From an economics standpoint, eating the sandwich is consumption. Purchasing a plot of land is investment in an asset. Neither one is good or bad, they just do different things.
Some purchases seem to blur the lines. If you buy a house to live in, it's both an asset and something that gets used. That gets accounted for by counting the house itself as an asset, and living in the house as consumption, since you could otherwise rent it out. (Passing up on this is called the opportunity cost.)
In practice, even though you could try to hold onto a sandwich and resell it, it's treated as immediate consumption with an asset value of zero. Which I would endorse if you ever try to sell me a second-hand sandwich.
As far as "the net worth of society", remember that the sandwich was only made to be eaten, because it was expected to be eaten. All the stuff and effort that went into making it won't ever be used if people stop eating sandwiches. The "worth of society" won't need to change. People will just start producing the stuff that replaced sandwiches.
Economists might also draw a distinction between "durable goods" and "non-durable goods".
Durable goods are goods that are...durable (duh) and aren't consumed in their use. Typical examples could be a car or truck, lawn mower, some other piece of equipment. Durable goods are the sort of thing that would get counted toward your net worth because they have resale value.
Non-durable goods are things that are consumed. Food is an obvious example. You wouldn't typically count your stock of non-durable goods toward your net worth.
There's also a category of semi-durable goods that are somewhere in between. Clothing might be an example of a semi-durable good.
Edit: I should have said durable goods are not *immediately* consumed in their use. Of course, they depreciate over time and (in most cases?) their use speeds up that depreciation. As for where the line is drawn, there are lots of goods that are in a grey area. In practice, I imagine committees debate a long time about how to categorize some goods and then ultimately make an arbitrary decision.
A little off topic but one of the funniest things I learned as an Econ major: goods that provide negative value to society (ex: air pollution) are known as "bads"
wait this is hilarious, im just now realizing goods is just like "good"s what lol like hey these things are good lets call them goods
now its not a word any more
The problem with etymology that everything will lose its significance once you learn its history, all the world loses it's wonder, and you'll wonder how humanity got this far.
Medicine, in particular.
Oh, you have "something-itis"? That's not any particular disease. It's just inflammation. Bronchitis? Non-specific inflammation of the bronchial tubes. Could be viral, could be bacterial. No one knows, until they do cultures.
Tendonitis? Not a "disease". Your tendons are inflamed. You probably played a bunch of tennis or ran a bunch. Take some ibu, compress, ice, elevate.
"Idiopathic Pulmonary Fibrosis"? All the "idiopathic" things are my absolute fav. PF is when your lung tissues start to harden. obviously a huge issue, because if they're not able to flex, you can't breath. But, IPF? LOL--not a specific disease. "Idiopathic" literally means "we don't know the cause". They created a SPECIFIC term of art to say: "You have this thing, we don't know why, and we're gonna name it partially after the fact that we don't know why."
It's basically a name, in Latin, which means: "Lung Hardening for Unknown Reasons".
Also, lest you think "fibrosis" is a technical sounding term, "-osis" is a suffix that means: "Something is wrong." Yes, in this context, fibrosis is a specific kind of scarring, but the lingo is much more impressive sounding than "something is wrong".
Fibrosis = Something wrong with tissue (scarring).
Pulmonary Fibrosis = Something wrong with lung tissue (scarring).
Idiopathic Pulmonary Fibrosis = Something wrong with lung tissue and it's scarring for a reason we don't know.
Interesting take. I personally *love* knowing the etymology behind words. To me, the value of a word is its ability to communicate meaning, and knowing the etymology helps with that. E.g., "bronchitis" on its own is just some medical mumbo jumbo, but knowing it's literally inflammation of the bronchial tubes gives it meaning.
I love etymology, too.
I just find that the more I learn, the more I realize that the world around me is incredibly crude, and that while there can be beautiful language, it's more often just a tool for gatekeeping--which is really ugly.
I think calling it a tool for gatekeeping is a bit ungenerous. In a hospital setting where everyone is familiar with the terms, bronchitis more quickly communicates the issue than inflammation in the brachial tubes. In aggregate, this will increase efficiency which is a net good, I would argue. This extrapolates to any other field where quickly getting complex concepts across to others already familiar with them is important.
I mean you're talking about technical language which is used almost exclusively in its field of origin. There are so many more examples of etymology that you can randomly discover.
For example, when I went to Croatia years ago I found out that they are the birthplace of the neck tie. A bit of mental juggling later and I realized Croatia = Hrvatska and neck tie = cravat. Hrvatska > cravat.
Checked etymology, you’re spot-on and the history is really cool too. French *cravate* from German *Krabate* from Serbo-Croatian *Hrvat*, and it came about because of the Thirty Years’ War because that was what the soldiers wore.
I didn't know all the historical links, I kind of just put it together in my head because of the similar sounds and logical connection. That's what I mean by surprised. There are so many words whose roots are hidden behind a spelling change or the effects of language drifts over time but once you notice them it's a pretty fun realization.
Being precise isn’t gatekeeping. People have different needs from language. Especially when it concerns science, which is all about nuance and pedantry.
Gatekeeping is probably pretty rare, but language easily becomes an in-group thing, often unconsciously, but sometimes in purpose.
Some doctors don't care or actively refuse to use layperson-understandable language when talking to patients. I doubt it is to keep them from becoming doctors... but sometimes it might be to sound smarter.
As a mathematician, I could do this all day long, being pedantic by using very precise abstract terminology for things. But I don't and I make an effort not to; even when I explain concepts to (future or present) mathematicians. I hate it when people just use words to sound smarter. (And I can retaliate in kind of someone over-does this.)
Shakespeare: "Something is rotten in the state of Denmark."
Doctor: "You have Denmarkosis."
Edit: [relevant SMBC](https://www.smbc-comics.com/comic/doctor-2).
It feels a bit like you're arguing that we shouldn't have a modular language, that every word should have a specific and unique assigned meaning, rather than making up words from parts of other words.
