This gets into the idea of "time preference" as well -- you wanted something immediately, and while you could have paid a cost in time (ie. leave the place you were at, go find a cashier at a grocery store or a bank, etc. and get 10 one-dollar bills), you traded $1 in exchange for $9 + a lot of time saved. Scaled up, differences in time preference is also why we have investors and home loans. Some people need money *now*, and so they borrow it in exchange for a higher return payment over time -- made to people (investors) who don't need the money as badly now but like the idea of getting more money in the future. Everybody's time preferences are constantly changing and they contribute a lot to how much monetary value we place on the things we buy or sell. Imagine selling your car, or even a house... Quite often, the longer you can afford to wait, you may be able to find a buyer who's willing to pay top-dollar. But if you need to sell it tomorrow, you may end up lowering the price -- because the speed at which you get the money you need is just a little more important than how much you actually get.
LOL, economics in state funded school; good luck. That would get in the way of telling kids they would be in a sweatshop if capitalists had their way and they only way to prevent that is giving all your money to socialists.
@@nustada There is an irony though considering what schools were made for. Never said it was possible. There should be no starving people but tyrants gonna tyrant.
@@nustada Ahh yes, let's teach them how to write like a professional author and do all the math your phone can do and less, instead of giving them the economic background they need to be a functioning adult. Oh yeah, and don't forget to add 6 years of the same science curriculum every year on top.
FEE will do close to a hundred programs in high schools this year... And episodes from this video series have been included in educational DVD services that go to classrooms all over the country. I haven't yet spoken with those distributors about the Bob to the Future story arc, but I suspect they will like it a lot. I'm also probably going to turn the whole thing into one single video at some point.
Here's an example of subjective value from my great-grandparents. Sadly, I only heard the story second hand, as they passed before I was born, but I'll try not to leave anything out. My great-grandfather was a pig farmer. In cash terms, he was very poor, but my family never lacked for the essentials. During the Great Depression, rationing hit a lot of families very hard, but my great-grandfather was able to turn it into an opportunity. He had two old cows for milk, a few dozen chickens for eggs, and plenty of pigs for meat. The ration tickets for those items had very little value to him, so he traded coupons with people from town. They got extra rations of milk, meat, and eggs. He got extra sugar. The people from town were willing to do with a little less sugar in return for more substantial food. The extra sugar wasn't a frivolity. It was put to good use making preserves, which could be used, sold, or bartered, and curing hams and bacon to extend their storage life.
Luke Diehl ...rationing wasn't during the Great Depression. It was during WWII, when the government rationed civilian goods so they could feed the troops on the front line. During the Great Depression, your great-grandfather was much more likely to see his pigs killed by government fiat, and then the pigs dumped in a hole and gasoline poured on them to keep hungry people from eating the meat. You know, to artificially inflate prices and keep FDR's oh-so-important price controls working.
@@StarWarsomania Rationing did happen during the depression. Not to the same extent as during war time, but it still happened. I know I'm not getting that fact mixed up because his son, my grandfather, used to tell about the time he was sent down to the store with a pocketful of coupons to get sugar, and they didn't want to give it because they assumed all those coupons were stolen. That couldn't have happened during WWII because my grandfather was in Germany at the time. He was about 8 at the height of the depression. Edit: I did a little fact check, just to make sure that an old man's memory hadn't failed in recounting the story. The first food stamps were issued in 1939, many economists say that the depression didn't officially "end" until the US entered the war in 1941, and my grandpa was drafted in 1942. It's a narrow window, but it checks out.
StarWarsomania FDR was a buttface. He was an awful man and an equally awful president. He was manipulative and could even be racist, as he was to Japanese-Americans. In addition, he was in bed with the Soviets. Harry Truman was far better at the whole president thing, far nicer a guy, and no friend of the Soviets. Plus, he wasn’t elitist.
@@lukediehl1210 Try again. "Civilians first received ration books-War Ration Book Number One, or the "Sugar Book"-on 4 May 1942." The Office of Price Administration (OPA) wasn't even *created* until August of 1941.
@@StarWarsomania Technically, we're both right. The ration book you reference was issued in spring of 1942. The blue and orange stamps from the FSCC were released in 1939. I mistakenly conflated the two, and I thank you for correcting me. Second, why are you bringing this back up months later? Why is it so important for you to prove that my grandfather was a liar? I made my point about turning adversity into opportunity. The only thing that's changed is that apparently, my grandfather misremembered the year in which this took place. He said 1939-40, when it couldn't have happened before 1942. Is that really a huge deal?
These videos should be shown to all high school students. My high school economics teacher, The Great Karnak (a Tonight Show writer ripped him off) demonstrated the Principle of Diminishing Returns by drawing Hershey bars on the chalkboard. The first had a smiling kid next to it,, the second had a neutral expression, the third had a frown and the kid was throwing up on the fourth, just like Bob's tacos.
it is not it is in fact quite easy to pick apart if you know some basic stuff about how corporations manipulate the market ill give an example take insulin as an example if you switch to a cheaper brand that brand might not work and that means you will die and companies have raised prices because you don't get a choice or how about internet providers some places you only have 1 choice and you might need the internet to go online and search for a job to make a wage so you can survive
@@danlarsen5858 they can only do that because of the state tho. and while i agree that this isn't "the best thing to ever happen to economics education", it's still pretty great.
The best way I have ever been able to explain subjective/relative value to people is to put the monetary cost of a item in terms of how many hours you have to work to pay for it. Very simple and very easy to factor out on the spot and above all it puts the want Vs work relation in a format everyone can relate to. I told this to a younger guy at a place I buy parts from fairly often about 2 months ago. Today I was there again and the subject came up. WOW! did he take it too heart! Right down to his dating preferences in fact! No point in blowing 15+ hours of labor to impress a gal for less than a hour knowing he isn't going to ever get anywhere good enough to matter. 😂
FEE's mission is economic education, kids included. Who cares how UA-cam arrives at its video suggestions, it they help reach an audience that would benefit, all the better.
@@OokamiKageGinGetsu yeah, but it's also not actually aimed at kids by UA-cam's definition. And now it's getting all these preschooler type related content suggestions because it's animated. It's a mess.
Trying to plan the economy from the top down, controlling for every factor, is a logistical nightmare far beyond anyone's capacity But when people work together for their own benefit we're actually working in tandem to find the best outcome, whether we're conscious of it or not Ironically, there's more collectivism in a free market than in a singular government entity imposing its individual will upon the masses
I know what you mean, but it is more than a logistical nightmare. Since value is subjective and can be quantified only in a hierarchy of needs, not in monetary units and since it fluctuates over time even for the same individual, it is impossible for anyone to even begin to evaluate a reasonable balance between supply and demand. Unless, of course, that community is at the lowest level of survival as was the case for most of humanity's past. Central planning has worked, barely, when the issue has been how to get a few dozen closely related people survive from one day to the next. More people or higher ambitions and it collapses into wasteful bureaucracy and violence. Top-down planning is unavoidable in companies and this is why most of them use up their resources and go bankrupt within five years.
@@gmilitaru I suppose you could say businesses are centrally planned, though individual workers can contribute to making it run more efficiently, like a truck driver planning the most optimal route
@@gmilitaru but corporate management is under strong market pressure, the gov often is not. There are strong incentives in companies to use best practices in management, which often means paying and treating your employees right, because if not you can loose valuable employees quickly to competitors who do it. The government is not that pressured as an employer and can get away with poor management practices without loosing market share. If decentralized management is really the way to achieve the most productivity, companies who adopt it will outclass competitors and this management style will quickly be copied and become industry standard.
