
41:44
eat what does that make them equal in
41:46
value any books piece of art can’t be
41:47
wait wait is totally different
41:49
can’t be volume is totally different it
41:52
winds up quantity of labor hours and
41:55
Bunny the two products that’s of course
41:58
also the second crazy solution plan is
42:01
the whole problem is posed incorrectly
42:03
it wouldn’t be exchanged if they were
42:05
you don’t base this brand-new shape whoa
42:07
they’re really equal why bother going
42:09
something cost the finding le on
42:11
exchanging it’s like it’s like saying I
42:13
have the nickel and the over there
42:15
gollancz said the numismatic ly the same
42:18
thing said both the same data set but no
42:20
point of me going on exchanging they go
42:21
for you earning some bizarre personal
42:25
reason generally is not really distant
42:28
southern pain in the neck so it’s a
42:29
wasted as well that natural transaction
42:32
costs are the point to it and so
42:35
exchanges are different fates two things
42:37
were really equal the wounded or beat
42:40
back exchange required this double
42:43
inequality so we get tossed out the
42:45
whole thing rest of the neck so that
42:47
maybe twice not just on that face of the
42:48
long the other leave the quantity later
42:51
almost this stuff so uh more a less
42:58
extreme version the classically Thomas
43:00
Smith Ricardo had a less extreme mana
43:02
they actually had some of that two marks
43:04
than many ways marks was of the server’s
43:06
a system Ricardian sniffing carrying
43:09
this thing this oddly inclusion one
43:12
bearings bender far as Anna plumbing
43:14
later our looking for some way everybody
43:16
that’s what’s the physical bodies value
43:19
another less extreme variant
43:21
I’m coming later on for Marshall was of
43:25
course the production post-production
43:26
must be the same the same quantity of
43:28
raw labor pain there’s also some ways of
43:30
looking at this they’re all fallacious
43:33
because of those been unequal
43:34
beginningless recognized even agree so
43:42
important consequences
43:48
okay getting back to racing price
43:50
determination supply and demand become
43:56
the team determines of the price and
43:57
then become this is not this Austrians
44:00
is generally accepted anyway while this
44:04
is a very huge district the market price
44:20
will be this will be very okay go great
44:54
quickly so the price is higher than us
44:58
this is peaches let’s say each of the 60
45:00
cents a pound of our pitas are about 60
45:02
sets of panelists that’s the equilibrium
45:04
price the price is higher then people
45:08
will only bind them thereby much less
45:10
than that’s 200,000 pounds valent fifty
45:13
thousand pounds
45:14
this will be an unsold surplus do they
45:18
think this has been pay is buying
45:20
something that I’m not having to be sold
45:23
you know Oh buddy buying some some
45:25
service climbs up in order in order to
45:27
eliminate young some of the surplus this
45:29
only wonderful thing these things are
45:31
piling up selling they cut your price as
45:33
you cut the price or as purchased from
45:37
filing on the home and get down on the
45:39
equilibrium price is no more on social
45:43
circles so the tendency of marketing
45:45
that is the white pad very quickly
45:47
unsold
45:47
process all you need to do it but
45:49
businessmen prefer to make money and not
45:51
losing money so for profit profit loss
45:54
motors
45:55
make money and not to lose expenses
46:06
you

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