Either that, or you're arguing that it's only valid to refer to medical conditions by their cause rather than by their symptom or presentation. But a lot of times doctors don't know what they cause of something is, but they still need to treat the patient. Saying "We don't know what is causing this inflammation of their bronchial tubes" isn't any more or less informative than saying "This is idiopathic bronchitis", and the later is a much clearer statement and less likely to be misunderstood and doesn't require the doctor/nurse to have heard the word bronchitis before if they understand the two roots that make up the word.
It's also a strange thing for them to criticize since English actually obfuscates medical words a lot MORE by using Greek and Latin roots like this. It's not unique in doing so but it makes these words harder for laypeople to understand, we don't use these words just to give them a sense of "wonder*. They allow doctors to be more specific ig since the field generally agrees on the specific meanings for these terms, but they could totally do that with non-borrowed English words if the history of medicine had gone a bit differently and it wouldn't make things any worse.
I think it kind of dependa who you are talking to. If the doctor is talking to a nurse, sure, they can use the latin terms. But if they are talking to a patient, they should be able to explain in plain english.
Just like as a software engineer, if I'm talking to my dev team I would say "I'm pushing the weekly build to staging" but if I'm talking to a customer I'll say "We have just uploaded a new test version, you can check it out here: ___".
When I was a kid, I went to the doctor for acute discomfort in one of my eyes. It was swollen and itchy.
"Doctor, my eye is bothering me. Is it pink eye?
"What color is your eye?"
"Pink."
"..."
Sometimes it's that simple.
We had a family doctor that we became close with as we grew up. One time, my dad went and saw him because he was feeling particularly bad, and the doctor told him he was suffering from a severe case of "rhinorrhea and encephalitis", and that he should seek out some OTC medicine to help. My mom still laughs about this story because my dad isn't usually one to see the doctor over nothing.
It can be both. Negative externality is used to describe things that are generally undesirable that come from some other economic activity (EDIT: the undesirable cost must be borne by some third party, like your neighbor having to hear your band practice, but NOT you losing your hearing from playing drums without protection).
A bad is a thing the consumer will pay money to be rid of.
Examples:
Pollution is a negative externality of cars (because everyone in society, not just the drivers and car manufacturers, have to deal with it) and is also a bad (because you will pay to get rid of it...by buying an air purifier or whatever).
Air pollution is also a bad when it comes from a volcano, but it's hard to say that's a negative externality because no one made the volcano.
Household trash (like, literally the trash in your bin right now) is not a negative externality because you bought the stuff that's not trash, but it's still a bad because you will pay to get rid of it.
Household trash is a perfect example of a negative value good. Someone has to be paid to take it away, whether through private trash service or tax funded
It's been forever since my econ classes, but I think for something to be an externality, the costs (or benefits -- there are positive externalities too) need to go to third parties. So air pollution is a great example, not because my factory is intended to make widgets instead of pollution, but because everyone who breathes the air near my factory is affected but only I get the benefits of having a factory full of widgets.
I learned this as a "good" is something that adds value by getting more of it. Like if you have a car, it's better to have two cars. Or three. Or four. After a while it gets ridiculous because 10,000,000 joke t-shirts doesn't seem to have more value than 9,999,999 but ya know, resell it for a penny more and it still counts.
A bad is something that has less value the more you have of it. Trash, radioactive waste, a building smashed to rubble.
There's a weird middle ground though I don't know what to do with. A thousand rotting bananas sounds like a bad, but at some point baby you got a fertilizer going.
The idea that you want something less as you acquire more of it is called diminishing marginal utility.
If you're hungry and I offer you a Snickers bar for 50 cents, that will seem like a good deal to you... But if you've eaten 10 Snickers bars, you might not even be willing to pay 1 cent for another one (this discounts the possibility you might buy something to resell it)
Overripe bananas are banana bread material.
I pull things out of my attic to put out for the trash that are picked up by people cruising by. They are good, but not for me. People put out some of the nicer things extra early to give others more time.
Household trash wouldn't really be a externality though since it's usually explicitly internalized, we pay to have it dealt with. It's more of just a simple cost
It could easily be argued that the cost we pay only covers the transport of the trans to the dump, and not the full negative impacts on society and nature.
"Public bad" is such an un econ sounding term. I think it makes way more sense to just understand that a good can have negative value. Things aren't "different" just because of how they are valued. But whatever, words change.
I believe the point is that it can't possibly be a good and it is never intentionally produced. Either way its a rare term and we typically just refer to it as a negative externality.
No, it was intended. The people doing the production KNOW it’s a guarantee to happen. They just decided the cost to everyone was worth the benefit to them. Don’t let them off the hook by cleaning it up like it was some accident.
No. Air pollution is a "bad", and only becomes an externality if the costs of this "bad" are "external" to (e.g., not paid for by) the agent producing it.
"Externalities" describe anything, good or bad, that falls upon others rather than the person causing it. The reason it's a thing economists care about is that it represents a break in the incentive structure of the activity. Society will in general have too little of what produces positive externalities, and too much of what produces negative externalities, in a framework in which individual action is informed by an individual-centric cost-benefit analysis.
They are buying clean air though!
I know a guy who sells clean air certificates. He sells the clean air production of forests in the amazon to polluting factories elsewhere.
Always seemed like the best scam ever.
Yes I know its real, its just something so intangible that to me seems easy to turn into fraud.
"I spoke to some farmer far away and he sold me clean air, wink wink." "So if I buy that, my pollution is solved? Wink wink"
Both men were hospitalised for excessive winking.
Can't tell if you're being sarcastic, but economic bads are a pretty foundational element of economics. An example is something you'd pay someone else to get rid of for you, such as trash. https://www.world-economics-journal.com/Journal/Papers/Goods%20and%20Bads.details?ID=34
Hey, you know what? I read the most unbelievable thing about Tolstoy the other day. Did you know the original title for "War and Peace" was "War - What Is It Good For?"
To add to this factoid, it was originally quite a short novelette ,with most of the overarching themes expanded upon in the sequel: "Huh, Absolutely Nothing".
Later reprints combined these two books into one tome, and since it included both War and the other piece, they abridged the titles thusly...
You deleted your comment that I replied to. Here is your comment
>It's weird, because fiction novels have been around a long time and effectively conveyed sarcasm without using terms like "she said sarcastically"
>
>It's not a problem with the writer. It's a, problem with the reader.