Agreed but "collectivism" in the free market is the wrong word, it's peaceful economic "cooperation". "Collectivism" is an icky word, it creeps me out. "Collectivism" requires the forced association and regimentation of individuals. As Von Mises wrote,"The main characteristic of collectivism is that it does not take notice of the individual’s will and moral self-determination."
It's SAD COLLEGE GRADS CAN'T COMPREHEND ECON 101, ESPECIALLY THE ONES WHO ACTUALLY STUDIED ECON. Then again an F turns into a C so easily with grade inflation.
I was in a corporate finance class in graduate school (a business program for people with undergrad science degrees). Half the class refused to believe in the "invisible hand", and insisted that prices are set by bureaucrats with a sticker printer. Then again, this was in California.
HBS grad here: The price of anything sold has no connection to the cost to produce. You can't sell anything for more than people are willing to pay regardless of your cost. And you can sell anything well above its cost if that is what people are willing to pay.
What the market will bear. A piece of used chewing gum is not worth anything really. _But_ , if you can verify that it was chewed by Hollywood's hottest star as long as you have that documentation it could be worth hundreds or even thousands!
I love freedom toons and I've watched every video on that channel but it's never shown up in my recommended even once. Ive been watching these videos for less than a day and every tenth video in my recommended is one of these. I realize that they are made by (or at least with) the same person, but they are very different channels, and to me this is a clear sign of how the UA-cam algorithm silences content they don't agree with.
Sheamus makes Bob look like a complete idiot, but he responds surprisingly well to information that contradicts his previous beliefs. If every idiot was as objective and rational during debates as Bob, we *would* live in a utopia. lol
Well my local Target store is hiring at $13 an hour. If the economy is still good in a couple years I bet it will be up to $15 and hour all by itself and Bernie can then be happy.
Cool vid, but glossed over a few points... A) prices are set not so much by what it cost to make the one that is being sold now but by how much it will cost to make another one to sell. Easy example is gasoline: the gas station doesn’t care what it *paid* to buy the bulk gasoline that it resells, it only cares what it will cost *to buy more* . If I own a gas station and paid $3/gal for the gas currently in my storage tank, and it will cost me $4/gal to buy more (because gas prices suddenly spiked) then I’m not going to sell for less than $4/gal because once I sell I have to buy more at $4/gal. Conversely, if the bulk price suddenly went down to $2/gal then I will lower my price accordingly (even to the point of appearing to “loose” money on a gallon) because I need to sell what I have so I can buy more at the lower price, and sell *that* at a profit. (Sitting on my existing inventory only makes sense if I know with certainty that the price will go back up before I can lock in a contract for delivery at the lower price). B) the taco example deals with “diminishing marginal utility” more than different people valuing different goods differently. All goods have diminishing marginal utility, regardless of who is buying (the 400th taco will *always* be worth less to a particular buyer than the 1st taco, regardless of how much the buyer happens to value the first one) C) people are, on an individual level, often not particularly rational in how they value things, and that irrationally can manifest itself on larger scales, for example Veblen goods (luxury goods where demand *increases* as price increases) and Giffen goods (low status goods where consumption decreases as price decreases, ie brown rice in SE Asian countries) Probably a bit much to try to cram in to the vid, but none the less I think worth mentioning. As an aside, I noticed many people commenting that they had kids vids showing up next in their feed... I have cartoons as well, but they are all on adult subjects, such as CPG Grey “The Fable of the Dragon Tyrant”, Wisecrack “Toy Story 4: Is it Deep or Dump”, and Mr. Stick “The Science of Chi”
The Marginal Revolution (from which we get terms like "diminishing marginal utility") was a direct product of Carl Menger's argument for a Subjective Theory of Value - which is what this is about. Your examples are fine, but we are talking about a general principle underneath everything.
Veblen goods and the fact that their increasing price raises demand does have some rationality to it; as the goods become more difficult to afford, they become more of a symbol of an individuals personal wealth, which comes with its’ own perks, such as attention from the opposite sex.
Foundation for Economic Education I didn’t realize that marginal utility came from subjective value, I thought it was simply an abstract consequence of how the demand curve... uh, “curved” with each increment of supply. Anchoring it in subjective value makes sense, after all there should be a reason the supply and demand curves curve the way they do. I fell into the trap of thinking the numbers are meaningful in and of themselves, but the meaning has to come from somewhere. Thanks for the clarification (it’s been more than 30 years since I took eco 1, so refreshing my knowledge is good)
CosmicBiohazard good point, that the behavior which classical economics considers irrational does have a rational component, such as the valued added from increasing one’s belief in ones own sex appeal (even if the increase isn’t seen by others, it’s what the individual believes about themself that matters). Careful study of how individuals value incremental increase in their perception of their own appeal could perhaps fully explain the unusual shape of the demand curve for Veblen goods. And for all I know such research has already been done; as I admitted in my prior comment I know little of economic theory beyond what I was taught in high school and freshman year of college.
UA-cam's new algorithm basically puts all cartoons in their children category without knowing it's substance. UA-cam would put hentai in the children's section
@@pedropradacarciofi2517 COPPA and UA-cam's new rules. It's a pretty big deal. I don't know how one of the biggest businesses in the world "UA-cam" could be run so incompetently.
SilverSmoke right there is why. There’s a certain point where the bigger the business, the easier it is to let something be ignored/allow for mistakes in greater numbers. This is usually due to a lack of competition, which allows quality control and interest in keeping customers satisfied to be reduced because they literally have no choice. Google hit this critical mass size a little while ago.
ATTENTION You are probably all noticing the children's cartoons as suggestions after this video. The new algorithm is clearly not working well, so maybe we need to help correct it. If you can click the dots next to the video suggestion and select "not interested" it might help balance things out. Maybe UA-cam will notice a problem? Surely investing a few moments of your time to potentially help channels such as this one is going to be worthwhile compared to some of the things you''ll do today.
Wouldn’t the seller want to get the highest amount as possible for a product while the buyer would want to get the product for the cheapest amount possible?
Yeah. The problem is imbalance of power between buyer and seller. If my options are get a job or not make rent and go out in the street, and my potential employers options are hire me or hire the next shmuck who walks in the door. I am at a disadvantage and will likely end up working for long hours and low wages. Likewise if my options are pay for the medicine or die, and the hospitals options are to give it to me or loose one customer, I'll likely go bankrupt.
I gotta say I've always liked your videos and you're great at putting things into perspective, however I think your view on consumerism has always been to optimistic. I don't think you ever take in account the potential harm in advertisement. Yes in an ideal society the individual decides purchases solely based on what they know they need, but we mostly don't know what that is and but more things than we need and although advertisement is of course important for us to become informed of a product that we may indeed need, it mostly just sublimely tells us "you need to buy this or your life won't be complete". My best example of this is the diamond-industry and how they've pushed diamonds as jewelry. Basically diamonds are completely useless, and in extreme abundance, but since they're monopolized and had a very successful ad campaign like 100 years ago, people have since become convinced they need to buy diamond rings to get engaged, and that the ring has to cost 3 months of salary, and this has nothing to do with what the individual needs.
