07-10-2004 04:37									#151
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quote: Originally posted by Drachasor Money measures the value of a good to those willing to pay that amount for it. However, money is not like a yard stick, nor is a good constant. Both can fluctuate in their "worth." If you have more and more of a good created, beyond what you had before with the same demand for it, then the cost of it goes down. This is supply and demand. It is important to note that this value doesn't necessarily coincide with how much work it takes to procure/make the item, as there are some things people simply don't want, and other things that people really do want. As such some things simply aren't worth making, even if they do require a lot of time and energy. Money isn't immune to this either. Right now most countries are not on a gold standard, instead they are on the "full faith and credit" standard, basically meaning a unit of money has value because the nation that issued it backs it up, controls the supply of it, etc. So the value of money relative to goods and services can fluctuate too.

All this is right.

quote: Now, both of these things together give you the time value of money.

None of that above does anything to justify this claim. All it shows is that you recieve rent, interest or whatever for your money if you put it in the financial system. Putting money in the financial system does not create a good or service and does not create value.

Let me put it this way. Say I buy a widget from the producer. Is the price = to the value of that widget? Then I rent that widget out. Is the price + rent = value? Of course not. You can't have two different values just because time went by.

	07-10-2004 04:40									#152
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quote: Originally posted by Flip McWho Ok final point then I must do my essay. Money creates the speculative value. But labour does not hold any inherent value within itself. Which you are tending to ignore.

Why not? Explain.

	07-10-2004 04:43									#153
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Ok so you define value as total quality and quantity of goods and services. No problem. I'll define capital as accumulated labor and land. If this capital is properly allocated it would bring about the greatest total quantity and quality of goods and services. In order for someone to give up their own capital, they would have to be compensated. If the party who needs the capital doesn't have anything to exchange at present; the best way to do this is to give them their capital with interest at a later date, or too make the capital provider a partner (stocks). Because if the capital provider used that capital themselves, then they could either create value with it, or use in exchange for a good or service. They must be compensated with greater interest than they could produce themselves by using their own capital. This would require the capital user to have to use the capital in more value creating work then the person he borrowed it from. Both parties win and are better off.

That is how TVM works in a purely qualitative sense, with no external demand.

	07-10-2004 04:44									#154
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Has nothing to do with money. It is all about time. What it really means is that it is more valuable to have something now than it is to have the same thing at some later time instead.

	07-10-2004 04:50									#155
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quote: Originally posted by Moral Hazard Ok so you define value as total quality and quantity of goods and services. No problem. I'll define capital as accumulated labor and land.

Yes there is a problem, because capital isn't just an accumulation of labor. It's also an accumulation of rent. Hence, the concept: time value of money.

quote: If this capital is properly allocated it would bring about the greatest total quantity and quality of goods and services. In order for someone to give up their own capital, they would have to be compensated. If the party who needs the capital doesn't have anything to exchange at present; the best way to do this is to give them their capital with interest at a later date, or too make the capital provider a partner (stocks).

So people should be able to accumulate rent, because they have accumulated rent in the past. Smoke and mirrors.

quote: Because if the capital provider used that capital themselves, then they could either create value with it, or use in exchange for a good or service.

And I have no problem with them doing that.

quote: They must be compensated with greater interest than they could produce themselves by using their own capital. This would require the capital user to have to use the capital in more value creating work then the person he borrowed it from. Both parties win and are better off.

So, because they don't want to do the work themselves, they deserve to collect rent.

quote: That is how TVM works in a purely qualitative sense, with no external demand.

Doesn't it though.

	07-10-2004 04:52									#156
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quote: Originally posted by pchang Has nothing to do with money. It is all about time. What it really means is that it is more valuable to have something now than it is to have the same thing at some later time instead.

And?

	07-10-2004 04:53									#157
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There is no and. You say "Time Value of Money" is a crap concept, but in reality, you have a misunderstanding of the concept. I have just explain the true meaning of the phrase.

	07-10-2004 04:55									#158
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quote: Originally posted by pchang There is no and. You say "Time Value of Money" is a crap concept, but in reality, you have a misunderstanding of the concept. I have just explain the true meaning of the phrase.

You haven't explained anything about money, only things. You say things are more valuable today then they are tomorrow. So what does that have to do with money? If money is a thing than you have just made a contradicting argument.

	07-10-2004 04:57									#159
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quote: Yes there is a problem, because capital isn't just an accumulation of labor. It's also an accumulation of rent. Hence, the concept: time value of money.

Assume nobody has ever traded before - still works.

They could use the capital themselves and this would produce less value.

	07-10-2004 04:58									#160
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quote: Originally posted by Moral Hazard quote: Yes there is a problem, because capital isn't just an accumulation of labor. It's also an accumulation of rent. Hence, the concept: time value of money. Asume nobody has ever traded before - still works. They could use the capital themselves and this would produce less value.

