: Thats circular - £1 = Objects that could be bought with £1. tahts what you're saying, i.e. that I value internet time at £1, because with £1 I could buy the Observer on a Sunday, that doesn't tell me how The Observer comes to be £1 in price.
All it tells you is how you are discerning between the two - and thats all it needs to tell you for your choice. To make your choice you need know nothing about how many people worked on either, when they took tea breaks, what machines were used - you dont need to know how the observer comes to be £1. Its priced so because its sellers wish to gain lots of £'s and have figured that £10 is too much (people would choose other things with that £10 too often leaving them with too little) and 10p is too little (people may buy it but but they would lose money, it may cost 53p per copy to make - which btw says nothing about the other 47p being 'exploited' out of anyone)
: So indeed you cant be saying "half an hour of internet time is as valuable to me as other
things I could buy for one pound" - you are saying it is superior to those other things.
: But if The Observer = £1, and Internet Time = £1, then either we are talking mathematical nonsense, or they actually do have an equal exchange value - the difference being in terms of the use value,
I was chastised for suggesting such a link before but yes - the 'utility' you gain from the internet is more than for the observer so given the two have the same exchange value you choose that which gives you more 'utils' - a subjective (individual specific) evaluation.
: No, if I am equating one with another, I must have a basis for equation. If A=£1 and B=£1 then there *must* be some feature common to both A & B that can be measured in £'s. Otehrwise, what am I saying?
You are relating one to the other. a=1, b=2, c=1 etc etc. Alll you are doing is comparing them - the only basis you use is that which reflects your personal preference.
: I mean, if the common factor is my desire, what am I measuring my desire in?
Internet = 50 'desire units', £1 EV
Observer = 40 'desire units', £1 EV
Choice made. That is all you are saying.
: Erm, banking Crisis of 1848? Specie circular of 1837? Crises are not cimple crises of confidence
what I described was - the above is not connected to my point.
: plus all currency nowadays is backed up by the state, and guaranteed by it - hence why (listen up you keynsians) state borrowing leads to inflation...
They don't listen. The guarantee is not as solid as actual 'stuff' although the 'value' of money as a means to exchange is essentially based upon all tradable goods a government can only enforce money with a position of coercive monopoly over its supply, its 'guarantee' stems from more of a 'promise to tax your son' than 'promise to pay the bearer'. Another reason why getting rid of governments is hardly likely - they would need to be seperated from currency long before!
: But barter is not money, it requires a state to decide on the official specie...even gold, unless somehow Gold is magical and contains some mystical exchange value within it.
You mean its not magical!! Anyway...gold is one option, so are metals etc - basically things people want. Gold & diamonds may be pretty but they have important industrial uses, so do oil, chemicals etc etc. It may be outlandish to have a note say "I promise to pay the bearer a lb of oil, some pennicilin and a sack of potatoes' but essentially money is based upon something actual - the above 'gaurantee' I alluded to is that govt promises to expropriate the oil & potatoes should the deal go awry - which it doesnt (thankfully, coz they couldnt ultimately fulfill the guarantee)
: Which is most economically rational? Knowing that lots of people want, say, rubber, does not calculate its cost in comparison to otehrs, i.e. its attainability, its economic value. Knowing that Rubber requires more man hours than Wood to obtain would give us a rational basis to decide on between them (don't forget, man hours convert to resrouces in terms of food etc. being converted by the humans in question). your model just takes into account that rubber is more fashionable - except it can't, because money has no inter-subjective metric for you. Labour time allows for an objective comparison of resource allocation: at least, the force of Von Mises' argument is that comparison between comodities in form of money is an economic necesity - hence, by turns, it throws light on how money works.
Yet the above model becomes meaningless if we decide, using labor time, that option 2 is best, but find that the exchange value of wood is sky high and really we should have gone for option 3 because that costs us x$ less in exchange - ignoring exchange value is ignoring all those other decisions poeple are amking about how much they want to exchange for this and that.
: We would know if a deal was fair.
No, we could judge personally whether it seemed fair to us at that point - not quite the same absolute.
: Because its not - its the relative exchange value of products to eachother that allows the
economy to function. And the exchange value is determined by various incalculable factors
such as 'simple desire', ability to exchange etc etc.
: But that does not give us any capacity to economise;
If you mean 'cut down' then essentially it wouldnt - you would cut down on things whose exchange value got too high for you.
: further, you can't just compare A and C, because such comparison would be meaningless, you need a third term, a bench mark,
You dont,only a body or group intent on over riding the millions of relative decisions made by consumers would want to know a third measure - in order to impose pricing - whether by money or by instruction to produce/consume.
: which they can both be taken in ratio (A is taller than b is pretty meaningless, unless set in scale by a third term - like putting little men into pictures of dinosaurs to establish scale).
That would just be comparing dinosaur size to human - I think you mean an objective absolute.
: But we must plan, we plan our businesses, we plan our personal futures, if there is no rational basis, there can be *no* rational economics. Every econbomy is planned.
I thought you meant central planning. Individual planning 'works' because you dont have to know what every other person is up to.