It's not just the value of the object. Sometimes it's also the value of the gesture. People could easily get plain gold or silver wedding rings, and you may be right that part of the reason they don't is because of rampant advertising. I would argue, however, that the main reason why people buy expensive wedding rings is *because* they're expensive. A wedding ring is seen as a symbol of how much you're willing to invest in the marriage. If you're willing to sacrifice three months of pay for the ring, then your potential spouse knows you're serious about committing to them. You may think we shouldn't have this tradition, but I don't think it's an example of a flaw in our free market.
0:59 That would explain price negotiations. I still hate it though. To me negotiating a price is like going to The International Bureau of Weights and Measures and telling the staff that their kilogramme weighs 900 grammes
@@colebrockman9579 Close, but definitely on the right track. It's deciding that it's not worth as much, after already having one. And by the time he's had (beyond) his fill, the value drops to zero. Kudos to you.
Its worth noting that if people value a product less than the work and materials put into it... People stop making it, or at least they do once they realize they're losing money (or unless they value getting the good out there more than their money, which is rare) However, at the very least, a lot of materials can be recycled, so at least its very rare that materials are so transformed that you cannot at least charge the material cost for an item. ... It is much more often that people value their time and effort more than the supposed value added to the object crafted from said materials.
What I think Gunner is trying to say is that the vast majority of human learning is people learning from other people. Epiphanies and insights are rarer than you might think, and even if you have regular epiphanies, it's much more efficient to learn from others. Hence the saying, you don't need to reinvent the wheel.
4:44 is exactly the future I imagine for the world. Two robots who literally have no soul consuming resources for the soul purpose of financial profit. After all, the market exists for us to serve, not the other way around.
@@adamsnyder7359 yes this true. It's just a tool, a phenomena. It's not a god and shouldn't be worshiped as a good in and of itself. You can't argue that a future of soulless consumer drones is a dismal future.
Capitalisme is a great tool used by irresponsible consumers. We have the technology to do great things but we are messing up the planet big time. It's human nature.
Why is it when ever I watch this channel, my auto play list and recommended vids on the right are all shows for toddlers?. maybe its suggesting Economics are simple enough for children?. lol
Well, if it makes economics lessons interesting for my son, I don't really see the issue. Of course, I'm speaking as a dad, so you may or may not quote me on that.
These videos explaining basic economics are so needed today; in a society where the failure public school SYSTEM does not educate children about something so imperative.
Because of competition. Consumers are not charged base off how much they value de goods but based off the cheapest price the producer can sell them. The cheapest price wins. You can not have the same item at different prices in 2 adjacent stores for example. The further the stores are away, the more freedom they have with pricing, but competition will make them align their price to the lowest possible. If you go in market in some middle East countries, you are charged based how much you want the product. If you show the seller you really want it. He will charge you way more for it.
They're actually not all that consistent. Pretty much every week, retailers and grocers revise prices on the items they sell. Gas prices change every day. And that's to say nothing about stock prices which are extremely volatile and can change minute to minute, sometimes in enormous swings. But... I think the spirit of your question is why you can be relatively certain that you can get something like a McDonald's cheeseburger for a few dollars pretty wherever you go (at least in the US). The answer to that question is that the larger and better established the market for any good or service is, the easier it is for buyers and sellers to stabilize their expectations. Keeping the McDonald's example, they have the benefit of experience from literally billions of customer interactions and over time, their prices have settled around certain levels that are acceptable to the majority of people. What we see is sort of an expression of the average of millions of people's preferences. And since we're all human beings, there are often some broad similarities in what we value that can be generalized. It's also super inconvenient for any producer that sells a large quantity of anything to negotiate different prices with every prospective customer that walks in the door, so just standardizing prices a little bit is helpful. But that's all a very simple way to think about it. Even if the average person thinks a Big Mac is worth about $4, and even if it's inconvenient for McDonald's to negotiate a different price with every customer that comes in the door, individual customers still have very different values that change over time. Some people are vegetarians and vegans or just hate fast food and wouldn't buy a Big Mac at any price. Other people love a Big Mac and would pay $10 for one if they had to. Even over the course of the day - like Bob in the video - you'd be willing to pay one price if you hadn't eaten all day, and a completely different price if you were already full. It's easier to see this in action if you look at situations like garage sales where buyers and sellers are haggling over prices directly, but it's still true at the macro level. Hope this helps.
I must admit as well, when it comes to fast food, there’s a small amount of value added by the fact that I know the exact, unchanging cost of my regular order and can have exact change ready when I go there. It’s satisfying.
The primary factor in value is cost to produce. Even if someone were willing to pay $10,000 for a taco, a taco only takes a few dollars to make, so he'll pay a few dollars. Now, with monopolies and tariffs, you can be forced to pay $10,000 for medicine worth only $50. Medical companies have pulled exactly that stunt, with life-saving medicine.
No, cost to produce just provides the floor for price -- no one can sell at loss at least in the long run. Theoretically sellers would be in competition and the one who asks for least profit above cost is the one who gets the deal, and that's how free market capitalism keeps prices down. When it doesn't work, it's usually due the market not really being free: regulation, monopolies etc. Just because you spent 10 years making something doesn't automatically make it worth anything -- it's only worth something if someone is willing to pay for it. Just ask any starving artist. Yes, this can and frequently does mean some things are not worth doing: Their cost to produce is higher than anyone is willing to pay for them. Sometimes you only find that out the hard way.
Van Ivanov Just because you're willing to pay $10,000 for a taco doesn't mean it wouldn't be nice to get it for $3. This is called haggling; you start at the amount you think you might be able to get away with and concede ground when necessary. No one in their right mind would offer $10,000 up front for a taco, but they might get up there eventually if they're really bad at haggling. Even though prices in most US stores are set and non-negotiable, you're still basically haggling every time you buy an item for less than your price ceiling.
One interesting question is: is life-preserving medication worth all your money? Otherwise you die, so that might seem to be the case. But it's still not universally true. I might choose to value leaving an inheritance to my children more. After all, we all die eventually anyway. And there's lots of stuff I could be doing to extend my lifespan (exercise, eat healthy etc.) that I choose not to do. Living as long as possible at any cost is not what most people actually choose.
Gold! Gold is an excellent example of subjective value. It is too soft for use in weapons or tools, melts a little too low to really be effective in cookware (and because it is so soft it would not be very durable) so despite good thermal conductivity won't work for that. It is heavy, but not quite as heavy for a given volume as some other materials. Other than in electrical connections, gold has very little practical usefulness. Yet it is shiny and rare so wars have been fought over the stuff! Steal has lots of uses. But, is so readily available that other than in industrial quantities it has very little material value. Then there is copper......
Charlie gave Bob tokens because she valued him learning subjective value more than she valued the tokens; however, not only would Bob not have traded the tokens in the hopes of him learning economics at this time or atleast from this source, and they showed he was likely willing to pay to not learn econ, but also in receiving the tokens he is showing clear signs that he arguably had to be bribed to care about the subject.
I can fully support this to be true as I've felt that very same way. During college the local store there sold only coke products. I bought the dinks but really wished mountain dew was there. But while drinking the coke products I fell in love with Dr Pepper. So much that when they finally switched to Pepsi products I wished they had Dr Pepper. So much that I brought Dr. Pepper cans to college which lowered my buying from the store.
