Intro to Economics 1/4(wealth,production,action,value,trade)

[movieman0222]

Thanks



[drfan2004]

The most incisive and indirect critique of socialism and the nanny state just within the first 2 minutes anywhere on youtube for a good while to come!

Keep up the good work, Mr Besada!

[capitalistworld]

Thanks for the encouraging comment!

[timothyjesus]

which state do you live in?

You accent is so cool.

[psikeyhackr]

He says making a car is creating wealth. He says cars wearing out is losing value. But that is DEPRECIATION and economists don't tell us what we lose in depreciation of cars every year.

How many people buy cars and don't know a crank shaft from a cam shaft? Can their brains objectively evaluate the technology? All of this talk about economics without mentioning depreciation and planned obsolescence with today's technology is nonsense.

Economic thinking has barely left the 19th century.

[stealthswimmer]

That's why new cars get created. However, it may depreciate in monetary value, but not necessarily in the value that the consumer has for it. Once it doesn't serve the consumer well enough, they have an incentive to replace it, just like business owners need to replace equipment from time to time. Plus, that's not the only product that is wealh...it's stuff in general that people want, like shoes, food, clothing, boats, paper, computers, whatever.

[psikeyhackr]

There have been 200,000,000+ cars in the US since 1995. So why can't the economists tell us was what the depreciation losses have been?

The point is that if it was possible to make machines that flew 400+ mph to fight WWII, what has been the point of redesigning cars every year since then? How much unnecessary depreciation has that caused?

You never heard of PLANNED OBSOLESCENCE?

[stealthswimmer]

because only part of depreciation is physical use. Another part of depreciation of cars is subjective value, since all value comes from the subjective values of consumers, as is shown by the theory of marginal utility. That's why used goods generally sell for less than new goods, when all other things are held constant.

[psikeyhackr]

That is only true in the early years of the cars life. It is eventually going to decline to scrappage value. So if economists were to calculate the depreciation of all of the cars sold in the 1960s the psychological factor would be filtered out.

They might as well just do straight line depreciation on all cars because the psychological factor merely changes the shape of the declining line from purchase price to scrappage value. In the long run the total decline is the same.

[stealthswimmer]

at any rate, they take account for that in a way because GDP doesn't allow double counting. Once something is counted once in the nation's product, it can't be counted again.

[psikeyhackr]

The avoidance of double counting is another issue entirely.

It is Net Domestic Product that is incorrect because of ignoring Demand Side Depreciation.

[stealthswimmer]

Is such a thing as Net Domestic Product counted? If it is, i'd imagine that the depcreciation would be taken into account because the lowered value of a product would be counted rather than holding it constant in price.

[psikeyhackr]

ROFLMAO

That is where the Lie of Omission is happening!

If you check economics textbooks you will find that NET DOMESTIC PRODUCT is only mentioned on one or two pages. They only define the depreciation as applying to CAPITAL GOODS.

But both Capital and Consumer Durables get added to GDP then only the Depreciation of Capital Goods gets subtracted to compute NDP. Do you let LIARS that can't do algebra tell you what to think?

Ignoring Consumer DEPRECIATION doesn't stop it.

Physics RULES!!!

[stealthswimmer]

actually, i've never even heard of NDP or read of it in a textbook. As far as I know, that statistic is never really even looked at.

As for consumer durables, they wear out sure but I'm pretty sure that would be taken into account because if things were to be counted, they get counted in terms of dollars...and a depreciated product is worth a smaller dollar amount.

[psikeyhackr]

Ain't that a curious thing? I never noticed it being mentioned in my college economics courses either.

But I read THE SCREWING OF THE AVERAGE MAN and decided that it made so much sense that there had to be something wrong with what I was taught. So I decided to read Samuelson's ECONOMICS cover to cover to find what made no sense.

So consumers buy stuff and it gets added to GDP but only the Capital Goods get subtracted to compute NDP.

The teachers don't tell us even though we pay them.

[stealthswimmer]

I'm pretty sure NDP doesn't get looked at all that often. That's probably the reason we don't hear about it so much. GDP numbers are more looked at because as long as there is per capita growth, it means more stuff for people to have and to replace old stuff with.

