And now I see that you're playing a new semantic game: defining ‘capitalism’ (or is it ‘Capitalism’? that would at least make a bit of sense) to mean some ideal system that you want to reach, rather than an actually existin economic system (which is what the term was invented to describe).

I couldn't find the link that I really wanted to make, but here's one that's not too bad: http://www.blackcrayon.com/essays/capitalism/take1/
Also see the English Wikipedia for the history of the word.

>utility after - utility before

And does utility before include the best other alternative?

No... Opportunity cost is irrelevant when considering utility..........

I give money to someone else if I lose a defense in court and you don't consider that a transaction? You are really riding loose with your definitions, rlumley.

No wonder he doesn't like to argue semanthics.

@ rlumley

Ah, I was confused because you mentioned ‘the next best alternative’ when originally explaining why every transaction is a ‘benefit’ to both sides.

In that case, my only reply is to cite the economists who invented the concept of opportunity cost; I believe that they were right.

@ Dragunar: That's not a transaction as I defined it, because it is forced... I clearly stated that the rule only applies to voulentary things.

@ Xapi: Contribute something or leave please.

@ Toby: Yeah, I remember saying next best cost, but I don't really want to go back and look at what I wrote - I have to go soon. At any rate, what it's mostly the same thing, because that money is equal in value to the next best cost. The utility of the money (Utility before) equals the utility of the next best cost, because money is inherently useless. It is, however, a good means of measuring utility.

I will say that your argument still doesn't stand though, since the information disparity would still exist for the next best alternative as well. And I'd also put it to you that even if companies were being profoundly, for example, environmentally destructive, most consumers would rather destroy the environment and get the cheaper cost good.

@ rlumley: "even if companies were being profoundly, for example, environmentally destructive, most consumers would rather destroy the environment and get the cheaper cost good."
Are you saying that capitalism is not sustainable? That left on its own it tends to pursue the cheapest way of producing goods even though it means destroying the natural resources needed for human survival and the future production of those same goods? Really? :P

"@ Xapi: Contribute something or leave please."

This posts contributes nothing.

I have already stated that I believe that only labour (or work, or human effort, name it what you will) creates wealth. You and Toby can discuss endlessly on utility and best alternative, but the fact of the matter is that if I give you $ 1000 for a last generation PC, no wealth was created.

Before, I had $1000 and you have a PC, afterwards, I have a PC and you have $1000. The exact same amount of wealth is available in the world.

I will only have something that is worth more than $1000 to me in that PC if I start to work on it, thereby creating actual wealth stored as bytes in that computer.

The rest is yadda yadda.

@ Xapi: I know I risk being accused of discussing semantics, but I think you and rlumley are talking about different things. An exchange does not generate "wealth" in absolute terms, you are right on that. But it does (in most cases) move both parties to a situation of greater "well being". If I have 10 apples and 0 eggs, and you have 10 eggs and 0 apples, the marginal utility of 1 egg for me is much greater than for you and vice versa; so, by exchanging 1 apple for 1 egg we both increase our overall "utility" or "well being" or "happiness" or however you want to call this.
At the same time, this only allows a better allocation of limited resources. A real increase in total wealth - or resources available - is only possible through work. So I think you are right in saying that only work generates wealth. Transactions probably generate wealth only in that by allowing specialisation and division of work they make labour more productive and increase wealth creation.

if(think(wealth) == money)
{echo "You're a moron."}

Xapi: I'll try to explain this the again, but if you didn't understand this the first time, you probably won't this time either.

Assume I would buy a PC for $1500. Said PC is worth $1500 to me. If I find an equal PC for $1000, I have created $500 of utility (wealth) by buying that PC. You paid $1000 to get $1500 of utility.

And maybe the guy on the other end would have sold it for $500, but ended up getting $1000. He has created wealth too, because he "paid" $500 to get $1000.

Things are not valued at their price, they are valued at their worth. There is a distinct difference.

DarioD put it exactly correctly: Wealth is a measurement of utility, not money.

On a comedic and related note, I was discussing this with my roommate and he had this to add. "Suppose you have $1000 and I have $1000 and a gun. My $1000 is worth more."

>And maybe the guy on the other end would have sold it for $500

… if he had less information?

DarioD put it exactly correctly: A real increase in total wealth - or resources available - is only possible through work.

">And maybe the guy on the other end would have sold it for $500

… if he had less information?"

Or if no one was willing to buy it at $1000...

Xapi and DarioD - you leave out the increase of wealth through pleasure. Let's say I buy a state of the art flatscreen plasma gagillion inch TV for $8000. the store that sold it made $4000 over their wholesale purchase price and overhead. That was work earned wealth. But I still find an increase in wealth through the pleasure I take watching the superbowl on it at a party with all my friends, even thought the party even cost me money. There are other types of wealth besides cash-equivalent wealth. Pleasure and knowedge can both be a form of wealth, amongst others.

I hate to be... like I am... but what is this thread about? Wealth?

I thought it was about Beck. Some side track.

This thread is about ignorant people trying to come up with alternative economic theories.

Can anybody come up with an example of any point in history when capitalism has 'worked'?
how about communism?

if so, I am intensely interested, because as of yet I have yet to find one.
if not, then you really can't chastise others for arguing hypotheticals (sp)


@ Invictus
where is this cloud you're sitting on that allows you to be so condescending to those you disagree with? Are you then, the vanguard of knowledge and experience?
if all those in this thread are ignorant for their ideas of the best possible economic system, would you care to offer an alternative?

I'm not sitting on any cloud. I merely know that none of you are economists and a little knowledge is a dangerous thing.

Glenn Beck helped push the ACORN corruption.

Therefore, ACORN is innocent.

Just when you think the bottom's been scratched...

Being an economist isn't a requirement for being knowledgeable about economics. You don't have to be a prostitute to fuck doggy style, and you don't have to be a landscaper to mow your lawn.

do you hire calligraphers to make your grocery list for you?

@rlumley: "And I'd also put it to you that even if companies were being profoundly, for example, environmentally destructive, most consumers would rather destroy the environment and get the cheaper cost good."

Another good argument for why we should not leave it to the markets to distribute resources.

@ Invictus: "This thread is about ignorant people trying to come up with alternative economic theories."

Troll.

@Invictus: "...I merely know that none of you are economists"

How do you know this? On what basis do you claim to have a detailed knowledge of the qualifications and employment history of everyone who has posted on this thread?

@ Jamiet: So if the majority of people wanted to destroy the environment you would say that the government should stop that? Sounds awfully little like democracy (Even though I hate democracy...)

As if capitalism is democratic in any way.

@rlumley: "Jamiet: So if the majority of people wanted to destroy the environment you would say that the government should stop that?"

Yes.

Well then we disagree. :-P

I'm going to be very brief here, but these are my thoughts on environmentalism: Obviously we shouldn't destroy the environment. But there are only a set number of resources, and they must be consumed. Human life is not sustainable in the long run - look at the second law of thermodynamics. Any discussion of conservation without regards to cost is foolish, because by that logic, we should all kill ourselves to preserve disorder in the world, so that we prolong the heat death of the universe.

I know that's a weird point to make, and I'd be more eloquent if I had time, but I really don't.

@rlumley:

"there are only a set number of resources, and they must be consumed"

Why must they?

"Any discussion of conservation without regards to cost is foolish"

I agree with you on that. The whole economic picture must certainly be borne in mind when this issue is considered.