Great episode!! I think you broke UA-cam's suggested video algorithm though... My sidebar is filled with some really... "interesting" videos which are only related because they are also animated or have a cartoon thumbnail. Peppa Pig? Toy reviews? Nick Jr? And a video called, "My step dad got me pregnant" 😲
It's a more realistic result than the Federation, where everybody has access to holodecks and infinite gourmet food from replicators... but nobody is fat and everybody is somehow actively doing something productive (even if only artistically). Gene Roddenberry clearly wanted to show the best humanity could offer if scarcity magically vanished, but he forgot to account for the overwhelming laziness of humanity so perfectly embodied by today's screen-obsessed culture. That said, may the Profits guide you, Daimon FreeStyle.
That was precisely my point. Star Trek showed the Federation as a more or less ideal socialist utopia - where almost everyone "does the right thing" because everyone "has their basic needs met", and thus everyone can "self-actualize" (a la Maslow's hierarchy). But as I said, he didn't account for human laziness. The human drives to "be significant" and "be productive" must continually outweigh our desire to "have fun". The Federation (particularly from TNG onward) with its replicators and holodecks offers plenty of fun and artificial significance while requiring little, if any, productivity. Yeah, you'll find a small minority, who like Scotty, get their kicks from reading technical journals and fiddling with engines. You'll find some folks who really love exploring, or combat, or whatever. Starfleet clearly shows the best of that society, but the entire civilian population could frankly just kick back and spend their days doing jack squat of importance.
A soda made in ten years for 15$ will still be sold in the same vending machine as a soda made in a matter of seconds for 15 cents. They’ll both be sold for a dollar. Amount of labor put in makes no difference in how much people are willing to pay for it.
Yeah but the problem is if one side has a serious imbalance of power over another their subject value crushes you like a bug. If I HAVE to sell the thing I produce or starve, but you have much less urgency, I might place great subjective value on it due to the labor I put into it, but I might still have no choice but to sell at any price.
That would only happen if I had a monopoly on all industries using stuff you produced. Otherwise other people will be competing for whatever you made. If nobody else if willing to buy it, it means what you made isn't worth your labor and you'd be better off for yourself and the society making something else.
It seems like you kind of glossed over needs, you have talked about how options give power in the perspective of getting needs But not including the possibility where an option is not given like visiting the ER at an expensive hospital or where an oligopoly exist and they do not go in each other's territory
@Marc T thank you, your response is very informative. I was also wondering, Would you perhaps describe yourself as an anarcho-capitalist, minarchist or other political view?
If you're talking about a value distortion when there's a gun to your head, then you are correct. If you're talking about government mandated price controls and the like, that is still fiction.
@@billmelater6470 no i am talking about when you can not buy a car, get a job, or a home with out a small plastic card and being finger printed. i am talking about you being charged thousands of dollars in taxes all for not having the right kind of paperwork.
@@billmelater6470 i would love that but that is pure fiction from the communist manifesto. a true utopia would be one were there is no class or government, were everyone keeps what they earned. were skills and talent are rewarded and not trickery and thuggishness
@@nealjustus9500 Well, not so much as far as the manifesto is concerned. I'm not saying there won't be "money" or an exchange medium. The idea behind a cashless society and going to a complete digital medium like credit and debit cards are now means that each and every purchase is made under full view of any government entity or what have you. This would allow total control over market behavior.
It’s really refreshing and nice to see a female narrator or lead character in one of the skits not being unbelievably condescending and rude and vomiting left wing talking points
@@FEEonline I'm honored that you responded to my request / question. I thoroughly enjoy the show and I'm looking forward to you loving your work and making more. I hope it doesn't negatively affect your Channel but I would love to hear more about it from your perspective. Thank you again for the message. Your works are the highlight of my UA-cam experience.
This example for the socialists in the room why capitalists aren't exploiting the workers. The worker values the money more than their time used to earn the money. It is a free exchange.
I once traded a 10 dollar bill for 9 ones.
The vending machine only took ones, and the guy only had 9 ones.
basically a Currency Exchange Fee
Good example. $9 was temporarily worth $10.
I'm gonna remember this comment!
In hs there was a guy who hated pocket change and would give me like 1.10 for every paper dollar I gave him.
This gets into the idea of "time preference" as well -- you wanted something immediately, and while you could have paid a cost in time (ie. leave the place you were at, go find a cashier at a grocery store or a bank, etc. and get 10 one-dollar bills), you traded $1 in exchange for $9 + a lot of time saved.
Scaled up, differences in time preference is also why we have investors and home loans. Some people need money *now*, and so they borrow it in exchange for a higher return payment over time -- made to people (investors) who don't need the money as badly now but like the idea of getting more money in the future.
Everybody's time preferences are constantly changing and they contribute a lot to how much monetary value we place on the things we buy or sell.
Imagine selling your car, or even a house... Quite often, the longer you can afford to wait, you may be able to find a buyer who's willing to pay top-dollar. But if you need to sell it tomorrow, you may end up lowering the price -- because the speed at which you get the money you need is just a little more important than how much you actually get.
Man I love that penguin. Kids should have this in school. This would have been a fun way to learn about this.
LOL, economics in state funded school; good luck. That would get in the way of telling kids they would be in a sweatshop if capitalists had their way and they only way to prevent that is giving all your money to socialists.
@@nustada There is an irony though considering what schools were made for. Never said it was possible. There should be no starving people but tyrants gonna tyrant.
@@nustada Ahh yes, let's teach them how to write like a professional author and do all the math your phone can do and less, instead of giving them the economic background they need to be a functioning adult. Oh yeah, and don't forget to add 6 years of the same science curriculum every year on top.
FEE will do close to a hundred programs in high schools this year... And episodes from this video series have been included in educational DVD services that go to classrooms all over the country. I haven't yet spoken with those distributors about the Bob to the Future story arc, but I suspect they will like it a lot.
I'm also probably going to turn the whole thing into one single video at some point.
@@FEEonline Well that's amazing and here I just sent it to my niece. Love your content in general by the way.
Here's an example of subjective value from my great-grandparents.
Sadly, I only heard the story second hand, as they passed before I was born, but I'll try not to leave anything out.
My great-grandfather was a pig farmer. In cash terms, he was very poor, but my family never lacked for the essentials. During the Great Depression, rationing hit a lot of families very hard, but my great-grandfather was able to turn it into an opportunity.
He had two old cows for milk, a few dozen chickens for eggs, and plenty of pigs for meat. The ration tickets for those items had very little value to him, so he traded coupons with people from town.
They got extra rations of milk, meat, and eggs. He got extra sugar. The people from town were willing to do with a little less sugar in return for more substantial food.
The extra sugar wasn't a frivolity. It was put to good use making preserves, which could be used, sold, or bartered, and curing hams and bacon to extend their storage life.
Luke Diehl ...rationing wasn't during the Great Depression. It was during WWII, when the government rationed civilian goods so they could feed the troops on the front line.
During the Great Depression, your great-grandfather was much more likely to see his pigs killed by government fiat, and then the pigs dumped in a hole and gasoline poured on them to keep hungry people from eating the meat.
You know, to artificially inflate prices and keep FDR's oh-so-important price controls working.
@@StarWarsomania Rationing did happen during the depression. Not to the same extent as during war time, but it still happened. I know I'm not getting that fact mixed up because his son, my grandfather, used to tell about the time he was sent down to the store with a pocketful of coupons to get sugar, and they didn't want to give it because they assumed all those coupons were stolen. That couldn't have happened during WWII because my grandfather was in Germany at the time. He was about 8 at the height of the depression.
Edit: I did a little fact check, just to make sure that an old man's memory hadn't failed in recounting the story. The first food stamps were issued in 1939, many economists say that the depression didn't officially "end" until the US entered the war in 1941, and my grandpa was drafted in 1942. It's a narrow window, but it checks out.
