Defining value by the workings of the market is simply a circular and technical argument. It's no more useful than defining justice by actual outcomes of court cases. For one thing, markets define value rather simply: a simple majority vote where present and future votes are discounted. It's a pretty good rule with the nice feature that it's distributed requiring no central planning, but it is not magic and does have some less than desirable corner cases such as, say, the state of everyone at the lower end of the bell curve in western countries for the last four or five years.
> For one thing, markets define value rather simply: a simple majority vote where present and future votes are discounted.
Well it's a bit more fiddly than that. A better analogy is that markets integrate individual tradeoffs. That is, value is constantly established by exchange: I give up 2X for 4Y. I value X at 2Y at the moment.
Economists call this "subjective value". The point being that no objective measure can be thought of which isn't circular or ultimately subjective, relying on some exogenous assignment of value.
If I say 'value' is something like 'hours of labour', then I've just pushed back the definition. Why are labour hours valuable? If it's 'ability to support life', I've merely promoted life-support to a higher value and ignored all other considerations; but are all economic decisions so made with a singular objective? Again I've just made a subjective judgement about what is and isn't valuable.
But somebody may yet prove the economists wrong. So the first step in any discussion of the grandparent post must be to work out what he meant by 'real value'. What is it? How is it recognised? By whom?
This is simply the redistribution of tax revenue from the central bank of the US (which is itself privately held by a cabal of banks by way of owning the 12 regional feds forming the FOMC) to the banks themselves.
The question shouldn't be "what's real value", the question is are we okay with concentration of US wealth to a cabal of multinational banks that, in turn, distribute it to wherever they deem money-worthy? Because, increasingly, that hasn't been the US. Why would we be okay with that?
Value is determined by value added? How did you measure the difference?
> Simply, it's a fair price for a fair unit of work.
By labour? This just moves the question along to be "why is labour value?"
> The question shouldn't be "what's real value", the question is are we okay with concentration of US wealth to a cabal of multinational banks that, in turn, distribute it to wherever they deem money-worthy?
I raised the question of what value is because of the rhetorical assertion that banks don't create 'real value'. Before you can decide whether to be concerned about 'real value' it helps to establish what it is.
> Because, increasingly, that hasn't been the US. Why would we be okay with that?
I'm Australian and I'm OK with that. Do you suppose that when money is invested overseas it miraculously disappears, never to be seen again?
I think we as a society have to deal with the fact that the financial services industry is more and more about extracting wealth from the rest of the economy and that it is producing less and less of real value relative to its profits.