April 8, 2013

Value is subjective (Macklemore & Ryan Lewis Thrift Shop Economics Remix / Parody)

On March 15, 2013, a student from Fayetteville State University produced a YouTube video entitled “Value is subjective (Macklemore & Ryan Lewis Thrift Shop Economics Remix / Parody).” The great concept this video refers to is the Austrian principle that value is subjective and exists within the minds of individuals. In the words of Ludwig Von Mises,  “All judgments of value are personal and subjective. There are no judgments of value other than those asserting I prefer, I like better, I wish.”

As quoted by the video:
“Value's what you think; it's not a black and white movie scene where cost of goods is linked to some predetermined utility Probably should've invested it, by now I would surely be Rich!!! But yo! I lack common sense! Value is subjective see Let's look of this objectively The cost of productivity Doesn't determine our utility It's our needs wants and abilities that we use as our guide Along with the diamond and water paradox that deals with supply”

This portion of the video is extremely correct. Given that value is subjective, it remains absurd to think that one can place a value on an object or thing (value is not intrinsic). It’s our needs, wants and abilities that we use as a guide. These are all interpersonal factors (within our minds) that are used to weight costs and benefits of ideas, products, services, and/or knowledge. All action employs scarce means to attain the most valued ends. The factors for which an actor decides to employ remain the highest valued factors relative to their preference. Individuals must determine subjectivity for his or herself whether she would benefit or suffer from an exchange. This preference can only be reflected in choices.

As the lyrics read, “$100 for a costume some may consider this senseless
I call that meeting a person's preference.
You call me back I'll give you a Menger reference”

The Menger reference he is speaking of is Carl Menger. Who first laid the groundwork for the Austrian principle of value. The satisfaction of a decision exists only in the mind of the actors. There is not a way to measure an increase or decrease in satisfaction; therefore, rendering any argument that goods have objective value void. If goods contained an intrinsic object value, then all goods would remain equal in value, thus eliminating the need for trade. When individuals exchange goods, the value of said good fails to transfer with the good. Individuals value objects not just by direct use, but by exchange value as well. This information may accurately be reflected in prices. 

The video accurately reflects this concept,
“The markets regarded for putting prices on target Matching people's needs with products at prices they should be bought at sucka You set the money right and they'd a bought that product from ya You charge too much and they'll stop buying products from ya”

Ludwig Von Mises states in Human Action, “In reality no food is valued solely for its nutritive power and no garment or house solely for the protection it affords against cold weather and rain…. the demand for goods is widely influenced by metaphysical, religious, and ethical considerations, by aesthetic value judgments, by customs, habits, prejudice, tradition, changing fashions, and many other things.” The curious task of economics is to reflect how little men really know. Value is simply a judgment, one that can only be measured by people. No external individual could possibly have enough economic knowledge to control the value of a good, let alone a government or group of people.

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