StarWarsomania FDR was a buttface. He was an awful man and an equally awful president. He was manipulative and could even be racist, as he was to Japanese-Americans. In addition, he was in bed with the Soviets. Harry Truman was far better at the whole president thing, far nicer a guy, and no friend of the Soviets. Plus, he wasn’t elitist.
@@lukediehl1210 Try again.
"Civilians first received ration books-War Ration Book Number One, or the "Sugar Book"-on 4 May 1942."
The Office of Price Administration (OPA) wasn't even *created* until August of 1941.
@@StarWarsomania Technically, we're both right.
The ration book you reference was issued in spring of 1942.
The blue and orange stamps from the FSCC were released in 1939.
I mistakenly conflated the two, and I thank you for correcting me.
Second, why are you bringing this back up months later? Why is it so important for you to prove that my grandfather was a liar? I made my point about turning adversity into opportunity. The only thing that's changed is that apparently, my grandfather misremembered the year in which this took place. He said 1939-40, when it couldn't have happened before 1942. Is that really a huge deal?
I'm getting scared Bob is close to actually learning something.
madogthefirst I’m happy and terrified
T A C O S
Oh boy did he, now he's like Seamus's partner in crime with common sense soapbox.
Wow this didn't age well
These videos should be shown to all high school students. My high school economics teacher, The Great Karnak (a Tonight Show writer ripped him off) demonstrated the Principle of Diminishing Returns by drawing Hershey bars on the chalkboard. The first had a smiling kid next to it,, the second had a neutral expression, the third had a frown and the kid was throwing up on the fourth, just like Bob's tacos.
So quick summary of this entire thing is "one man's trash is another man's treasure"
Sort of... But there's more to it than that, and this fact is really important to understanding a lot of stuff about the economy.
The value is subjective quote in this episode was by Carl menger
This series is the grestest thing that has ever happened to economics education.
it is not it is in fact quite easy to pick apart if you know some basic stuff about how corporations manipulate the market ill give an example
take insulin as an example if you switch to a cheaper brand that brand might not work and that means you will die and companies have raised prices because you don't get a choice
or how about internet providers some places you only have 1 choice and you might need the internet to go online and search for a job to make a wage so you can survive
@@danlarsen5858 they can only do that because of the state tho. and while i agree that this isn't "the best thing to ever happen to economics education", it's still pretty great.
The best way I have ever been able to explain subjective/relative value to people is to put the monetary cost of a item in terms of how many hours you have to work to pay for it. Very simple and very easy to factor out on the spot and above all it puts the want Vs work relation in a format everyone can relate to.
I told this to a younger guy at a place I buy parts from fairly often about 2 months ago. Today I was there again and the subject came up. WOW! did he take it too heart! Right down to his dating preferences in fact! No point in blowing 15+ hours of labor to impress a gal for less than a hour knowing he isn't going to ever get anywhere good enough to matter. 😂
I'd love to see the scene between 3:05 and 3:10, because Bob was apparently so hungry for tacos that he started eating the freaking CART.
I think FEE has been classified as a kids show. All the other video suggestions are for kids.
FEE's mission is economic education, kids included. Who cares how UA-cam arrives at its video suggestions, it they help reach an audience that would benefit, all the better.
@@rayr5950 this is a function of UA-cam's new rules in the wake of COPPA. I'm honestly not sure how to deal with it yet.
Ok, see I thought it was because I watched the DragonTales theme 20 times in a row.
Nostalgia is my drug of my choice.
@@FEEonline Hey, it's a lot better than what they could be watching. Educational, entertaining, and no swear words.
@@OokamiKageGinGetsu yeah, but it's also not actually aimed at kids by UA-cam's definition. And now it's getting all these preschooler type related content suggestions because it's animated.
It's a mess.
Trying to plan the economy from the top down, controlling for every factor, is a logistical nightmare far beyond anyone's capacity
But when people work together for their own benefit we're actually working in tandem to find the best outcome, whether we're conscious of it or not
Ironically, there's more collectivism in a free market than in a singular government entity imposing its individual will upon the masses
Damn right. Plus freedom is invaluable
I know what you mean, but it is more than a logistical nightmare. Since value is subjective and can be quantified only in a hierarchy of needs, not in monetary units and since it fluctuates over time even for the same individual, it is impossible for anyone to even begin to evaluate a reasonable balance between supply and demand.
Unless, of course, that community is at the lowest level of survival as was the case for most of humanity's past. Central planning has worked, barely, when the issue has been how to get a few dozen closely related people survive from one day to the next. More people or higher ambitions and it collapses into wasteful bureaucracy and violence. Top-down planning is unavoidable in companies and this is why most of them use up their resources and go bankrupt within five years.
@@gmilitaru I suppose you could say businesses are centrally planned, though individual workers can contribute to making it run more efficiently, like a truck driver planning the most optimal route
@@gmilitaru but corporate management is under strong market pressure, the gov often is not. There are strong incentives in companies to use best practices in management, which often means paying and treating your employees right, because if not you can loose valuable employees quickly to competitors who do it.
The government is not that pressured as an employer and can get away with poor management practices without loosing market share.
If decentralized management is really the way to achieve the most productivity, companies who adopt it will outclass competitors and this management style will quickly be copied and become industry standard.
Agreed but "collectivism" in the free market is the wrong word, it's peaceful economic "cooperation". "Collectivism" is an icky word, it creeps me out. "Collectivism" requires the forced association and regimentation of individuals.
As Von Mises wrote,"The main characteristic of collectivism is that it does not take notice of the individual’s will and moral self-determination."
It's SAD COLLEGE GRADS CAN'T COMPREHEND ECON 101, ESPECIALLY THE ONES WHO ACTUALLY STUDIED ECON. Then again an F turns into a C so easily with grade inflation.
@Austin Martín Hernández She knows, she just doesn't care. There's more money to be made in scamming people with Green Tyranny
Don’t put all young grads in that corner. Lots of us are on your side!
I was in a corporate finance class in graduate school (a business program for people with undergrad science degrees). Half the class refused to believe in the "invisible hand", and insisted that prices are set by bureaucrats with a sticker printer. Then again, this was in California.
Mirza Ahmed God, California is stupid!
Alex S I think that you’re probably right, but then again, she was just a bartender. How many bartenders know very much about economics?
I made a hundred mud pies. I worked like, really, really hard on them you guys. Therefore, they are worth a lot!
What are the uses?
I mean Bob always has his heart in the right place. He just... ACTUALLY would be destructive if he was ever running the shot.
I think you mean, "calling the shots" ;)
@@nova31337 or running the show
@@nafg613 lol, quite possibly
No one should be running the show.
HBS grad here: The price of anything sold has no connection to the cost to produce. You can't sell anything for more than people are willing to pay regardless of your cost. And you can sell anything well above its cost if that is what people are willing to pay.
What the market will bear. A piece of used chewing gum is not worth anything really. _But_ , if you can verify that it was chewed by Hollywood's hottest star as long as you have that documentation it could be worth hundreds or even thousands!
I love freedom toons and I've watched every video on that channel but it's never shown up in my recommended even once. Ive been watching these videos for less than a day and every tenth video in my recommended is one of these. I realize that they are made by (or at least with) the same person, but they are very different channels, and to me this is a clear sign of how the UA-cam algorithm silences content they don't agree with.
