Friday, January 23, 2009

Quick Note on Money as Value

The marginal value of a dollar is smaller for a rich person than a poor person. The fact that rich people will pay more for a good than a poor person is a problem for using money as a measure of things people really value, but socially it is an excellent thing. It is essentially a low-resistance pathway for poor people to extract dollars from rich people.

People making a low wage producing luxury goods they cannot themselves afford is, contra Marx, a social good, in fact nearly a necessity for upward mobility. Simply put, the poor can produce things by inputting their 'true' value, and then selling these things to the rich for an inflated value produced by the rich discounting dollars.

In the end it's another way wealth violates conservation. The dollars the rich part with are, just by virtue of ownership, worth more once the poor have them.

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