Economic notes

Economic notes
So this is funny. Many capitalists assume, "if we can show LTV is bad, we can show socialism is bad!"
They then go on to dunk on LTV, instead promoting STV, without realizing that ...
The Subjective Theory of Value Supports Socialism.
"What?"
Let's look at your summary of STV - a summary I'd agree with!
... the value of a good or service is determined by its utility to the singular individual consumer ...
Why does this support socialism? Well, let's look at the "good" of labor, and walk through the process:
1. The "consumer" of labor is the employer
2. The "utility" of labor, is the amount of increased revenue that labor generates - that is, the
positive impact that labor has on the bottom line
3. The profit of the employer, is that "utility" from (2) minus the cost of labor (wages)
4. If this profit is negative (or often, merely not positive enough for a greedy employer's liking), the
employee is fired.
5. So it's safe to assume that profit is positive; that is, the value of the labor is greater than
the wage of the labor.
By their own Subjective Theory of Value, capitalism underpays every single worker. This underpayment
is felt most severely in so-called "unskilled" jobs, where employers are able to get away with severe
underpayment because so many workers are forced to compete with each other. We need delivery
drivers and janitors for society to function, but capitalism dooms whatever poor schmucks are stuck in
such jobs to poverty and misery.
One last thing on the subject of value, because capitalists miss the point by arguing against LTV in the
first place.
You can define the term "value" to be whatever you want. Honestly, I like the definition proposed by OP
of the utility to the consumer. The real insight added by LTV is stating where value comes from. That is,
while you can calculate value by finding out the utility things generate, the only reason any things
generates any utility at all, is because people put labor into those things.
"But u/bcnoexceptions, not every utility-generating thing has labor input! People enjoy a beautiful
sunset without anyone working for it!" That's true, but I would consider anyone trying to sell the sunset
to be a charlatan. Trying to sell things you didn't work for is the basis of capitalism, but - as we've seen
throughout the world - that's a terrible basis for society.
Let’s look at the flip side.
1. The consumer of a good is the customer.

2. The benefit the customer receives from the good is the value/utility added from consumption minus
the price of the good.
3. If the benefit is negative (or often, merely not positive enough for the greedy customers liking) they
refuse to shop at that store.
4. So it’s safe to assume that benefit is positive. That the value of the good is worth more than the
price paid for it.
By your own reasoning, capitalism underpays every producer. This underpayment is felt most severely in the
production of cheap homogenous goods. Where customers are able to get away with sever underpayment
because producers have to rigorously compete producing virtually identical products.
I’m afraid you have it backwards. A commodity only has an exchange value if it has a use value (utility). No
amount of labour put into something that has no utility will create value. Given that utility creates value, and
different things have differing utilities for different people, utility is the fundamental basis for value creation.
Socialist love to say that without labour nothing of value would exist! But I can just as easily say the same
thing for another factor of production: land (which includes the resources that come along with it). Without
which, labour would have no purpose, and indeed cease to exist altogether!
I am unsure as to your point is in the last paragraph. Why does something having value necessarily require it
to be sold? Moreover, just cause something has value to you doesn’t mean it does for someone else, so the
fact that nobody is willing to buy your sunset doesn’t mean that it lacks value. Would you buy the air you
breathe if I tried to sell it to you? Surely you see the value in air.
https://mises.org/mis.../marginal-utility-not-rocket-science
Here’s an interesting read on STV:
https://mises.org/mise.../objective-science-subjective-value
A boost to economic growth is another potential advantage of increasing the minimum wage,
as consumer spending typically increases along with wages. A higher minimum wage would put
more discretionary dollars in the pockets of millions of workers; money that would then flow to
retailers and other businesses.
How Does Minimum Wage Affect the Economy?

The impact of minimum wage on the economy is a complex issue. Supporters argue that
increasing minimum wage can stimulate consumer spending and boost the overall economy by
putting more money in the hands of low-wage workers. Critics, on the other hand, warn that
higher labor costs might lead to job cuts, automation, and increased prices for goods and
services.
Is Minimum Wage the Same for All Workers?

No, minimum wage laws often take into account different categories of workers. For example,
there might be different minimum wage rates for adult workers, minors, or workers in specific
industries. Tipped employees, like servers in restaurants, may also have a lower minimum
wage due to the expectation of receiving tips.11
U.S. Department of Labor. "Questions and Answers About the Minimum Wage ."
Does Inflation Impact Minimum Wage?

Yes, inflation can erode the purchasing power of minimum wage over time. To address this,
some governments index minimum wage to inflation rates. This means that the minimum wage
is adjusted periodically to ensure that its real value remains relatively constant.
How Does Minimum Wage Affect Small Businesses?

The impact of minimum wage increases on small businesses can vary. Some small businesses
might struggle to absorb the additional labor costs, potentially leading to layoffs or reduced
hours. Others might adapt by increasing prices or finding operational efficiencies to mitigate the
impact.
Do All Countries Have Minimum Wage Laws?

While minimum wage laws are prevalent in many countries, not all nations have implemented
such legislation. The presence and level of minimum wage often depend on a country's
economic structure, labor policies, and social priorities.12
The Bottom Line

Raising the federal minimum wage to $15 an hour is a policy goal for many lawmakers.
Increasing the minimum wage is expected to lift individuals out of poverty and improve work
ethic, however, it also comes with many possible negative implications, such as inflation and a
loss of jobs.
Raising the minimum wage could lead to small-business closure,

reduced hours and increased unemployment. People may not
realize that when you raise someone’s salary, it’s not only the
salary that increases, the employer’s taxes also increase. This
impacts companies’ decisions surrounding how many people to
hire and can adversely affect the worker you’re trying to protect.
While I am not a tax expert or an economist, I believe a better
option would be to cut taxes on the lowest earners. This would
support both workers and businesses.
Instead of mandating that businesses pay employees a minimum wage of $15 per
hour — with, in New York for example, roughly 20% of their paychecks going to
taxes and leaving them with about $12 per hour — the government could cut
employees’ taxes. A minimum-wage worker in America currently makes around
$15,000 per year if they work full time and pays $300 in federal income tax on
$3,000 of their earnings.
When it comes to minimum-wage workers, offering workers themselves tax cuts

rather than businesses could put more money in their pockets without the
disruption to current business models that could result in reduced hires.
Increasing take-home pay is also good for business overall, because it can lead
to greater employee satisfaction and lower turnover. If you draw a line in the sand
and say anyone who makes $X will be tax exempt, it essentially would give those
workers a pay increase while not affecting businesses’ cost structures. It’s a win-
win situation.

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Economic notes

The Subjective Theory of Value Supports Socialism.

Let's look at your summary of STV - a summary I'd agree with!

1. The "consumer" of labor is the employer

1. The consumer of a good is the customer.

Here’s an interesting read on STV:

How Does Minimum Wage Affect the Economy?

Is Minimum Wage the Same for All Workers?

Does Inflation Impact Minimum Wage?

How Does Minimum Wage Affect Small Businesses?

Do All Countries Have Minimum Wage Laws?

The Bottom Line

Raising the minimum wage could lead to small-business closure,

When it comes to minimum-wage workers, offering workers themselves tax cuts

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