Bob's learning?
Thanos: Impossible.
I love economics it makes so much sense, then I meet people, and they don’t
Or maybe the way Sheamus explains it, he makes it make sense 🤔🤔🤔
The toilet paper guy was living in 2020
Sheamus makes Bob look like a complete idiot, but he responds surprisingly well to information that contradicts his previous beliefs. If every idiot was as objective and rational during debates as Bob, we *would* live in a utopia. lol
not always, but yes.
This is a great concept. To help everyone learn by animation
This atlas shrugged movie seems different than the book
Well my local Target store is hiring at $13 an hour. If the economy is still good in a couple years I bet it will be up to $15 and hour all by itself and Bernie can then be happy.
Bernie will not be happy.
Bernie is only happy with government involvement.
@@Dilbert1999 Bernie is only happy when the working class is unhappy.
Cool vid, but glossed over a few points...
A) prices are set not so much by what it cost to make the one that is being sold now but by how much it will cost to make another one to sell. Easy example is gasoline: the gas station doesn’t care what it *paid* to buy the bulk gasoline that it resells, it only cares what it will cost *to buy more* . If I own a gas station and paid $3/gal for the gas currently in my storage tank, and it will cost me $4/gal to buy more (because gas prices suddenly spiked) then I’m not going to sell for less than $4/gal because once I sell I have to buy more at $4/gal. Conversely, if the bulk price suddenly went down to $2/gal then I will lower my price accordingly (even to the point of appearing to “loose” money on a gallon) because I need to sell what I have so I can buy more at the lower price, and sell *that* at a profit. (Sitting on my existing inventory only makes sense if I know with certainty that the price will go back up before I can lock in a contract for delivery at the lower price).
B) the taco example deals with “diminishing marginal utility” more than different people valuing different goods differently. All goods have diminishing marginal utility, regardless of who is buying (the 400th taco will *always* be worth less to a particular buyer than the 1st taco, regardless of how much the buyer happens to value the first one)
C) people are, on an individual level, often not particularly rational in how they value things, and that irrationally can manifest itself on larger scales, for example Veblen goods (luxury goods where demand *increases* as price increases) and Giffen goods (low status goods where consumption decreases as price decreases, ie brown rice in SE Asian countries)
Probably a bit much to try to cram in to the vid, but none the less I think worth mentioning.
As an aside, I noticed many people commenting that they had kids vids showing up next in their feed... I have cartoons as well, but they are all on adult subjects, such as CPG Grey “The Fable of the Dragon Tyrant”, Wisecrack “Toy Story 4: Is it Deep or Dump”, and Mr. Stick “The Science of Chi”
The Marginal Revolution (from which we get terms like "diminishing marginal utility") was a direct product of Carl Menger's argument for a Subjective Theory of Value - which is what this is about.
Your examples are fine, but we are talking about a general principle underneath everything.
Veblen goods and the fact that their increasing price raises demand does have some rationality to it; as the goods become more difficult to afford, they become more of a symbol of an individuals personal wealth, which comes with its’ own perks, such as attention from the opposite sex.
Foundation for Economic Education I didn’t realize that marginal utility came from subjective value, I thought it was simply an abstract consequence of how the demand curve... uh, “curved” with each increment of supply. Anchoring it in subjective value makes sense, after all there should be a reason the supply and demand curves curve the way they do. I fell into the trap of thinking the numbers are meaningful in and of themselves, but the meaning has to come from somewhere. Thanks for the clarification (it’s been more than 30 years since I took eco 1, so refreshing my knowledge is good)
CosmicBiohazard good point, that the behavior which classical economics considers irrational does have a rational component, such as the valued added from increasing one’s belief in ones own sex appeal (even if the increase isn’t seen by others, it’s what the individual believes about themself that matters). Careful study of how individuals value incremental increase in their perception of their own appeal could perhaps fully explain the unusual shape of the demand curve for Veblen goods. And for all I know such research has already been done; as I admitted in my prior comment I know little of economic theory beyond what I was taught in high school and freshman year of college.
Our current education system needs videos like this.
The return of MSpaint animation
2:29 FEE, you freaking prophet!
I love how the alien is selling tacos.
Umm is no one gonna realize he ate some of the cart as well...
Is that penguin okay? It's stuck in the vending machine and I don't think penguins should eat zest mix!
Well those commenters can shove it, I’m perfectly content hear that economics caveman talk lol
Thanks for show us first, mate.
Wait. Why am I getting videos for kids recommend to me below the video?
UA-cam's new algorithm basically puts all cartoons in their children category without knowing it's substance. UA-cam would put hentai in the children's section
I'm seeing the same thing!
@@pedropradacarciofi2517 COPPA and UA-cam's new rules. It's a pretty big deal. I don't know how one of the biggest businesses in the world "UA-cam" could be run so incompetently.
SilverSmoke right there is why. There’s a certain point where the bigger the business, the easier it is to let something be ignored/allow for mistakes in greater numbers.
This is usually due to a lack of competition, which allows quality control and interest in keeping customers satisfied to be reduced because they literally have no choice.
Google hit this critical mass size a little while ago.
I do this with gas all the time driving, the lower the needle gets the more I'm willing to pay more per gallon.
2:35 images that aged well
ATTENTION You are probably all noticing the children's cartoons as suggestions after this video. The new algorithm is clearly not working well, so maybe we need to help correct it. If you can click the dots next to the video suggestion and select "not interested" it might help balance things out. Maybe UA-cam will notice a problem? Surely investing a few moments of your time to potentially help channels such as this one is going to be worthwhile compared to some of the things you''ll do today.
In my case it has worked, it took a few lists videos, but now I'm getting better suggestions.
All of this just Worths
Todd Bolshevik in Socialist Venezuela:
_"All of this just works."_
Wouldn’t the seller want to get the highest amount as possible for a product while the buyer would want to get the product for the cheapest amount possible?
Yeah.
The problem is imbalance of power between buyer and seller. If my options are get a job or not make rent and go out in the street, and my potential employers options are hire me or hire the next shmuck who walks in the door. I am at a disadvantage and will likely end up working for long hours and low wages.
Likewise if my options are pay for the medicine or die, and the hospitals options are to give it to me or loose one customer, I'll likely go bankrupt.
1:35 For future reference, who's that fellow who figured it out in the first place?
Carl Menger was probably the most important. But it was a whole movement in the later 1800s.
do a video about what gdp even is.
Useless concept that people keep misusing all the time.
We will definitely get to that at some point in the next few months.
I hate GDP. Got Dang People
i wonder what is the subjective value of the toilet paper @2:31 compared to the value of toilet paper to the horders of toilet paper
The vendor should have charged him $300 since he heard he could get that. Subjective value
That taco vendor should have just taken the $300 for the first taco.
Ha I want that clip at 3:30 as a gif
Im so glad that Seamus can poke a bit of fun at himself.
Poor penguin...
Is the implication here that the green guy eats toilet paper?
2:35
is nobody gonna talk aboot this
Thank you for making this video. So many people tell me that the price of something is how much it must be worth. It's silly.
Is the Penguin OK? It didn't look OK.