[psikeyhackr]

Notice that economists don't talk about the NET WORTH of the average American much either. The basic accounting equation is:

NET WORTH = Assets - Liabilities

But DEPRECIATION means the value of ASSETS goes down. That is what the lying moron economists are ignoring. They call it economic growth when we buy more replacement crap though.

Ever heard of PLANNED OBSOLESCENCE?

It could also be called PLANNED DEPRECIATION.

But the economists have to ignore it so consumers don't get wise.

[stealthswimmer]

Actually that is accounted for. I'm pretty sure it's taken into account on a yearly basis and thus the value of said assets are reassessed.

As for planned depreciation/obselescence, if people really wanted something that lasted longer, then it would be more profitable to make whatever product that lasted longer. Your ignorance of economics is really on display here.

However, we do have policies that give incentives for this behavior by raising costs of entry and impeding competition.

[crusader651]

Socialism is geared at satisfying people's need. not for profits. the process is simple, companies run at 0 profit, minimum profit or minimum deficit.

[stealthswimmer]

@crusader651

I don't think socialism is "geared at" anything. It's just the collective ownership of the means of production. Whatever it's geared for is determined by the people. If it were really geared at everyone's needs, well there's very little people need to survive. Food, water, shelter, and clothing are about it. A market is more efficient at providing that and more.

[crusader651]

@stealthswimmer luxury are considered needs. not the bare minimum. i disagree that the market satisfies those needs better than a collective ownership of the means of production. also i don't really understand how would libertarians implement a good school system, i don't think it would be easily affordable even though i know money has to come from somewhere. pardon me for wanting to tax the rich or the middle class but i think education is a place where the government has it's place.

[stealthswimmer]

@crusader651

Private schools costs a lot because people must pay taxes for public school whether they have kids in school or not and so any private school must be at least as efficient as the public school plus the value of the taxes that are paid to schools divided by the number of schools.

-no luxuries are not needs, but if you are going to say that they are all needs, then the market has overwhelmingly outperformed other systems. But a libertarian wouldn't oppose voluntary collectivism

[crusader651]

@stealthswimmer you mean they must pay tax for both public schools that their children are not attending and for private schools? i guess that makes sense, but won't those schools try to make a profit unlike public schools?

i have a question about left-libertarianism, i have even seen some of them being anti-capitalist ( which i find very strange) do you have any idea about this type? can libertarians declare a strike to be illegal like it happens nowdays?

[stealthswimmer]

@crusader651

Yes that's what I mean(that's how it currently works) and yes private schools will try to make profit. But profit is just revenue minus cost, it tells you nothing about price. I just explained why private schools tend to be pricier. Anyways, the government spends something like $5,000 per student on education. Parents could probably get better education for their children if the government simply cut them a voucher check that could be spent on tuition at a private school.

[stealthswimmer]

@crusader651

"i have a question..."

I'm personally not that familiar with left libertarianism especially since different folks use the term differently. As far as the anti-capitalist thing goes - they hold that capitalism in practice has simply been state capitalism and therefore we must oppose using the word "capitalism" to describe free markets or even "free market" in describing such a system because of what people think about those terms..I disagree with them, lol. As for strikes, i dunno

[psikeyhackr]

@stealthswimmer Aren't those assets referred to CAPITAL GOODS.

What happened to the depreciation of Durable Consumer Goods? Guess what, economists have not included that in their definition of NET DOMESTIC PRODUCT. Just check any economics book.

Economics is as much as the economists decide to tell us.

.

[stealthswimmer]

@psikeyhackr

What about it? GDP would count new stuff produced, but depreciation would be seen in the country's measure of total wealth. The issue is simply a matter of measuring that. Most economists agree that there are various measures of economic activity and living standards. There's no silver bullet, no one particular measure to focus on at all times.

Anyways, to the last point you made - Economics is a way of thinking, not just what economists decide to tell us.

[psikeyhackr]

@stealthswimmer Demand Side Depreciation requires economic activity to be compensated for. But economists ignore the Depreciation of Durable Consumer Goods. The equation they use for NET Domestic Product is WRONG.

But then economists hardly ever talk about NET DOMESTIC PRODUCT.

Curious ain't it? Consumers must be kept dumber than economists. So they debate Keynes versus Hayek like that is important.

[firecrackerhan]

Lol, Scottish person showing off Ron Paul's book.

[danfg]

And you're showing off your own ignorance.