Now why would I want to make a false assumption. For your magic trick?

	07-10-2004 05:04									#161
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Once again you can't disprove the theory, so you call it a magic trick. Pathetic.
With out interest there would rarely be transfer across time of capital and there would be less value. Anyways your hopeless.

	07-10-2004 05:11									#162
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quote: Originally posted by Moral Hazard Once again you can't disprove the theory, so you call it a magic trick. Pathetic.

I call a theory that knowingly uses false assumptions magic.

quote: With out interest there would rarely be transfer across time of capital and there would be less value. Anyways your hopeless.

In a capitalist system perhaps. I never claimed that labor could be fully compensated in the capitalist system. Rent must be compensated. That doesn't mean that rent is the result of an increase of quantity or quality of goods and services. All it is is an increase in money. You're continually confusing an increase in money with an increase in goods and services.

	07-10-2004 05:17									#163
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quote: Is the price = to the value of that widget?

Um... yes.

quote: Then I rent that widget out. Is the price + rent = value?

The amount of rent is only the rental value of the widgit. The 'value' of it is what the market is willing to pay for it.

And the Time Value of Money is what pchang said. It's the idea that money today is worth more than money tomorrow. That speculation that you deride is integral to determining value.

Nothing has economic value without determination of its price. And seeing how you are all alone on this (even ODIN disagrees with you), basically, you've been PWNED.

	07-10-2004 05:20									#164
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quote: Originally posted by Imran Siddiqui quote: Is the price = to the value of that widget? Um... yes. quote: Then I rent that widget out. Is the price + rent = value? The amount of rent is only the rental value of the widgit. The 'value' of it is what the market is willing to pay for it. And the Time Value of Money is what pchang said. It's the idea that money today is worth more than money tomorrow. That speculation that you deride is integral to determining value. Nothing has economic value without determination of its price. And seeing how you are all alone on this (even ODIN disagrees with you), basically, you've been PWNED.

I guess so since ideas have economic value, NOT!

	07-10-2004 05:28									#165
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Let me break it down again for some of you. Rent increases money only. It does NOT produce anything of value in the economy. It is a transfer of income. One person used to get value from the money, but now another person gets value from the money.

NO VALUE HAS BEEN CREATED BY THE MONEY, VALUE HAS ONLY BEEN TRANSFERED!

	07-10-2004 05:39									#166
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The assumption was an attempt to get you past your moralistic problem with rent. Which does fascilitate a greater production of goods and services. To argue that it doesn't is quite frankly insane. Of course you use different definitions then everyone else so, who knows.

	07-10-2004 05:41									#167
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quote: Originally posted by Moral Hazard The assumption was an attempt to get you past your moralistic problem with rent. Which does fascilitate a greater production of goods and services. To argue that it doesn't is quite frankly insane. Of course you use different definitions then everyone else so, who knows.

Well this isn't about the morality of rent. Of course I've been playing along a little, but no, you haven't been successfull at convincing me.

	07-10-2004 05:46									#168
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You can almost never convince anyone who has their mind made up in an argument. Look back to why I was arguing, and in my mind we succeeded

	07-10-2004 05:48									#169
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quote: Originally posted by Moral Hazard You can almost never convince anyone who has their mind made up in an argument. Look back to why I was arguing, and in my mind I succeeded

It's not that my mind was made up. It's that you didn't tell me anything that I haven't already considered.

	07-10-2004 05:55									#170
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If I had a lot more money then I'd have a lot more free time on my hands. Seems pretty clear to me.

	07-10-2004 05:55									#171
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quote: Originally posted by Kidicious None of that above does anything to justify this claim. All it shows is that you recieve rent, interest or whatever for your money if you put it in the financial system. Putting money in the financial system does not create a good or service and does not create value.

This is the Time Value of Money. A given amount of money today (say $100) is worth more than the same amount of money in the future (again $100). Why? Because that $100 today can be invested and worth more in the future.

That's the time value of money; it's the definition. You have just been a bit confused about that. You might disagree with the words they use to name this, but the above is what it means.

quote: Originally posted by Kidicious Let me put it this way. Say I buy a widget from the producer. Is the price = to the value of that widget? Then I rent that widget out. Is the price + rent = value? Of course not. You can't have two different values just because time went by.

When you buy a widget, the value is of owning the widget forever, and being able to do anything you want with it. That's what the price is in that case.

When you rent the widget, the rent is the value of being able to use the widget for a certain amount of time, without having to pay for the whole thing. Even if you end up paying more in rent, over a long time, than the purchase price of the widget, it can still be worthwhile (or the only thing you can do) if you needed that widget for that whole time and could never afford at any one moment to buy it (though in this case a lease to buy would have ben the wiser course).