I gotta say I've always liked your videos and you're great at putting things into perspective, however I think your view on consumerism has always been to optimistic. I don't think you ever take in account the potential harm in advertisement. Yes in an ideal society the individual decides purchases solely based on what they know they need, but we mostly don't know what that is and but more things than we need and although advertisement is of course important for us to become informed of a product that we may indeed need, it mostly just sublimely tells us "you need to buy this or your life won't be complete". My best example of this is the diamond-industry and how they've pushed diamonds as jewelry. Basically diamonds are completely useless, and in extreme abundance, but since they're monopolized and had a very successful ad campaign like 100 years ago, people have since become convinced they need to buy diamond rings to get engaged, and that the ring has to cost 3 months of salary, and this has nothing to do with what the individual needs.
It's not just the value of the object. Sometimes it's also the value of the gesture. People could easily get plain gold or silver wedding rings, and you may be right that part of the reason they don't is because of rampant advertising. I would argue, however, that the main reason why people buy expensive wedding rings is *because* they're expensive. A wedding ring is seen as a symbol of how much you're willing to invest in the marriage. If you're willing to sacrifice three months of pay for the ring, then your potential spouse knows you're serious about committing to them. You may think we shouldn't have this tradition, but I don't think it's an example of a flaw in our free market.
It's called accountably. You can not make advertisement responsible for ppl dumb purchased. People are responsible for them
0:59 That would explain price negotiations. I still hate it though. To me negotiating a price is like going to The International Bureau of Weights and Measures and telling the staff that their kilogramme weighs 900 grammes
I do hope economy classes are using these videos to teach.
Everything is worth what the buyer is willing to pay for it.
And what the seller is willing to sell it for
The purchasing of toilet paper in the future seems very 2020esque
The penguins in the vending machine at 3 minutes 56 seconds
2:56 (GASP) Is that diminishing marginal utility?! 😍😍😍
BrownGaijin what’s that?
@@colebrockman9579 You didn't see the what was happening after the time stamp?
BrownGaijin so what just someone deciding that afterward it wasn’t worth as much as they thought?
@@colebrockman9579 Close, but definitely on the right track.
It's deciding that it's not worth as much, after already having one. And by the time he's had (beyond) his fill, the value drops to zero.
Kudos to you.
BrownGaijin thanks. I’m going to have economics next semester and I’m trying to get a feel for some of the stuff that I might learn.
Well done!
2:36
They predicted 2020
Are we saying that blue men are more wasteful with their toilet paper and are therefore in more demand for it? How discriminatory!
Watching this during the great Toilet Paper 🧻 Famine of 2020, #Covid-19 quarantine.
Its worth noting that if people value a product less than the work and materials put into it... People stop making it, or at least they do once they realize they're losing money (or unless they value getting the good out there more than their money, which is rare)
However, at the very least, a lot of materials can be recycled, so at least its very rare that materials are so transformed that you cannot at least charge the material cost for an item.
... It is much more often that people value their time and effort more than the supposed value added to the object crafted from said materials.
Made by the Freedom Toons guy?
Seems.
I’m glad the main character is a legend in the future
herewegoagain
Bob is my spirit animal, I too have to be taught many things by others because I am too dumb think things out myself.
What I think Gunner is trying to say is that the vast majority of human learning is people learning from other people. Epiphanies and insights are rarer than you might think, and even if you have regular epiphanies, it's much more efficient to learn from others. Hence the saying, you don't need to reinvent the wheel.
Lol! The background details in these videos! Lol!
I want a gif of dude eating those tacos lol
4:44 is exactly the future I imagine for the world. Two robots who literally have no soul consuming resources for the soul purpose of financial profit. After all, the market exists for us to serve, not the other way around.
You are the market. The market is the aggregation of the exchange choices of individuals.
@@adamsnyder7359 yes this true. It's just a tool, a phenomena. It's not a god and shouldn't be worshiped as a good in and of itself. You can't argue that a future of soulless consumer drones is a dismal future.
Koch brothers big surprise, just use your search engine FEE
Capitalisme is a great tool used by irresponsible consumers.
We have the technology to do great things but we are messing up the planet big time. It's human nature.
Now I am so sad I won't live long enough to hear holo-lectures from this hall.
Why is it when ever I watch this channel, my auto play list and recommended vids on the right are all shows for toddlers?. maybe its suggesting Economics are simple enough for children?. lol
Cartoon = kiddie show despite obvious examples
Well, if it makes economics lessons interesting for my son, I don't really see the issue.
Of course, I'm speaking as a dad, so you may or may not quote me on that.
why was there a toilet paper eating, blue alien?
These videos explaining basic economics are so needed today; in a society where the failure public school SYSTEM does not educate children about something so imperative.
This cartoon is the best ive ever seen
'Everything is worth exactly what the purchaser is willing to pay for it'
- I never remember the names, just their point
If the way peoole see monetary value change everytime how can prices stay so constant in comparison?
It would be cool if you could explain it to me
Because of competition. Consumers are not charged base off how much they value de goods but based off the cheapest price the producer can sell them.
The cheapest price wins. You can not have the same item at different prices in 2 adjacent stores for example. The further the stores are away, the more freedom they have with pricing, but competition will make them align their price to the lowest possible.
If you go in market in some middle East countries, you are charged based how much you want the product. If you show the seller you really want it. He will charge you way more for it.
They're actually not all that consistent. Pretty much every week, retailers and grocers revise prices on the items they sell. Gas prices change every day.
And that's to say nothing about stock prices which are extremely volatile and can change minute to minute, sometimes in enormous swings.
But... I think the spirit of your question is why you can be relatively certain that you can get something like a McDonald's cheeseburger for a few dollars pretty wherever you go (at least in the US).
The answer to that question is that the larger and better established the market for any good or service is, the easier it is for buyers and sellers to stabilize their expectations. Keeping the McDonald's example, they have the benefit of experience from literally billions of customer interactions and over time, their prices have settled around certain levels that are acceptable to the majority of people. What we see is sort of an expression of the average of millions of people's preferences. And since we're all human beings, there are often some broad similarities in what we value that can be generalized.
It's also super inconvenient for any producer that sells a large quantity of anything to negotiate different prices with every prospective customer that walks in the door, so just standardizing prices a little bit is helpful.
But that's all a very simple way to think about it.
Even if the average person thinks a Big Mac is worth about $4, and even if it's inconvenient for McDonald's to negotiate a different price with every customer that comes in the door, individual customers still have very different values that change over time.
Some people are vegetarians and vegans or just hate fast food and wouldn't buy a Big Mac at any price. Other people love a Big Mac and would pay $10 for one if they had to. Even over the course of the day - like Bob in the video - you'd be willing to pay one price if you hadn't eaten all day, and a completely different price if you were already full.
It's easier to see this in action if you look at situations like garage sales where buyers and sellers are haggling over prices directly, but it's still true at the macro level.
Hope this helps.
@@FEEonline Thanks for your long and comprehensive answer. It's clearer in my head now.
I must admit as well, when it comes to fast food, there’s a small amount of value added by the fact that I know the exact, unchanging cost of my regular order and can have exact change ready when I go there. It’s satisfying.
Wait FreedomToons?!
Yes. Excellence knows no bounds apparently.
This ought to be shown in elementary/primary schools!
The primary factor in value is cost to produce. Even if someone were willing to pay $10,000 for a taco, a taco only takes a few dollars to make, so he'll pay a few dollars. Now, with monopolies and tariffs, you can be forced to pay $10,000 for medicine worth only $50. Medical companies have pulled exactly that stunt, with life-saving medicine.
No, cost to produce just provides the floor for price -- no one can sell at loss at least in the long run.
Theoretically sellers would be in competition and the one who asks for least profit above cost is the one who gets the deal, and that's how free market capitalism keeps prices down.