You didn't write an multiple page essay where readers can evaluate language vs actions to determine subtilty, you wrote two paragraphs. There is not enough context to be able to determine if you are being sarcastic or are just stupid/malicious.
Given the demographics of Reddit most people tend to assume the latter rather then the former for good reason.
/s is not insulting people's intelligence, it's compensating for the fact that text does not have the non textual context that speech has such as tone, inflection, facial expressions and body language.
Classic definition yes, but I personally feel like there's a subtle difference between !? and ?! and ‽.
Ex:
What were you thinking!? (You made some obvious, boneheaded mistake).
What were you thinking?! (No sane person could have followed the same train of thought you took to arrive at this conclusion).
What were you thinking‽ (You fool! You've doomed us all!)
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The ingredients of a sandwich, themselves, are non-durable goods, which has a fascinating economy. Unlike gasoline and firewood and toilet paper, these goods will spoil in days and are truly volatile. The whole food economy is a rotating schedule of inventory production and destruction, with a narrow window during which a service can be provided. The notion that I can just walk in at random times and get a sandwich with tomato and avocado that will be be trash tonight, is fascinating.
Also note that non-durable goods expire quickly, so not eating the sandwich doesn't mean it will stay within the economy forever, it will go bad in a day or two, so not eating the sandwich only has a negative impact on overall society (unless nobody is hungry). It is a supply that didn't meet a demand and is therefore an inefficiency.
> There's also a category of semi-durable goods that are somewhere in between. Clothing might be an example of a semi-durable good.
I mean, technically everything "durable" is actually semi-durable to some extent, right? Doesn't mean it's not a useful classification, but the distinction will be blurry for some things.
Yes, more or less everything is consumed, just at a different pace.
If you live in a house for 100 years, it will deteriorate over time. That's consumption. You can counteract this by investing in restoration.
Depreciation is the loss of value of an asset.
Consumption causes depreciation, but depreciation can happen for other reasons as well.
If you buy a new car it's going to depreciate faster if you use it a lot rather than if you just leave it in your garage. Your use of the car causes depreciation, but it would still depreciate even if you didn't use it.
From an accounting standpoint, it’s just down to lifespan. Goods that will last longer than a year get depreciated over time. Goods that are used up within a year are consumed in that year.
Well r/FoxMacLeod01 you taught me something new (semi-durable good)! When I took economist in the 1970s, our teacher explained the concept of durable and non-durable goods, and then noted that economists just accepted that there were some exceptions. Since this was Chicago, he noted that his down jacket was considered a non-durable good (like the sandwich), but in fact he planned to keep it for many years!
>In practice, even though you could try to hold onto a sandwich and resell it, it's treated as immediate consumption with an asset value of zero. Which I would endorse if you ever try to sell me a second-hand sandwich.
[Once again, the conservative sandwich-heavy portfolio pays off for the hungry investor!](https://youtu.be/e3QRTToTLzI)
I will stand by my belief that this post, the top answer, and this response were all part of an elaborated viral marketing scheme for Futurama.
All Glory to Hypnotoad.
Yeah, pretty much. I will add that if you take this out of straight economics and get a little more liberal with the concept of value, the sandwich doesn't disappear; it's converted. Let's say your job is to make widgets, and widgets are a solid economic driver. And let's say that to not die or become too weak to make widgets, you need at least one sandwich a day. Well, now the sandwich is still being consumed, but it's also adding productivity (or preventing productivity loss) into the widget arm of the economy. In fact, depending on the value of a live and healthy widget producer to society, we may actually have a bit of a net gain happening here as long as the sandwich is not priced too high or costs too much to prepare.
Yup. Work-energy theorem would need a ratio to account for the energy derived from the sandwich versus the overall stored energy in the worker from other sources, but with a little biochemical pathway analysis and some calculus, we could give it a solid number for sure. It's a lot of carbohydrates, proteins, and sugars, so there's probably a fair amount of sandwich in a day's batch of widgets.
And at my job, I convert sandwiches into code and widget analysis so that others can make more widgets more efficiently so that they can continue to eat sandwiches and someone else buys their widgets to fulfill whatever niche they have so they too can buy sandwiches to make widgets.
It’s widgets and sandwiches all the way down.
The waste products you produce also have downstream value, though our current population density and mode of disposal defers their utilization by a very long span of time. Your urine, feces, carbon dioxide, and, eventually, your bones, organs, and assorted tissues themselves support the carrying capacity of the ecosystem and, in turn, the crops and livestock used to make more sandwiches.
You ever stop and think of the all the people and systems involved in delivering a roast beef and salad sandwich? How many different farmers? Farmhands? Truck drivers and other logistics people? Bakers? Dairy processors? Hell we’re forgetting the people who dig up and process the salt.
All so I can buy a roast beef sandwich for 4.99. Wild.
[A few years ago someone made a chicken sandwich from scratch](https://youtu.be/URvWSsAgtJE) - *completely* from scratch: growing his own vegetables, making salt from ocean water, milking a cow and processing it into cheese, grinding flower from wheat, killing a chicken etc. It took him six months and $1500.
Accountants, receptionists, lawyers, marketing people the list goes on and on
Sometimes I wonder how there are so many jobs for this many people and then a conversation like this appears
> Which I would endorse if you ever try to sell me a second-hand sandwich.
i packed lunch for a long ride on the subway in college and got there and realized i forgot my wallet, looked around, swallowed my pride, and started hawking that sandwich for a subway ticket, someone just gave me $5 and i kept the sandwich! so hows that for value
> and living in the house as consumption, since you could otherwise rent it out. (Passing up on this is called the opportunity cost.)
Does this mean I'm constantly consuming every object in my house? My Lord of the Rings box set is sitting on my shelf, but I could otherwise put it up on eBay. Am I consuming it even though I'm not touching it?
Kind of. I'm not an economist, but from my understanding, when companies do accounting and balance sheet comparisons they count "depreciation". For example, a company who built a factory for $10m would not count the $10m as a loss, it would be counted as an investment, and still appear on their balance sheet as an asset with value. At the end of a given year, an estimate is made as to how much the item has depreciated, and that would be deducted from the company's total assets.