You are paying for slightly different things in both cases. In the latter case, part of the money you spend is for the value of not having to pay the full price, and part of it is how much wear and tear you do to the widget (that part of its buy-value you use up). The former and later both vary with market forces, of couse.

Does that help?

-Drachasor

	07-10-2004 06:04									#172
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quote: Originally posted by Flip McWho So this is basically stuff then. That's cool, I need to hone some skills in economic debating.

You got it!

	07-10-2004 06:07									#173
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quote: Originally posted by Drachasor This is the Time Value of Money. A given amount of money today (say $100) is worth more than the same amount of money in the future (again $100). Why? Because that $100 today can be invested and worth more in the future. That's the time value of money; it's the definition. You have just been a bit confused about that. You might disagree with the words they use to name this, but the above is what it means.

I'm not confused about that at all. I don't disagree with it.

quote: When you buy a widget, the value is of owning the widget forever, and being able to do anything you want with it. That's what the price is in that case. When you rent the widget, the rent is the value of being able to use the widget for a certain amount of time, without having to pay for the whole thing. Even if you end up paying more in rent, over a long time, than the purchase price of the widget, it can still be worthwhile (or the only thing you can do) if you needed that widget for that whole time and could never afford at any one moment to buy it (though in this case a lease to buy would have ben the wiser course). You are paying for slightly different things in both cases. In the latter case, part of the money you spend is for the value of not having to pay the full price, and part of it is how much wear and tear you do to the widget (that part of its buy-value you use up). The former and later both vary with market forces, of couse. Does that help? -Drachasor

Let's go this way. Can we both agree that the person who rents the widget is the person who will get the most utility from using it?

	07-10-2004 06:19									#174
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quote: Originally posted by Kidicious Let's go this way. Can we both agree that the person who rents the widget is the person who will get the most utility from using it?

It really depends.

Say widgets last for 10 years and I only want one for 1 year. It might well be cheaper for me to rent it instead of buying it. Perhaps I'd rather invest the excess money elsewhere into things that would make me more money, perhaps the fact that I don't want to have to worry about selling a year-old widget is part of the reason I'll pay a bit more too.

Sometimes people do get screwed though, but that can happen from just buying things too.

-Drachasor

	07-10-2004 06:24									#175
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quote: I guess so since ideas have economic value

I haven't heard of people paying for simply an idea. Paying for a realized idea or a protected idea (otherwise considered patents)? Sure... and those things have value based on what the price people are willing to pay for them.

quote: Rent increases money only. It does NOT produce anything of value in the economy.

Well, it doesn't directly do so, but may indirectly. Perhaps portential for rent will increase the value (ie, selling price) of a certain property.

	07-10-2004 06:27									#176
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quote: It really depends.

Yep... because use of the widget may increase the value/price of it, because other people see the person using the widget and see how much easier it makes their work. The rental value could go up significantly in some cases.

	07-10-2004 06:27									#177
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quote: Originally posted by Drachasor It really depends. Say widgets last for 10 years and I only want one for 1 year. It might well be cheaper for me to rent it instead of buying it. Perhaps I'd rather invest the excess money elsewhere into things that would make me more money, perhaps the fact that I don't want to have to worry about selling a year-old widget is part of the reason I'll pay a bit more too. Sometimes people do get screwed though, but that can happen from just buying things too. -Drachasor

Well, if the person using the widget is not the person that would get the most utility from it then we have a problem there.

I was going here. When the widget is transfered the owner gives up exclusive rights to the widget. Therefore he can recieve no more utility from it. That is a loss in utility. Now the renter gets to utilize the widget.

Start with this. What is this increase in value that you speak of? Nevermind that the owner recieves rent, and therefor becomes richer. I already know this of course, and it's completely irrelevent. Of course, the person who rents the widget is poorer, and that's why. There is no increase in value there, only a transer in wealth.

	07-10-2004 06:30									#178
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quote: Originally posted by Imran Siddiqui I haven't heard of people paying for simply an idea. Paying for a realized idea or a protected idea (otherwise considered patents)? Sure... and those things have value based on what the price people are willing to pay for them.

We aren't talking about patents for new technologies. We're talking about political ideas.

quote: Well, it doesn't directly do so, but may indirectly. Perhaps portential for rent will increase the value (ie, selling price) of a certain property.

Selling assets doesn't increase value either, in so much as it doesn't result in economic benefits.

	07-10-2004 06:31									#179
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The person renter the wigdet gets the value of using it for the rental period.

It's like ice cream; you use up your value and then you are out the money, but you still have whatever value you accumlated while you used it.

-Drachasor

	07-10-2004 06:32									#180
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quote: Originally posted by Drachasor The person renter the wigdet gets the value of using it for the rental period. It's like ice cream; you use up your value and then you are out the money, but you still have whatever value you accumlated while you used it. -Drachasor

Oh please stop making obvious, irrelevent statements.