Neoliberalism just hides it behind the IMF etc. There is also the entire history of US interventions abroad.
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Marginal Theory of Value
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The earlier economists called it 'political economy' for a reason. Politics and economics are linked, it's not a simple matter of 'interventionism vs non-interventionism'. The distribution of resources is an important political issue in any society, so in a sense there's no such thing as 'non-interventionism' but more 'interventionism for whom'.
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I believe in the the theory of economics. That doesn't necessarily believe I am a right winger. Like I believe, that the marginal theory that workers would only get a small chunk of profits. But I don't believe that just because it is natural that it is necessarily right. I think the government should interfene to improve outcomes for the majority.
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true. everyone disagreeing with this doesnt understand basic economics.
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LVT is a macroeconomic concept. Marginalism is micro. So LVT is better for Victoria.
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Eh, European welfare states maintain those policies by way of imperialism. And while not all those countries are significantly involved in the economic exploitation of the Global South, they certainly are within the eastern states of the EU. As if the failures of the post-'89 'shock therapy' weren't enough, now you are likewise forced to allow the unlimited free movement of labor and of commodities. Good luck solving the 'Europe at two paces' when your country suffers from brain drain (which you no less finance through subsidized higher education which imposes no obligations on its beneficiaries to repay through either labor or money before they decide to emigrate), your industries were either scrapped or purchased by foreign capitalists since they are (for the most part) the only ones with both the capital and the technical knowhow necessary to modernize and make them competitive on the European market and your rural dwellers revert to subsistence farming since most collective farms weren't successfully maintained in the transition to capitalism and the individual peasants cannot afford to compete in commodity production with industrial farms due to inefficient labor, less capital to both sustain and expand such a business and draconic legislation which makes it near impossible to get your products in supermarket chains.
Today's boyars and szlachcices will let you know that you are 'a European citizen and thus have rights' though, so long live neoserfdom! (/s)
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The goal of the thread is discussing whether LTV, supply and demand theories, marginalism or any other model is useful to represent economics in the game, so let's please try to limit the discussion there.
Supply and demand has limitations to explain price. LTV is related to price, but doesn't attempt to explain it, and it's more related to supply and demand that it is usually understood (getting into this pretty soon), and it also has severe limitations to explain price. Marginalism, unlike most supply and demand theories, mystifies or ignores the relations of power and negotiation implicit in the distribution of goods and wealth (which is fundamental to calculate price), if you want to learn about this I recommend you to look up information on game theory applied to simulation of economics, which has birthed the most precise tools used by financial institutions to study the market.
My main point of contention here is that LTV was promoted by both Smith and Ricardo because it was tightly linked to supply and demand. Let's take the theorical assumptions of the self-regulating market: there is more production of good A than it is required, and there is less production of good B than it is required; this will provoke the price of good A and the profits and wages of its producers to fall, and the inverse process will happen to good B and its producers; and this will provoke producers of good A to switch over indefinite periods of time towards producing good B. When the Labor Theory of Value states that the value of goods A and B are derived from the work poured into producing them, it's because it projects these shifts of production towards an infinite time into the future, the same way you'd consider correct to calculate that a car that moves at 100km/h will take 2 hours to move to a point 200km away, even if that calculation isn't really correct because you're ignoring the times it takes for the car to accelerate up to 100km/h and to stop. To link this metaphor back to economics: the issue is that the equivalent of the car accelerating -workers learning a new trade and their society reinvesting into the correct means of production to shift to producing good B- is much slower and costly, which makes the relation between supply and demand and LTV less obvious.
A common misconception is that LTV doesn't calculate price, but work-value, which is related to price, but it isn't enough to explain it. Someone attempting to use LTV to explain price will fail under specific circumstances, such as a monopoly where a single producer owns all of the available prime resources in that market (many of these scenarios where LTV falls short are usually the same in which the invisible hand of the free market fails to properly distribute goods and services, and this is not a coincidence). An equivalent in physics would be to use the formula that you'd use to calculate the gravitational pull that an object would suffer when falling in the Earth - to calculate the gravitational pull that an object would suffer in Saturn's orbit. The equation is "correct", but you're using it in an incorrect scenario: you need to use the expanded formula to switch the Earth's and Saturn's masses.
And finally, to apply all of this to the matter at hand: is LTV a good tool to simulate economics in a game such as Victoria? It is a good part of the equation as it provides an initial approximation to price at a very low performance cost. You can complete the equation later with pulls and bids of the different actors to calculate the variations provoked by scarcity and negotiation power (or supply or demand) - not sure if Paradox will use exactly bids as that may require more performance than strictly required and they may have a different method.
