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The Subjectivity of Price


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8 replies to this topic

#1
JSDev

JSDev
  • 142 posts

 

I guess you learn something new every day but the idea that price is subjective just blew my mind. I've been reading Rothbard for a while and have been listening to Stefan for a while and I just never looked at it that way. But it makes complete sense.

 

The price you see on a price tag or the price of a home, is all just guess work. It's not the actual price of the item. Even under no-haggling situations, a merchant who sets a price but doesn't get any buyers, will have to lower the price because they guessed incorrectly. Seems so obvious now.

 

 

Unfortunately, I don't think the caller gets it.

 



#2
Stefan Molyneux

Stefan Molyneux
  • 19756 posts

If price were objective, central planning would work, that's why the conversation was so important to him...



#3
Marlon

Marlon
  • 1844 posts

YES that was a huge thing to learn for me. I always wondered if price of items and value of currency was just arbitrary. That conversation cleared some things up for me and confirmed much more of what I already thought.



#4
nathanm

nathanm
  • 2017 posts

I think it can FEEL like prices are fixedobjective possibly because there's not much haggling in Western culture.  If you watch a show like Pawn Stars or American Pickers you can see true 1:1 subjective valuations taking place, but this isn't the same interaction you are going to get at Target, Wal-Mart or Amazon (don't forget to use the Stef portal!).  AFAIK you can't haggle over price, it's either buy it at the sticker price or don't buy it.  I guess this is because there are so many middle men involved whereas haggling over old oil cans only has one layer of, ahem, economic actors.  Not sure, though.  That might have something to do with where that caller was coming from.  But mostly it just sounds like a whole lot of 3rd party bullying from a bunch of knowitalls after two other people have made an exchange.  Both the last caller and Peter Joseph think they know better than you what you want and need and re-label their chutzpah as objectivity and science.



#5
JSDev

JSDev
  • 142 posts

I think it can FEEL like prices are fixedobjective possibly because there's not much haggling in Western culture.  If you watch a show like Pawn Stars or American Pickers you can see true 1:1 subjective valuations taking place, but this isn't the same interaction you are going to get at Target, Wal-Mart or Amazon (don't forget to use the Stef portal!).  AFAIK you can't haggle over price, it's either buy it at the sticker price or don't buy it.  I guess this is because there are so many middle men involved whereas haggling over old oil cans only has one layer of, ahem, economic actors.  Not sure, though.  That might have something to do with where that caller was coming from.  But mostly it just sounds like a whole lot of 3rd party bullying from a bunch of knowitalls after two other people have made an exchange.  Both the last caller and Peter Joseph think they know better than you what you want and need and re-label their chutzpah as objectivity and science.

 

But even if there is no haggling at Target doesn't mean price isn't subjective. It's like the stock market. Everyone wants to be able to predict where the price is going to go and you have varying degrees of skills in making those predictions. The price you see at Target is also just a prediction, one that if they get wrong will have to adjust accordingly.



#6
Think Free

Think Free
  • 149 posts

Stef, based on your conversation with Bruce (and other's I've heard), I would like to suggest that you, Stef, occasionally take some time to help someone with an opposing view construct their argument before you refute it. I think both the caller and the audience would benefit from that more than when you refute their semi-coherent ramblings.



#7
Wesley

Wesley

    Self-Excavator

  • 1412 posts

Stef, based on your conversation with Bruce (and other's I've heard), I would like to suggest that you, Stef, occasionally take some time to help someone with an opposing view construct their argument before you refute it. I think both the caller and the audience would benefit from that more than when you refute their semi-coherent ramblings.

If I have an entire argument and my first premise for that argument is 2+2=5, then why would he let me continue when right at that point the argument is flawed?



#8
Mike Fleming

Mike Fleming

    Atheist Anarchist Determinist

  • 422 posts

It's why price fixing is such a bad thing.    In most nations with big governments, price fixing is rife throughout the economy.   In a price fixing situation you are removing important information from the price which leads to people making bad decisions, just as anyone with bad information, that they think is good, will end up making bad decisions.  

 

It's particularly true with interest rates.  Fixing interest rates at politically convenient levels has led to property bubbles in many nations which lead to bloated bank balance sheets (and correspondingly rich bankers) and then credit crunch and then full-blown financial crises as eventually societies debts overwhelm them and they can't pay their debts to the banks.  The huge debts to the banks should not have occurred in the first place.



#9
Think Free

Think Free
  • 149 posts

If I have an entire argument and my first premise for that argument is 2+2=5, then why would he let me continue when right at that point the argument is flawed?

 

Your choice of "2+2=5" is kind of a bad example because you're using a highly technical and accurate language with a single, unambiguous meaning. In normal conversation people use many words that have multiple (sometimes opposite) legitimate meanings and frequently even misuse words. They also misspeak.

 

Furthermore, it is a mark of Stef's experience debating and thinking rationally that he's able to immediately say, "That's not what I said," or "That's not what I meant," when people mischaracterize his position. However, it is an odd element of human psychology that people will often defend and argue for a claim that they don't agree with just because someone expresses an expectation that they do so. Often they will leave the debate feeling confused and as if their position was never addressed, because they ended up defending a position that wasn't what they meant. (As for why this is the case, I think compulsory schooling seems like a good suspect.)

 

If someone says something like, "2+2=5" I would suggest that Stef figure out if that's what they really mean* and whether it is actually relevant to their argument, since people frequently make inaccurate (by which I mean, not a clear expression of what they mean) and irrelevant statements, even when arguing. If it is not an accurate representation of their claims or it is not relevant to their actual reasoning, it's just a red herring, and listeners can go away feeling like their position wasn't actually addressed.

 

---

 

*Stef already does this a little, but I am suggesting that he should take it further. When people are talking with Stef, they often make almost incoherent claims. Stef will often work with them until they make a claim that is coherent enough to be wrong, but I am suggesting that he go further, as explained above.