When it doesn't work, it's usually due the market not really being free: regulation, monopolies etc.
Just because you spent 10 years making something doesn't automatically make it worth anything -- it's only worth something if someone is willing to pay for it. Just ask any starving artist.
Yes, this can and frequently does mean some things are not worth doing: Their cost to produce is higher than anyone is willing to pay for them. Sometimes you only find that out the hard way.
Van Ivanov
Just because you're willing to pay $10,000 for a taco doesn't mean it wouldn't be nice to get it for $3. This is called haggling; you start at the amount you think you might be able to get away with and concede ground when necessary. No one in their right mind would offer $10,000 up front for a taco, but they might get up there eventually if they're really bad at haggling. Even though prices in most US stores are set and non-negotiable, you're still basically haggling every time you buy an item for less than your price ceiling.
One interesting question is: is life-preserving medication worth all your money?
Otherwise you die, so that might seem to be the case.
But it's still not universally true. I might choose to value leaving an inheritance to my children more. After all, we all die eventually anyway.
And there's lots of stuff I could be doing to extend my lifespan (exercise, eat healthy etc.) that I choose not to do. Living as long as possible at any cost is not what most people actually choose.
Gold! Gold is an excellent example of subjective value. It is too soft for use in weapons or tools, melts a little too low to really be effective in cookware (and because it is so soft it would not be very durable) so despite good thermal conductivity won't work for that. It is heavy, but not quite as heavy for a given volume as some other materials. Other than in electrical connections, gold has very little practical usefulness. Yet it is shiny and rare so wars have been fought over the stuff!
Steal has lots of uses. But, is so readily available that other than in industrial quantities it has very little material value. Then there is copper......
is bob technically an Eski-bob and not an Eski-mo
Please tell me there's a Ben Shapiro animatronic in there
I sold a dude once 3 cigarettes for 5€
Charlie gave Bob tokens because she valued him learning subjective value more than she valued the tokens; however, not only would Bob not have traded the tokens in the hopes of him learning economics at this time or atleast from this source, and they showed he was likely willing to pay to not learn econ, but also in receiving the tokens he is showing clear signs that he arguably had to be bribed to care about the subject.
Well I learned about economics now to watch Pepa Pig and Ryan’s DIY box fort thing
Speaking as a father to a three-year-old boy, I don't really mind.
I can fully support this to be true as I've felt that very same way. During college the local store there sold only coke products. I bought the dinks but really wished mountain dew was there. But while drinking the coke products I fell in love with Dr Pepper. So much that when they finally switched to Pepsi products I wished they had Dr Pepper. So much that I brought Dr. Pepper cans to college which lowered my buying from the store.
Great episode!! I think you broke UA-cam's suggested video algorithm though... My sidebar is filled with some really... "interesting" videos which are only related because they are also animated or have a cartoon thumbnail. Peppa Pig? Toy reviews? Nick Jr? And a video called, "My step dad got me pregnant" 😲
So our future is Ferengi Alliance
It's a more realistic result than the Federation, where everybody has access to holodecks and infinite gourmet food from replicators... but nobody is fat and everybody is somehow actively doing something productive (even if only artistically). Gene Roddenberry clearly wanted to show the best humanity could offer if scarcity magically vanished, but he forgot to account for the overwhelming laziness of humanity so perfectly embodied by today's screen-obsessed culture.
That said, may the Profits guide you, Daimon FreeStyle.
@@grantjohnson5785 perhaps, but even they went socialist at the end
That was precisely my point. Star Trek showed the Federation as a more or less ideal socialist utopia - where almost everyone "does the right thing" because everyone "has their basic needs met", and thus everyone can "self-actualize" (a la Maslow's hierarchy). But as I said, he didn't account for human laziness.
The human drives to "be significant" and "be productive" must continually outweigh our desire to "have fun". The Federation (particularly from TNG onward) with its replicators and holodecks offers plenty of fun and artificial significance while requiring little, if any, productivity. Yeah, you'll find a small minority, who like Scotty, get their kicks from reading technical journals and fiddling with engines. You'll find some folks who really love exploring, or combat, or whatever. Starfleet clearly shows the best of that society, but the entire civilian population could frankly just kick back and spend their days doing jack squat of importance.
A soda made in ten years for 15$ will still be sold in the same vending machine as a soda made in a matter of seconds for 15 cents. They’ll both be sold for a dollar. Amount of labor put in makes no difference in how much people are willing to pay for it.
Is her voice the same as Yang from RWBY?
Great Video FEE (foundation for economic education).
Better than Economics Explained, who is a Keynesian
@@Chud_Bud_Supreme Do you play Dungeons and Dragons?
The recommendations make it clear that UA-cam done fucked up and classified this as targeting children.
Yeah but the problem is if one side has a serious imbalance of power over another their subject value crushes you like a bug.
If I HAVE to sell the thing I produce or starve, but you have much less urgency, I might place great subjective value on it due to the labor I put into it, but I might still have no choice but to sell at any price.
That would only happen if I had a monopoly on all industries using stuff you produced. Otherwise other people will be competing for whatever you made. If nobody else if willing to buy it, it means what you made isn't worth your labor and you'd be better off for yourself and the society making something else.
It seems like you kind of glossed over needs, you have talked about how options give power in the perspective of getting needs
But not including the possibility where an option is not given like visiting the ER at an expensive hospital or where an oligopoly exist and they do not go in each other's territory
@Marc T I am a capitalist
ua-cam.com/video/AhLm6g-Lz5Q/v-deo.html
@Marc T I'm glad you'd rather use some buzzword than actually discuss my point, yOu rAcIsT
@Marc T thank you, your response is very informative.
I was also wondering, Would you perhaps describe yourself as an anarcho-capitalist, minarchist or other political view?
Economics and business was something that was never taught in the West in school...now why?!
The man with the TP studied 2020 economics
this go out the window when the government mandates it
If you're talking about a value distortion when there's a gun to your head, then you are correct. If you're talking about government mandated price controls and the like, that is still fiction.
@@billmelater6470 no i am talking about when you can not buy a car, get a job, or a home with out a small plastic card and being finger printed. i am talking about you being charged thousands of dollars in taxes all for not having the right kind of paperwork.
@@nealjustus9500 Ah, got it. That is why they would love a cashless society.
@@billmelater6470 i would love that but that is pure fiction from the communist manifesto. a true utopia would be one were there is no class or government, were everyone keeps what they earned. were skills and talent are rewarded and not trickery and thuggishness
@@nealjustus9500 Well, not so much as far as the manifesto is concerned. I'm not saying there won't be "money" or an exchange medium. The idea behind a cashless society and going to a complete digital medium like credit and debit cards are now means that each and every purchase is made under full view of any government entity or what have you. This would allow total control over market behavior.
It’s really refreshing and nice to see a female narrator or lead character in one of the skits not being unbelievably condescending and rude and vomiting left wing talking points
Can you make a video on the economics of coppa
I would have to do more research, but it's clearly created some weird incentives that are definitely worth talking about.
@@FEEonline I'm honored that you responded to my request / question. I thoroughly enjoy the show and I'm looking forward to you loving your work and making more. I hope it doesn't negatively affect your Channel but I would love to hear more about it from your perspective. Thank you again for the message. Your works are the highlight of my UA-cam experience.
This example for the socialists in the room why capitalists aren't exploiting the workers. The worker values the money more than their time used to earn the money. It is a free exchange.