Supply and demand has limitations to explain price. LTV is related to price, but doesn't attempt to explain it, and it's more related to supply and demand that it is usually understood (getting into this pretty soon), and it also has severe limitations to explain price. Marginalism, unlike most supply and demand theories, mystifies or ignores the relations of power and negotiation implicit in the distribution of goods and wealth (which is fundamental to calculate price), if you want to learn about this I recommend you to look up information on game theory applied to simulation of economics, which has birthed the most precise tools used by financial institutions to study the market.
My main point of contention here is that LTV was promoted by both Smith and Ricardo because it was tightly linked to supply and demand. Let's take the theorical assumptions of the self-regulating market: there is more production of good A than it is required, and there is less production of good B than it is required; this will provoke the price of good A and the profits and wages of its producers to fall, and the inverse process will happen to good B and its producers; and this will provoke producers of good A to switch over indefinite periods of time towards producing good B. When the Labor Theory of Value states that the value of goods A and B are derived from the work poured into producing them, it's because it projects these shifts of production towards an infinite time into the future, the same way you'd consider correct to calculate that a car that moves at 100km/h will take 2 hours to move to a point 200km away, even if that calculation isn't really correct because you're ignoring the times it takes for the car to accelerate up to 100km/h and to stop. To link this metaphor back to economics: the issue is that the equivalent of the car accelerating -workers learning a new trade and their society reinvesting into the correct means of production to shift to producing good B- is much slower and costly, which makes the relation between supply and demand and LTV less obvious.
A common misconception is that LTV doesn't calculate price, but work-value, which is related to price, but it isn't enough to explain it. Someone attempting to use LTV to explain price will fail under specific circumstances, such as a monopoly where a single producer owns all of the available prime resources in that market (many of these scenarios where LTV falls short are usually the same in which the invisible hand of the free market fails to properly distribute goods and services, and this is not a coincidence). An equivalent in physics would be to use the formula that you'd use to calculate the gravitational pull that an object would suffer when falling in the Earth - to calculate the gravitational pull that an object would suffer in Saturn's orbit. The equation is "correct", but you're using it in an incorrect scenario: you need to use the expanded formula to switch the Earth's and Saturn's masses.
And finally, to apply all of this to the matter at hand: is LTV a good tool to simulate economics in a game such as Victoria? It is a good part of the equation as it provides an initial approximation to price at a very low performance cost. You can complete the equation later with pulls and bids of the different actors to calculate the variations provoked by scarcity and negotiation power (or supply or demand) - not sure if Paradox will use exactly bids as that may require more performance than strictly required and they may have a different method.
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My, admittedly extremely limited, understanding of the Marxist version of the LTV is that it doesn't necessarily argue prices don't arise from margins, supply, demand and various subjective factors. It simply argues that these prices don't necessarily reflect the actual value.
As for how it works in-game... who knows. According to the last stream, privately owned businesses determine wages for themselves, so presumably, there has to be some mechanism as to how they do that. It'd make sense for the scarcity of labour as well as labour organization (Unions etc.) to have an impact on that.
As for how it works in-game... who knows. According to the last stream, privately owned businesses determine wages for themselves, so presumably, there has to be some mechanism as to how they do that. It'd make sense for the scarcity of labour as well as labour organization (Unions etc.) to have an impact on that.
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dang, reading through this thread, im surprised at the amount of actual marxists that exist on this forums. I didn't think people still held onto discredited economic theory from two centuries ago.
to the Marxists: No, the game doesn't have to stroke Marxism's ego. It can represent other theories of value.
to the Marxists: No, the game doesn't have to stroke Marxism's ego. It can represent other theories of value.
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Yup. This thread, and moreover some of the responses to my previous posts, actually awe me as to how many people are ready and willing to not only defend the idea that people have the right to say what is better for everyone else, but also to undergo lamentable sophisms to that effect.
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You have plenty of people buying into neoliberalism too, meaning they're in good company apparently.
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Those damn "neoliberals", always ready to setup a state police department to force everybody to think like them, unlike other more humane lines of thinking.
In any case this, all of this, is such a ridiculous discussion, as it is for the stellaris people to discuss unified field theory. I actually regret ever posting here at all.
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Literally, neoliberals did this, what do you think Pinochet was doing?
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I was talking about people holding over discredited economic theories, but I was sure you would have thrown yourself into some reference to Soviet Russia in one way or another.
I'm sure that repeating the strawman ad nauseam will convince someone someday. Anything to keep that terrifying government of yours at bay.
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Go (nonproverbially of course) ask milton friedman if that asshole pinochet was a liberal.
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Go ask the Chicago Boys (who Friedman educated) that set up his economy if they were liberal.
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Suuuuper argument comrade. Like calling liberals "imperialists" like you or someone else called me above.
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A good point if ever one was made ever since this thread started. But this is politics, apparently anti-trumpian (who is also a jerk in lenin-levels if you ask me btw) whilst friedman always said he was nonpartisan, and critical of ALL governmet. In fact me being not american I have no beef here.
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No, there is obviously a frightening amount of people like you, especially in North America for some reason.
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