Quote from: Ix on September 09, 2018, 09:29:22 AM

Quote from: aliashraf on September 09, 2018, 05:06:30 AM

First of all Marginalism doesn't explain anything.

Marginalism posits that the cost to produce an item is roughly what you can sell it for, barring a monopoly.

Yes and it is super ridiculous:
Firstly, it is impossible to put monopoly behind bars. I own a commodity, as long as you don't have it and you are not able to produce/obtain it immediately (with any cost) I have monopolized it somehow and you should pay me a fee for it while we both are competing with other sellers/buyers.

Secondly and most importantly it is not a definition for cost saying that the cost of something is its price without monopoly. It is just burying a concept, eliminating it and denying its characteristics.

Commodities are sold for their price which is determined by the momentary equilibrium of supply and demand. It is not an explanation for neither cost nor price and by no means for monopoly. Bringing in the illusion of holly free market won't help a bit to claim price to be identical with value.

On the opposite side Labour Theory of Value definitively gives a quantitative and scientific understanding of value as the hidden factor that this equilibrium state (price) functionally depends on.
As I have stated in my article, utilitarian theory of value has been artificially boosted by power as an anti-Marx idea, this has been ended in a situation that an un-efficient framework has been used to describe economic phenomenons in a complex non scientific way.

Science is always simple and elegant and adds value to our cognition process. It is not a tricky and fragile botch of irrelevant concepts presented just to speak loudly about concepts that one has no clue about.

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It separates the labor from the price which explains why a bitcoin could cost both $0 and $5k to produce. Distorting the issue, however, is that bitcoin (crypto in general) is unique in that it is akin to a decentralized monopoly.

See? It is not science! What the hell is a decentralized monopoly? To keep a useless and void interpretation we need to make it more complex and void and indistinguishable from ravings of an ignorant cave man.

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The code is the monopolistic owner of a resource and the code delegates how that resource is produced. Because bitcoin is decentralized, the code must introduce inefficiency (difficulty) to combat the duplication of infrastructure (mining rigs) from pulverizing the price to zero. It is therefore apt to say that bitcoin is "paying people to dig holes and then fill them up" because any miners beyond the first one are completely unnecessary in the economic sense. Ideally, if we could somehow ensure that a single miner would function identically to a decentralized group of miners to the consumer, the single miner is the far superior scenario as the duplicate and wasteful infrastructure is avoided and total profit realized is far greater. (Although this may be undesirable if you are a communist.)

Ironically, arguing for the usefulness of mining (economically) is in a way arguing a Keynesian idea (digging holes).

You are amazingly wrong. I'm very glad having you here because it is easy to make an example of you to show how false a pro-utilitarian mind is and why it is not capable of understanding what bitcoin is and why it is based on work, instead of reputation or credit or ....

You are absolutely incapable of understanding the mining process from an economical point of view. Your analogy of bitcoin with a hole digging Keynesian practice proves it and I follow your analogy for convenience:
In bitcoin, miners don't "fill up" the holes that they are digging, like what you claim, occasionally they find a piece of diamond: a cryptographic hash and register it to make the ledger hard to forge. This hash needs work to be produced, hence it is a store of value.

Your conclusion about one single miner being more economical(!) is another example of how inefficient your economical school is. I know you are aware of technical aspects of the subject but obviously your economics can't catch-up: One single miner can't produce a bitcoin with the same utility of current bitcoin.

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The utility of bitcoin is the same as always but its price is not, the cost is changing due to the changes in social situation so the value has changed and price follows the value. The "loosely" adverb you used is true for all commodities and is aligned wit Marx's theory.

The utility of bitcoin is clearly not the same as always. In 2009 I could not buy alpaca socks; in 2011 I could. Therefore in 2011 the utility of bitcoin was higher than in 2009.

The utility of bitcoin is essentially fixed since the beginning untill now. It is and it has always been:

Storing value
Portability.
Divisibility.
Uniformity.
Limited supply.
fungibility
decentralization
security
...

it has never changed substantially. What has changed is the amount of work socially needed to produce it.
The society has improved the efficiency of devices as a decreasing factor but at the same time has escalated participation much more which makes it harder to produce bitcoin, the outcome is that now in the current state of our society we need far more resources to produce bitcoin and it has increased its value.

This value finds its voice in bitcoin price somehow and eventually. Price fluctuations due to socio-psychological factors doesn't change anything and is not a direct indicator of its value.
The value of bitcoin acts as the most important factor that keeps the price bouncing around itself, as long as the utility/usefulness of bitcoin is not compromised/degraded.
And Yes, every commodity should have specific qualities to be treated as a commodity but this is not a quantitative property and is out of the scopes of political economy to ask questions about how and why people like and appreciate some object to procure/consume it.

For a pre-fiat form of money like gold, its utility is fixed just like bitcoin and its value is the amount of labour needed to produce it and is a driving force behind its supply but the goods one could buy using a specific amount of this money is determined by the equilibrium state of the market in terms of supply and demand.

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I think here you are trying to avoid any association with marginal utility so as to make your case, but utility is not the same as marginal utility. If you deny the utility of bitcoin has changed over time, then there is no hope of a productive discussion.

Marginal utility is a made-up approximation of a qualitative phenomenon: how people may feel satisfied if they consume one more unit of a commodity? It is implanted in utilitarian theory of value to turn it to an applied science (prediction of sales) besides its instrumental application in holly war against Communism. How would such an application technique be helpful in a theoretical debate?
Firstly, I don't buy such garbages as a scientific material at all, approximately and psychologically analysing hypothetical behavior of consumers.
Secondly, We need an anchor a stable axis for a scientific theory which is to be applicable in general problems. Saying that the utility of a commodity has changed despite its physical characteristics remaining unchanged because its price has increased and hence its demand and hence people feel more comfortable buying it, hence ... it is nothing more than faking knowledge in the darkest corners of ignorance.