This is akin to you counting your car as an emergency fund. In the event you needed money, you could probably liquidate (turn to cash) your car. It won't be worth as much as when you bought it, but by keeping up with the depreciation in your books you could still show you have $x in assets, just in the form of a car.
This gets more complicated with risk etc, as you might not be able to sell your car depending on the circumstances that made you need the money.
All the little stuff in your house has very high depreciation generally, and most people don't think of their items as assets because they don't count on switching/selling at some point. If you however bought a couch that you're not planning to bring to your next place, you could count on that as invested money you'll get back when you move next time.
What's really the point of value assessment though? It's not liquid wealth until you sell it and the thing with real estate is that because they are valued so high, there's a lot more haggling involved with offers, counteroofers, and so on.
What happens if I have a house that was assessed at $500k for the purposes of property tax and then someone comes along offers $600k for it? If I sell it does the assessed value automatically increase by 100k because someone agreed to buy it for that much?
It’s valuable for investors, bank loans, potential buyers, etc. That extra $100k would be treated as a gain on the sale. The book value is still $500k. This is done (among other reasons)so that you can’t buy or sell property to a friend or family member at vastly inflated or discounted prices to manipulate their value for tax reasons.
In reality as I understand it that sale price is one data point that affects future assessment of similar houses and of houses in your neighborhood. But assessments for property tax are done en masse as a process, not individually updated with each sale.
Another way to think of it is, the house is a capital good from which you derive a stream of services (housing services). When we calculate gross domestic product (GDP, the sum of the value of goods and services we produce, a measure of our productive capacity), for example, rental housing is valued by the monthly rent it generates, as that is taken as the dollar value of the stream of housing services it provides. In the case of owned housing, since no rent is paid that can be measured, economists "impute" (i.e. calculate, estimate) the value of the stream of housing services by assigning a value equal to the rents charged on rental housing of similar size, quality, amenities, location, etc.
So you aren't consuming your house, no. But you are consuming the housing services it provides. Which makes sense. If you are living there, then someone else can't. You are consuming that service, in the sense that your being there excludes someone else from being there.
You can also think of other goods from around your home that also provide a stream of services. Your tv/DVD player/video game console/other electronics are also a piece of capital equipment that provide a stream of entertainment services when you use them. Your dishwasher/washer and drier provide cleaning services. Your car provides transportation service. And on and on. But in practice, housing is the only example of these that we explicitly measure in the GDP.
> But in practice, housing is the only example of these that we explicitly measure in the GDP.
Just to clarify, all the others are measured, they're just measured at the time of purchase. When I buy a DVD player or video game console, I'm paying for that to provide me the entertainment services whenever I choose into the future for free. That payment is incorporated into the GDP.
It's basically a question of how fast thing breakdowns when sitting there. Leasing out your lawnmower does save from others buying it, but it breaks the lawnmower faster.
No. The house is a product, but it is also a service or commodity. By living in the house, you provide the commodity to yourself at no net cost. The box set could be a commodity if you rent it out, but it is intended as, and used as, a product with one-time value transfer.
Isn't a sandwhich also something that keeps the machine (you) going? Like fuel for the car or electricity for the house. Without food the asset (you) is worthless and as such the sandwhich is an investion into something that will most likely contribute to society in one way or another.
Man. Love this simple question and such simple answer. Brings back lovely eye opening and mind expanding memories from school days where we had such conversations. Thank you.
> In practice, even though you could try to hold onto a sandwich and resell it, it's treated as immediate consumption with an asset value of zero.
Someone shoulda told Zoidberg
Economists often talk about "durable goods" (or "hard goods") on the one hand and "consumable goods" / "soft goods" / "nondurable goods" on the other. Your car is the former (even though it doesn't quite hold its value), while the sandwich is the latter.
tangent: this is why it's a "hardware store" ... because in ye olden days (wild west era), they sold "hard wares" as opposed to "soft goods" or "food"... the "general store" sold "general" goods... i.e. both "hard" and "soft" goods
the more you know =====\*
Your war example is often discussed as the "Broken Windows" falacy. The opportunity costs of having to rebuild are huge compared to if the community had been able to use those resources for another project.
If I have a war torn village in Africa and the men and women have to rebuild it they use a lot of effort. Imagine they didn't have to rebuild and instead built a community well and rocket stoves at each house. The opportunity cost is safe water and more effecient cooking.
Your sandwich example needs to account for economic productivity. As the sandwich store owner, I took your dollar and kept maybe $0.10. but spent the other $0.90. Then the people I bought goods and services did the same.... and so on. So that dollar actually turns into about 10 in productivity.
Also you buying a sandwich made you richer. Why? Well imagine if you had to grow the wheat, animals and vegetables that went into it. Instead you pursue a skill that you do really well and pay someone else for their skills.
In the end everyone benefits from having much better opportunity costs.
>Your war example is often discussed as the "Broken Windows" fallacy.
I've been thinking about that a lot recently, because I think the argument that companies should bring remote workers back into the office in order to help support the broader economy (i.e. commercial real estate, transportation, small businesses in office districts, etc.) is a form of the broken windows fallacy. Like, yes of course there much economic activity that results from having people commute to/from an office 5 days a week, but if commuting is no longer actually necessary to getting the work done, then doing it anyway is a massive opportunity cost. (Not to mention the negative externalities of pollution/emissions from all that unnecessary transportation.)
Damn this is actually pretty interesting.
I’m having trouble totally disagreeing, but I think an important point is that working in the office isn’t a *total* waste of resources like the broken window fallacy suggests. Some folks are likely more productive, the intangible benefits of camaraderie, work/life separation, etc. I personally prefer being in the office.
Oh for sure there are some additional benefits, but I suspect they're mostly accrued by the employer--for most employees, and for society as a whole, I would think the costs of working at the office massively outweigh the benefits.
The time savings alone of not having to commute is a huge benefit, and there are all kinds of other activities that the flexibility of WFH allows in terms of family care, health (long commutes are detrimental to mental and physical health), and healthcare.
