Comments on: How do we tell what something is worth? http://stephenmonrad.com/blog/economicsidea/how-do-we-tell-what-something-is-worth/ The blog is about alternative economics and the book I am writing about my economic ideas. Mon, 12 Apr 2010 04:35:30 -0700 http://wordpress.org/?v=2.8.6 hourly 1 By: Stephen Monrad http://stephenmonrad.com/blog/economicsidea/how-do-we-tell-what-something-is-worth/comment-page-1/#comment-2583 Stephen Monrad Fri, 02 Oct 2009 00:26:33 +0000 http://stephenmonrad.com/blog/?p=548#comment-2583 Eric. I think the fundamental problem is that we don't know the value of either inputs or outputs. Eric.

I think the fundamental problem is that we don’t know the value of either inputs or outputs.

]]> By: Eric Monrad http://stephenmonrad.com/blog/economicsidea/how-do-we-tell-what-something-is-worth/comment-page-1/#comment-2579 Eric Monrad Thu, 01 Oct 2009 21:35:26 +0000 http://stephenmonrad.com/blog/?p=548#comment-2579 Stephen, I'm trying to clarify this in my mind. I see two underlying questions. 1. Do we want to pay people based on value or based on cost? 2. How do we approximate value or cost and what mechanism can we use to set prices? Are you saying that we DO want to pay people based on value, but that it's hard? Or are you saying that we should forget about value and pay based on cost? I agree that it's hard to establish value and that there are weaknesses in using a market system to approximate "value". However, basing prices on costs would be a worse approximation of value, I think. Eric Stephen,

I’m trying to clarify this in my mind. I see two underlying questions.
1. Do we want to pay people based on value or based on cost?
2. How do we approximate value or cost and what mechanism can we use to set prices?

Are you saying that we DO want to pay people based on value, but that it’s hard? Or are you saying that we should forget about value and pay based on cost?

I agree that it’s hard to establish value and that there are weaknesses in using a market system to approximate “value”. However, basing prices on costs would be a worse approximation of value, I think.

Eric

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