Sunday, May 31, 2015

Profit, Labor, Zero-Sum

At first glance, the following scenario seems to involve Profit with no corresponding loss: someone, who already owns the appropriate set of tools, cuts down a tree, and fashions it into a table that sells for $50. However, according to the thesis that Economics is a zero-sum game, corresponding to the $50 gain is the loss of energy in the process of transforming the tree into the table. So, this analysis, to which Smith subscribes, shows that Labor, including what is usually termed 'Service', is more fundamental to an Economic system than is Exchange, i. e. is presupposed by a Propensity to Barter, and, so, that Profit can enter into the system that is built upon such processes subsequently, via an inequitable Exchange. In other words, Smith's advocacy of the Labor-Theory of Value renders any denial that Economics is zero-sum problematic.

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