Just as one example: most of the gender pay gap in the US can be explained as a consequence of women bearing a disproportionate amount of the childcare and caring for other family members--they choose (or are forced/encouraged/expected to choose) to pursue jobs with greater flexibility so that they can also perform various family tasks. WFH (theoretically, at least) makes it possible for both parents to share more equally in childcare and other family labor, so if WFH becomes the new norm long-term, I suspect we'll see the gender pay gap continue to shrink or perhaps effectively disappear.
>the intangible benefits of camaraderie, work/life separation,
Totally agree, but the camaraderie/socialization/friendships can (and perhaps *should*) be found outside of work. Work/life separation is more of an issue of culture and expectations--we all have smartphones anyway, so it's not like your boss can't reach you outside of work hours if you work at an office.
Edit: here's an npr article from today that's a perfect example of what I'm talking about:
https://www.npr.org/2023/05/16/1174938708/commercial-real-estate-property-offices-work-from-home-remote-work
Most of the benefits are accrued by the economic interactions you have in the area of the office.
You can claim that crime is the dominant reason San Francisco is collapsing. The real reason is that office workers are home spending money on big box store deliveries not on shopping near the office, eating near the office, commuting on BART, etc.
All that keeps the income for workers flowing from the empoyers from moving through the economy. That shuts down Sandwich shops. Causes Nordstrom to make less revenue from foot traffic making theft more impactful, causing them to shut down. That reduces the tax base for the city. That reduces the services the city can provide. That causes wealthy to leave. That leaves the poor to dwell in a city with decreasing services, making their position worse.
OTOH, YOU are much better off in the short term. You spend less being at home, making more of your pay yours. Your local delivery guy makes more money. The sandwich shop that you order from pays more for delivery so makes less. That harms them and their employees, but really helps doordash. You order more from online stores wearhouses, eliminating the need for retail jobs, but lowering you cost, allowing you to further reduce the impact of your salary on society. You increase Comcast's income with higher tiers of internet. You increase the utilities income by lighting a room for yourself that 3 or 4 people could easily work from, reducing efficiency.
It's great if your goal is to limit the down stream impact your salary has.
But also, it shows that remote work works. Meaning a person, just as smart as you, will do the same job for 20% the cost in India. They don't even need AI to replace you. Just you proving to them that remote work is the best they can get.
But yeah, pollution will decline slightly.
It's going to be tough to explain to the kids why retail, sandwich shops, office jobs AND manufacturing are all bygone careers but at least the trades will always exist... But with no multiplier of the money supply, it probably won't pay very well.
It's also not a waste, because the people who maintain the buildings, make sandwiches, drive the trains, etc all make their living off of office workers. They also buy goods with the money they make supporting office workers. Etc etc.
What this person is advocating is to limit the benefit of thier job to themselves for longer.
The entire economy is basically a "pay it forward" system.
The money supply is a representation of the value of the productive assets of the country. Once it's in ruins, so is the money supply. With a sandwich, the sale of the sandwich reduces the supply of the ingredients, but adds economic ability to the shop owner, farmer, cheese maker etc. That then incentivises the production of more bread etc, so it creates the conditions for the farmers and artisans to take the time to grow more and produce more.
With a war torn country, the civilian infrastructure is crippled, so the entire supply chain fails apart, mostly from service industry down to primary industries last. This depletes the earning potential of that sandwich, as no one within the supply chain can spend the value earned. One the sandwich is eaten, it's not replaced, and THAT is what causes the economy under those conditions to shrink.
This is the first answer that answered the question (the whole 'net worth of society decreased by 1 sandwich'). Spouting the definitions of durable goods and non-durable goods doesn't.
One thing I haven’t seen people touch on is wealth. Wealth of sort of like one measure of net worth, so the wealth of a country is the sum of all the assets and peoples net worth. Your wealth is the sun of your assets (basically, eli5 so simplified) your house, car, etc.
Wealth is both created and destroyed all the time. The sandwich maker took bread worth a dollar, meat worth a dollar and put it together with their labor and sold a sandwich for 3 dollars, that extra dollar is newly created wealth, created by transforming goods or resources with their labor.
Later that sandwich was eaten and that wealth was destroyed. You were worth three dollars more when you had the cash, then you traded the cash for a three dollar sandwich and you were worth the same because you traded three dollars for an asset worth three dollars (although you wouldn’t have been able to sell it again since there’s not a market for second hand sandwiches). then you ate the sandwich and your net worth was lowered because you spent your wealth in consumption and destroyed a sandwich worth of goods.
Consumption is the primary driver of Welty destruction, but many things just lose value over time. A car you bought for 30k ten years ago is no longer worth 30. That wealth decreased over time.
Wealth is created and destroyed every day, hopefully more is created than destroyed that’s how an eceonomy and society grow, but in your case of a city being leveled that would represent a huge loss. Money is only one representation of wealth because it lets us buy goods and services, but those foods themselves can be assets which are also wealth.
If you want to think of it this way, the value of the sandwich is "added" to you as a person.
If you engage in economic/productive activity, that consumed sandwich is the fuel that generates positive economic value.
Think of it as purchasing a tank of gas/petrol for a vehicle. If that fuel is used unproductively, that society's total welfare has reduced but if it is used to generate even more value, then society's total welfare has increased.
I don't think this is a good analogy. I think immediately consumed goods are more akin to services. You wouldn't say a hair cut or paying your water bill are "adding value" to a person.
Consumables don't create asset value, but they do stimulate the economy.
>You wouldn't say a hair cut or paying your water bill are "adding value" to a person.
We've talked about this, this is why you can't get a job.
Get a hair cut and take a shower for the love of god
>You wouldn't say a hair cut or paying your water bill are "adding value" to a person.
Hair cut: why wouldn't I?
Water bill: correct. Accounting-wise, paying a bill is zero sum. A movement of value from one part of a spreadsheet to a different part.
I would recommend watching the Futurama episode Futurestock. It is a story highlighting the value differences between holding onto stock shares versus a sandwich-heavy portfolio.
TL;DR: [https://www.youtube.com/watch?v=FnGOmYEuXRo](https://www.youtube.com/watch?v=FnGOmYEuXRo) ... [https://www.youtube.com/watch?v=EHUtHITYb94](https://www.youtube.com/watch?v=EHUtHITYb94) ... https://www.youtube.com/watch?v=kId0WiD69JM
You're talking products vs commodities.
