Talk:Josiah Warren

From Wikipedia, the free encyclopedia

[edit] Clarification of cost principle

Until some source makes it clear that Warren's "cost principle" was intended only to apply within the context of "labor for labor" exchange, then we need to keep the two issues separate. Warren seems to have been thinking more broadly. For example, his criticism of the Rochdale cooperatives is not that they don't work on a labor-exchange basis, but that they charged above cost. In general, we need to be cautious about generalizations. There's going to be a lot of Warren-related material seeing the light of day soon in connection with Crispin Sartwell's Warren anthology. Libertatia 18:12, 2 February 2007 (UTC)

I don't get what you're saying. "Cost" for him isn't referring to a monetary price, but to labor itself. It's from Adam Smith, who held that the true cost of anything is how much labor it took to produce it. The cost of some item may be 1 hour of labor, the cost of another is 2 hours, for example. It's what Smith referred to as "real cost" as opposed to "nominal cost" (monetary price). What Smith was saying is accurate. The "real cost" of anything to you is how much effort it took you to acquire it. The "nominal cost" is how much money you paid for it.Anarcho-capitalism 18:15, 2 February 2007 (UTC)

Reverting without waiting for an explanation is bad form. There are two issues here: 1) the cost principle, and 2) labor for labor exchange. Warren treated them separately in at least some of his writings. That needs to be respected in order to be clear. Libertatia 18:18, 2 February 2007 (UTC)

"Labor for labor" exchange is a more specific principle than any of the LTVs. Don't confuse them. Libertatia 18:19, 2 February 2007 (UTC)

Saying that the just price of a thing is it's labor cost is the normative labor theory of value.Anarcho-capitalism 18:23, 2 February 2007 (UTC)

There is the simple labor theory of value from Smith and Ricardo which said that goods naturally trade at exchange ratios determined by how much labor was exerted to produce them. Then there is Warren's normative version, which says that it is equitable if they do trade in such proportion, and unequitable if they don't.Anarcho-capitalism 18:28, 2 February 2007 (UTC)

I still don't understand your objection to noting that "cost" is referring to labor itself. Would you like me to source it?Anarcho-capitalism 18:31, 2 February 2007 (UTC)

I mispoke slightly. "Labor for labor" exchange is a specific practice, grounded in a LTV. Many, many proponents of LTVs did not believe labor exchange to be necessary to their system. This is basic mutualism: markets and monetary exchange could achieve just prices when freed from government interference. Warren appears to have believed that the "cost principle" was important and applicable to systems, such as the Rochdale coops, which engaged in monetary transactions. Yes. For proponents of LTVs, labor is going to be the basis of value, and "quantity of labor" is going to form some important part of "just price." But an LTV has never committed one to a "cost principle." (The argument of the Rochdale coops makes as much sense as Warren's, probably.) And a "cost principle" does not commit one to labor exchange as a practice. This is really quite simple, and keeping it straight will help us as documents from the various experiments in equitable commerce become available for our use. Libertatia 18:38, 2 February 2007 (UTC)

Warren thought that only equitiable price (not value as in worth, but exchange value) of something is it's labor cost. Do you dispute that? We're talking about Warren, and for him it does commit one to trading items at ratios proportional to their labor costs.Anarcho-capitalism 18:43, 2 February 2007 (UTC)

"A watch has a cost and a value. The COST consists of the amount of labor bestowed on the mineral or natural wealth, in converting it into metal...The value of a well-made watch, depends upon the natural qualities of the metals or minerals employed, upon the natural qualities or principles of its mechanism, upon the uses to which it is applied, and upon the fancy or wants of the purchaser. It would be different with every different watch, with every purchaser, and would change every day in the hands of the same purchaser, and with every different use to which he applied it. Now, among this multitude of values, which one should be selected to set a price upon? or, should the price be made to vary and fluctuate according to these fluctuating values!...? Common sense answers NEITHER, but, that these values, like those of sunshine and air, are of right, the equal property of all; no one having a right to set any price whatever upon them. COST, then, is the only rational ground of price, even in the most complicated transactions; yet, value is made almost entirely the governing principle in almost all the commerce of what is called civilized society!" -A Warren in Equitable CommerceAnarcho-capitalism 18:54, 2 February 2007 (UTC)

"If a priest is required to get a soul out of purgatory, he sets his price according to the value which the relatives set upon his prayers, instead of their cost to the priest. This, again, is cannibalism. The same amount of labor equally disagreeable, with equal wear and tear, performed by his customers, would be a just remuneration." -A Warren in Equitable CommerceAnarcho-capitalism 18:57, 2 February 2007 (UTC)

As quoted in the article, he also thought it would make the economy more efficent to trade on that principle. He didn't seem to be aware that the profit motive is what induces people to lower their own labor costs. Machines are invented to reduce the amount of labor one has to exert in order to increase profits. If you invent such a machines, or some kind of process that is more efficient, you allow yourself to make more money while still charging the same amount of money for the same good. To expect someone to lower his prices because he invented a way to exert less labor, just to be "equitable," is pretty crazy. That is not to say that people do not often lower their prices when they become more efficient, but the reason they're doing that is to undercut the competition and therefore increase profits. "Labor for labor" is just too alien to human nature and that's why "value for value" trade endures.Anarcho-capitalism 19:34, 2 February 2007 (UTC)