Meta Econ Takeover Day 8 \ stacker news ~meta

319 sats \ 6 comments \ @Undisciplined 24 Oct 2023 meta

Following on yesterday's theme of Subjective Value Theory, here's an example that should hit close to home for a lot of the Stackers out there.

What is Software Quality? An Austrian Approach By Federico Silva "Even something that seems as objective as software development falls under the Austrian view of subjective utility."

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156 sats \ 5 replies \ @grayruby 25 Oct 2023

Sure. It is ultimately the market's interpretation of quality that determines the value of a product.

What is interesting to think about is how the market perceives quality. It can measure quality in a number of ways. Typically quality would be assessed as something made well, works well, does what it is supposed to, lasts long. This is off on a tangent from the the application of quality to software, but think about all the crap people buy from dollar and discount stores. These items are not quality by the standard definition but the market still values them for some attributes (inexpensive, convenient, novelty) does that not make them quality products in some way if the market desires them even though most perceive them as cheap junk?

20 sats \ 4 replies \ @Undisciplined OP 25 Oct 2023

The standard argument against them being "quality" products is that they have such low prices. Price is generally considered the best readily available metric for quality.

The production processes that create those cheap products might be high-quality without the products themselves being high-quality.

156 sats \ 3 replies \ @grayruby 25 Oct 2023

So they can have a desirable quality such as low price without being quality but if quality is subjective and affordability is the most important quality a product can have to a subset of the billions of individual actors in a market, are those products quality products to those actors?

Fun

156 sats \ 1 reply \ @grayruby 25 Oct 2023

I have a post idea for you at some point. A thought experiment I have considered for some years now. Some years ago when the progressive left started to rise in popularity and media coverage, one of their primary talking points was around income inequality, wealth inequality and the fact that Billionaires should not exist. Around this time, in a CNBC interview with (I believe it was) Jeffrey Gundlach, he was talking about fed policy and inflation/deflation/printing money and said something along the lines if the Fed wants inflation they should just give everyone one million dollars and there will be a lineup at the Lambo dealership tomorrow. Something to that effect. Quite honestly I don't recall the entire context of the conversation or what he exactly said.

But I started thinking about this idea as the progressive left and MMT got more attention and I came to the conclusion they would never be satisfied with one million per person because they would still need to crush the evil billionaires who still have way more but what if they went really crazy and said "one billion dollars per person. now everyone is a billionaire". Now any sane person is going to understand that prices will hyperinflate almost instantly and the dollar will be worthless etc but what I am interested in is the how it plays out, the second and third order effects, The crazy, creative scenarios people can think up.

So the idea was a post essentially along the lines of. "the year is 2040. The progressive democrat party has been in office for 8 years under President AOC and despite multiple efforts during her term to legislate away billionaires, wealth inequality is worse than ever. In a last ditch effort to cement her legacy, a loophole was found in the 2035 "end all billionaires" bill, that gives her executive authority to make everyone a billionaire if billionaires have not been eradicated by 2040. The week before the 2040 election she signs into law "executive order- 12345" which gives the Federal Reserve the authority and directive to create 350 Quadirillion USFedcoins and at 1201am est the morning of the 2040 election to deposit 1B USFedcoins in each citizens FedNow wallet. What happens next?

*hope I got the math correct on 350M people x 1B.

20 sats \ 0 replies \ @Undisciplined OP 25 Oct 2023

I love it. Cross posting now.

50 sats \ 0 replies \ @Undisciplined OP 25 Oct 2023

It's really tricky to disentangle, because prices reflect both the ease of production and value to consumers. However, we do differentiate between "Demand" and "Quantity Demanded".

"Demand" is the set of quantities that would be purchased at each price: aka the Demand Curve. Whereas, "Quantity Demanded" is the amount that will be purchased at the equilibrium price.

A quality good would have high "Demand" compared to it's substitutes, regardless of what the "Quantity Demanded" ends up being.

Essentially, what "quality" means in a subjective value framework, is that people are willing to pay more for it.