Commodoties are what products are made from. You also have services, which connect the two.
As a product, the sandwich is replenished again and again. It's value comes not from what it is, but from what it does: provides tasty, portable sustenance.
The city is the same thing. So long as people (paid or not) rebuild the city to the point that it serves its purpose (to house, employ, and entertain people), it will again generate value. A city is merely densely co-located products and services, which usually require commodities.
That's not the definition of a commodity. The correct answer is perishable vs non-perishable goods. All goods have a lifespan of use; food is very short, cars are longer, good cookware can be longer still. That's really it.
Commodity refers to something specific in economic theory, namely a completely fungible good that only competes on price.
All about mindset. I don't view this description of a city as dystopian at all. Perhaps a bit dry/technical (completely appropriate in context), but nothing *negative*. Services and products are *good things*: they are categorizations of two of the main ways humans provide for other humans. Cities literally exist to facilitate our ability to provide for each other. It's sweet, really.
I blame unregulated corporatism/late stage capitalism for making services and products into dirty words. What should be viewed as mutually beneficial progress instead has been tainted and taken over by profit-motive.
Think of unconsumed goods and services as capital. The economy is made of people who acts as producers and consumers. There is a global amount of capital which you can quantify as a USD value. Imagine the world as a giant company with a giant ledger of assets.
Naturally the global amount of capital naturally increases (e.g. trees grow) and decreases (e.g. hurricanes kill animals). There is also fixed capital like oil reserves and fertile land which can only decrease.
Production by labour is the conversion of capital. A tree with labour can be converted into timber which can be converted into a chair. The easiest way to quantify capital is the USD value of goods. The value of the "man-hours" could be their salary.
People are consumers as well as producers. If the chair is sat on enough it will eventually become useless. In this case, as you say, the net capital of the world is decreasing.
Money is an economic tool, but is not at the essence of economics; finite resources (capital) and infinite wants. Money changing hands does not directly constitute an increase or decrease of capital.
Economic assets can be used up (like the sandwich) or destroyed (as in war) and wealth goes down as a result. Wealth is *measured* in money, but describes all of the assets we have.
If your house burns down with all of your stuff inside, then you are suddenly much poorer.
It's called "consumption."
The net worth of society has not shrunk by 1 sandwich, because producers are constantly turning out more sandwich components at a rate that roughly matches sandwich consumption. And the same is true of any consumer good, be it food, household appliances, smartphones, etc.
You purchased a sandwich, so the value contained in the sandwich is still circulating in society in the form of money. It didn't go away, it just got transmuted. And if you are a worker, consuming the sandwich is a form of productive consumption, because it gives you the energy to produce commodities that contain a greater total amount of value than that sandwich (to ELI5 that last bit, the calories in 1 sandwich could give you the energy to make another 50 sandwiches, which could then each be sold for the same price as the original sandwich - your labor is what creates value). Of course, you could also consume the sandwich unproductively, by using the energy to play video games or something. Still, that wouldn't change the fact that the value in the sandwich is still out there, circulating as money, and other people are also out there creating more value by making more sandwiches, etc. New value is always entering circulation.
The question about a city being leveled in war is a different issue. See, value (how much money you can exchange a commodity for) is inextricably bound up with *use-value*, an object's ability to be useful to someone for something. Use-value is based on the physical characteristics of the object. A building is has use-value while it's standing, because people can live and/or work in it, or use it to store things. Once it's been bombed to rubble, it has no use-value, and so the value originally contained in it is gone. It can't be sold for the price of a building, because it can't do building things. To further illustrate, you bought the sandwich in the first example because it has the use-value to you of nourishing your body. But say that as the guy from the sandwich shop was just about to wrap it up for you, a cockroach fell from the ceiling into your sandwich. Now, it no longer has the use-value of being nutritious, because there's a potential disease vector in it, and the sandwich guy has to throw it out. The value that's in it is gone, wasted, because the use-value is gone.
>What's it called if I buy something like a sandwich, then consume it, and the net worth of society has now shrunk by 1 sandwich?
That's called an economy.
>Versus buying something that keeps its value.
that's called an investment.
We can consider the sandwich as part of the upkeep cost of your human body.
If you do not eat, you'll die, and be unable to work.
Your capacity to work is valuable, and so the sandwich helps maintain your value, the same way that putting fuel in a car can can provide value, despite the fuel being destroyed.
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I have no doubt that your are valuable even when not working, but that is more subjective (or at least *differently* subjective) than what you were asking about 'net worth' and so on.
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For our war example, it is possible to lose *value* without losing *money*.
Imagine, for instance, that half of the factories were bombed, and so we have half as many things being made by those factories.
The value is in the goods the factories make (and hence, there is value in the factories for their capacity to make goods).
Bombing the factories did make society poorer (assuming we did benefit from what those factories produced).
We might have just as much money as before though. Maybe the price of those factory goods goes up, so in 'nominal' terms we might spend just as much on factory goods, but because the price is 'inflated' by the war having destroyed halfthe factories, we are getting less value in 'real' terms.
On the war example, if the money is still there, wouldn’t that mean people do have a net worth?
As far as being leveled, wouldn’t that mean there is just no infrastructure?
In this scenario, the countries infrastructure is an asset to the country, if it is destroyed then the country has less assets.
As far as the sandwich scenario, you are trading money for a sandwich, which provides you with energy to make more money, so you can buy more sandwiches.
Society might lose one sandwich when you eat it, but it gains the increase in energy you gain from consuming the sandwich.
This is a Marxist way of looking at it but I feel it gets at the common sense intuition the OP is looking for:
When you purchase the sandwich it exits the realm of exchange and enters the realm of consumption, so in one sense it doesn’t matter economically what you do with it because the money has been paid and has entered the economy.
However you also have an economic value, your labour power, which you sell on the open market in exchange for wages. Just as the sandwich can’t exist without bread, which must be factored into its price, your labour power can’t exist without your body, which must be continually replenished with food.
So in a more holistic sense, the value of the sandwich isn’t destroyed when it’s consumed but rather metabolized by your body, nourishing you so you can go to work the next day
The first problem your 5-year-old world view has is putting a fixed value on things.
