Suppose you find an old painting in the basement.

You put it out in your garage sale. A stranger comes along and offers $20 for it. Another person arrives and tells you it’s actually a valuable piece and would pay $200 for it.

A third person comes along and explains that it was made by their great grandmother and it was the last piece she made and she will pay $2000 for it. For sentimental reasons.

This third person has made a powerful enemy who then comes along and offers $20000 for the item, just to spite them. They intend to set the painting on fire.

How much “wealth” was stored in the painting?

Art is silly but really all value is subjective and situational. Crayfish can be cheap poor people food or a delicacy of the rich, depending on culture. You could die in a desert, weighed down with “valuable” gold because the traveller you met would not trade it for their last canteen of water.

This is a nice example showing how people don't really know what is going on, wealth seems to behave in very mysterious ways.

But, in each step you are clearly adding more and more context along with the physical item itself, context that must itself have some physical encoding.

My point is mainly that I insist that physical reality is all there is, and if some events are hard to assign to any one physical thing that just means we are looking for subtle correlations.

I'm pretty sure that in economics, physical reality is not all there is. Economics is about people assigning value to things. The things, by themselves, have no economic value.

> I'm pretty sure that in economics, physical reality is not all there is.

Yes, it is.

> Economics is about people assigning value to things.

People are not outside of physical reality, nor is their experience of utility.

Well, if you go for the position that people are just machines made of atoms, then, yes, physical reality is all there is, even in economics. But no, I do not want to start with atomic physics, and from there try to derive human utility, and from that try to derive economics. That's... not a feasible research program. It's not going to provide any insight into economics, ever.

So even if you accept the materialist position, for purposes of doing economics, you kind of have to regard humans as something different. (Or so it seems to me, a non-economist.)

Economics (like most things that aren't physicsf even lots of subfields of physics) doesn't model everything (or much of anything) it addresses in the physical universe from the base up, but it doesn't require treating anything as special and non-physical either.

I feel that the clue is really in the name, wealth is stored “value”, and value is well, a “value judgement”.

If you have to strip away all uncertainty from the universe to support your position and further posit hard materialism and then qualify with “in practice it’s not discoverable but philosophically it’s there” then I feel we are squarely in angels dancing on pinheads territory.

Physics itself does not need such violent axioms to get useful results! I think you would be hard pressed to find a physicist who would claim a plausible conservation law for “subjective beauty” (another kind of value), yet this is also a consequence of your premises.

You’ve explained that you are a materialist but not really anything useful about economics as practised by humans. Who are, perforce, rather limited.

You could equally well say “there is a ‘true’ value for every thing, but only god knows it”. That statement would be exactly as useful and (as an aside) just as unprovable a belief.

If we are in dancing angels territory it is because you insist that counting angels on pinheads is exactly how you value cheeseburgers. Meanwhile, I will stick to the notion that the value of a cheeseburger is tied to how hungry I am and if I've got other stuff to do.

The things that can be owned are not necessarily physical. Think of intellectual property, which is essentially information about the permutations into which that physical matter can be arranged, and you'll notice that there's a huge excess of potential ownership. Financial derivatives are similarly only very loosely related to the world of material, and yet they account for trillions of dollars’ worth.

Ok, so basically you're saying that one can own arbitrary bits of phase space?

But does this really give you non-conservation? Doesn't your remark just clarify that non-conservation comes from ignoring most of the space of possible ownership until someone bothers to go there?

I mean, there is clearly a difference between the value of (sensible) financial derivatives and the value of the death star to the imperial court in the Star wars universe.

So the connection to physical reality clearly matters somehow.

I'm arguing a bit more, actually: that the phase-space itself can form the basis for higher-abstraction phase-spaces, and so on almost ad infinitum, and thus provide an almost inexhaustible supply of potential ownership.

A meta-fund that owns equity in a fund that invests in securities issued by owners of multiple pop-culture IP franchises? No problem.

What is a higher-abstraction phase space? For me the natural interpretation would be something that encodes phase space in a smaller representation, but that is clearly not what you have in mind...

In any case, I don't see why positions and correlations between different particles shouldn't be considered "real", so that's arbitrary stacking of ownership brought down to earth.

In fact, wasn't subprime to a large degree about falsely claimed correlations? That is to say the derivatives implicitly assumed things that weren't true, or in other words secretly left reality behind.