Quote from: mybitcoincharts on February 26, 2015, 08:52:35 AM

Quote from: billyjoeallen on February 26, 2015, 06:02:05 AM

Quote from: JorgeStolfi on February 26, 2015, 05:27:23 AM

And if the crypto fails, there will be no one to exchange it for euros at a fixed rate. Again trillions will have changed hands, with no relation to work done.

This is tacit admission that the good professor is using the thoroughly discredited Marxist Labor Theory of Value. The LTOV has been obsolete for more than a century when several economists (including William Stanley Jevons) independently came up with what is known today as Marginal Utility.

Marginal Utility is used by all non marxist economists today, not just Austrians. Keynesians, Monetarists, neoclassical economist all accept it as a better metric. It's like Newton's laws of motion. It's foundational.
If you talk economics and don't understand it, any real economist will know that you are talking out your ass.

http://en.wikipedia.org/wiki/Marginal_utility

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a dismal science. But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

― Murray N. Rothbard

Marginal Utility as a concept cannot discredit LTV for the simple reason that both try to explain similar but not identical phenomena. The subject of LTOV is the economy as a whole, whereas marginalists and neoclassical theories describe only markets, a subset of the economy. Marginal Utility fails to describe reality where markets end. That humans reproduce, for example, is an essential variable in an economy, yet it happens outside of markets. Raising kids at home means work has to be done, and in the future potentially results in productive participants of the economy. LTV try to integrate that into the theory, whereas price-oriented theories only become aware of that new person the moment he/she enters the market.

Another example: Simple Machines Forum, the software this forum runs on, is open source, it has been written by people in their free time. Marginalism cannot describe why it is useful despite having been created outside the market.

Despite having read quite a bit from both sides, I still have no clear position on what I prefer. What I dislike about marginalists, though, is that they simply factored out the hard, fuzzy parts of the whole economy and settled on describing just markets.

Marginalism can absolutely describe why open source projects are valuable. What it cannot do and neither can LToV is put an objective vale on such things because objective value doesn't exist. I see the attraction. It would be easier if it did exist, but then again physics would be simpler w/o relativity too. Unfortunately, neither Newtonian physics nor objective value describe reality as well as a more advanced understanding of the fields of study. People are not interchangable. The same person isn't even interchangeable with himself at a different time and place.