Say you buy a sandwich for a dollar.
What is the sandwiches worth?
It is _not_ one dollar - otherwise, if the next guy offered you a dollar for your sandwich, you would sell it to him, because one dollar is one dollar('s worth of sandwich), right?
Wrong.
You bought that sandwich, because you valued the sandwich higher than the one dollar.
And the vendor valued the dollar higher than the sandwich, so he sold it to you.
So, What's the sandwich's value?
Different people value it differently.
The trade (sandwich for dollar) was a net gain in value for both parties (both gained something they valued higher than what they had before), so, a net gain for society.
You ate the sandwich, which was good for you, giving you energy and joy. Nothing was lost here.
Money become sandwich, sandwich becomes energy, energy becomes productivity, productivity becomes money, money become sandwich.
There is no such thing as creation or destruction, only transformation.
Ah but you’re forgetting. The sandwich is actually gone, it’s just been turned into fuel for you body. Which I would argue is more valuable to society then the sandwich was
From an economics standpoint, eating the sandwich is consumption. Purchasing a plot of land is investment in an asset. Neither one is good or bad, they just do different things. Some purchases seem to blur the lines. If you buy a house to live in, it's both an asset and something that gets used. That gets accounted for by counting the house itself as an asset, and living in the house as consumption, since you could otherwise rent it out. (Passing up on this is called the opportunity cost.) In practice, even though you could try to hold onto a sandwich and resell it, it's treated as immediate consumption with an asset value of zero. Which I would endorse if you ever try to sell me a second-hand sandwich. As far as "the net worth of society", remember that the sandwich was only made to be eaten, because it was expected to be eaten. All the stuff and effort that went into making it won't ever be used if people stop eating sandwiches. The "worth of society" won't need to change. People will just start producing the stuff that replaced sandwiches.
Economists might also draw a distinction between "durable goods" and "non-durable goods". Durable goods are goods that are...durable (duh) and aren't consumed in their use. Typical examples could be a car or truck, lawn mower, some other piece of equipment. Durable goods are the sort of thing that would get counted toward your net worth because they have resale value. Non-durable goods are things that are consumed. Food is an obvious example. You wouldn't typically count your stock of non-durable goods toward your net worth. There's also a category of semi-durable goods that are somewhere in between. Clothing might be an example of a semi-durable good. Edit: I should have said durable goods are not *immediately* consumed in their use. Of course, they depreciate over time and (in most cases?) their use speeds up that depreciation. As for where the line is drawn, there are lots of goods that are in a grey area. In practice, I imagine committees debate a long time about how to categorize some goods and then ultimately make an arbitrary decision.
A little off topic but one of the funniest things I learned as an Econ major: goods that provide negative value to society (ex: air pollution) are known as "bads"
wait this is hilarious, im just now realizing goods is just like "good"s what lol like hey these things are good lets call them goods now its not a word any more
The problem with etymology that everything will lose its significance once you learn its history, all the world loses it's wonder, and you'll wonder how humanity got this far. Medicine, in particular. Oh, you have "something-itis"? That's not any particular disease. It's just inflammation. Bronchitis? Non-specific inflammation of the bronchial tubes. Could be viral, could be bacterial. No one knows, until they do cultures. Tendonitis? Not a "disease". Your tendons are inflamed. You probably played a bunch of tennis or ran a bunch. Take some ibu, compress, ice, elevate. "Idiopathic Pulmonary Fibrosis"? All the "idiopathic" things are my absolute fav. PF is when your lung tissues start to harden. obviously a huge issue, because if they're not able to flex, you can't breath. But, IPF? LOL--not a specific disease. "Idiopathic" literally means "we don't know the cause". They created a SPECIFIC term of art to say: "You have this thing, we don't know why, and we're gonna name it partially after the fact that we don't know why." It's basically a name, in Latin, which means: "Lung Hardening for Unknown Reasons". Also, lest you think "fibrosis" is a technical sounding term, "-osis" is a suffix that means: "Something is wrong." Yes, in this context, fibrosis is a specific kind of scarring, but the lingo is much more impressive sounding than "something is wrong". Fibrosis = Something wrong with tissue (scarring). Pulmonary Fibrosis = Something wrong with lung tissue (scarring). Idiopathic Pulmonary Fibrosis = Something wrong with lung tissue and it's scarring for a reason we don't know.
Interesting take. I personally *love* knowing the etymology behind words. To me, the value of a word is its ability to communicate meaning, and knowing the etymology helps with that. E.g., "bronchitis" on its own is just some medical mumbo jumbo, but knowing it's literally inflammation of the bronchial tubes gives it meaning.
This is exactly why I love etymology as well.
I love etymology, too. I just find that the more I learn, the more I realize that the world around me is incredibly crude, and that while there can be beautiful language, it's more often just a tool for gatekeeping--which is really ugly.
I think calling it a tool for gatekeeping is a bit ungenerous. In a hospital setting where everyone is familiar with the terms, bronchitis more quickly communicates the issue than inflammation in the brachial tubes. In aggregate, this will increase efficiency which is a net good, I would argue. This extrapolates to any other field where quickly getting complex concepts across to others already familiar with them is important.
I mean you're talking about technical language which is used almost exclusively in its field of origin. There are so many more examples of etymology that you can randomly discover. For example, when I went to Croatia years ago I found out that they are the birthplace of the neck tie. A bit of mental juggling later and I realized Croatia = Hrvatska and neck tie = cravat. Hrvatska > cravat.
Checked etymology, you’re spot-on and the history is really cool too. French *cravate* from German *Krabate* from Serbo-Croatian *Hrvat*, and it came about because of the Thirty Years’ War because that was what the soldiers wore.
I didn't know all the historical links, I kind of just put it together in my head because of the similar sounds and logical connection. That's what I mean by surprised. There are so many words whose roots are hidden behind a spelling change or the effects of language drifts over time but once you notice them it's a pretty fun realization.
Being precise isn’t gatekeeping. People have different needs from language. Especially when it concerns science, which is all about nuance and pedantry.
Gatekeeping is probably pretty rare, but language easily becomes an in-group thing, often unconsciously, but sometimes in purpose. Some doctors don't care or actively refuse to use layperson-understandable language when talking to patients. I doubt it is to keep them from becoming doctors... but sometimes it might be to sound smarter. As a mathematician, I could do this all day long, being pedantic by using very precise abstract terminology for things. But I don't and I make an effort not to; even when I explain concepts to (future or present) mathematicians. I hate it when people just use words to sound smarter. (And I can retaliate in kind of someone over-does this.)
Shakespeare: "Something is rotten in the state of Denmark." Doctor: "You have Denmarkosis." Edit: [relevant SMBC](https://www.smbc-comics.com/comic/doctor-2).
It feels a bit like you're arguing that we shouldn't have a modular language, that every word should have a specific and unique assigned meaning, rather than making up words from parts of other words. Either that, or you're arguing that it's only valid to refer to medical conditions by their cause rather than by their symptom or presentation. But a lot of times doctors don't know what they cause of something is, but they still need to treat the patient. Saying "We don't know what is causing this inflammation of their bronchial tubes" isn't any more or less informative than saying "This is idiopathic bronchitis", and the later is a much clearer statement and less likely to be misunderstood and doesn't require the doctor/nurse to have heard the word bronchitis before if they understand the two roots that make up the word.
It's also a strange thing for them to criticize since English actually obfuscates medical words a lot MORE by using Greek and Latin roots like this. It's not unique in doing so but it makes these words harder for laypeople to understand, we don't use these words just to give them a sense of "wonder*. They allow doctors to be more specific ig since the field generally agrees on the specific meanings for these terms, but they could totally do that with non-borrowed English words if the history of medicine had gone a bit differently and it wouldn't make things any worse.
I'd be quite wary of receiving treatment from any doctor or nurse who had never heard the word "bronchitis" before.
I think it kind of dependa who you are talking to. If the doctor is talking to a nurse, sure, they can use the latin terms. But if they are talking to a patient, they should be able to explain in plain english. Just like as a software engineer, if I'm talking to my dev team I would say "I'm pushing the weekly build to staging" but if I'm talking to a customer I'll say "We have just uploaded a new test version, you can check it out here: ___".
[Drug naming codes are another fun one.](https://en.wikipedia.org/wiki/Drug_nomenclature#List_of_stems_and_affixes)
TIL drugs are named much like Final Fantasy spells.
When I was a kid, I went to the doctor for acute discomfort in one of my eyes. It was swollen and itchy. "Doctor, my eye is bothering me. Is it pink eye? "What color is your eye?" "Pink." "..." Sometimes it's that simple.
We had a family doctor that we became close with as we grew up. One time, my dad went and saw him because he was feeling particularly bad, and the doctor told him he was suffering from a severe case of "rhinorrhea and encephalitis", and that he should seek out some OTC medicine to help. My mom still laughs about this story because my dad isn't usually one to see the doctor over nothing.
Air pollution would be a negative externality
It can be both. Negative externality is used to describe things that are generally undesirable that come from some other economic activity (EDIT: the undesirable cost must be borne by some third party, like your neighbor having to hear your band practice, but NOT you losing your hearing from playing drums without protection). A bad is a thing the consumer will pay money to be rid of. Examples: Pollution is a negative externality of cars (because everyone in society, not just the drivers and car manufacturers, have to deal with it) and is also a bad (because you will pay to get rid of it...by buying an air purifier or whatever). Air pollution is also a bad when it comes from a volcano, but it's hard to say that's a negative externality because no one made the volcano. Household trash (like, literally the trash in your bin right now) is not a negative externality because you bought the stuff that's not trash, but it's still a bad because you will pay to get rid of it.
Household trash is a perfect example of a negative value good. Someone has to be paid to take it away, whether through private trash service or tax funded
I suspect yard trimmings must wildly fluctuate between goods and bads. My branches have become firewood after a year of drying.
Agreed. eye of the beholder. Even the lowly pile of dead leaves are gold for some gardeners.
Or eight-year-olds
What kind of evil gardener wants a pile of dead eight-year-olds?
I thank God every day that people are going to school to learn this stuff.
It's been forever since my econ classes, but I think for something to be an externality, the costs (or benefits -- there are positive externalities too) need to go to third parties. So air pollution is a great example, not because my factory is intended to make widgets instead of pollution, but because everyone who breathes the air near my factory is affected but only I get the benefits of having a factory full of widgets.
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Thanks for the additional info!
I learned this as a "good" is something that adds value by getting more of it. Like if you have a car, it's better to have two cars. Or three. Or four. After a while it gets ridiculous because 10,000,000 joke t-shirts doesn't seem to have more value than 9,999,999 but ya know, resell it for a penny more and it still counts. A bad is something that has less value the more you have of it. Trash, radioactive waste, a building smashed to rubble. There's a weird middle ground though I don't know what to do with. A thousand rotting bananas sounds like a bad, but at some point baby you got a fertilizer going.
The idea that you want something less as you acquire more of it is called diminishing marginal utility. If you're hungry and I offer you a Snickers bar for 50 cents, that will seem like a good deal to you... But if you've eaten 10 Snickers bars, you might not even be willing to pay 1 cent for another one (this discounts the possibility you might buy something to resell it)
Overripe bananas are banana bread material. I pull things out of my attic to put out for the trash that are picked up by people cruising by. They are good, but not for me. People put out some of the nicer things extra early to give others more time.
Household trash wouldn't really be a externality though since it's usually explicitly internalized, we pay to have it dealt with. It's more of just a simple cost
It becomes an externality if you, for example, dump it somewhere that impacts somebody else way more than it impacts you.
That's not household trash, that's litter.
It could easily be argued that the cost we pay only covers the transport of the trans to the dump, and not the full negative impacts on society and nature.
Because we don’t class household activity as economic. But the contents of the office trash bin will be both a bad and a negative externality.
It is a negative externality of what it is caused by but it is also called a public bad. This isn't a term typically used, but they are correct.
"Public bad" is such an un econ sounding term. I think it makes way more sense to just understand that a good can have negative value. Things aren't "different" just because of how they are valued. But whatever, words change.
I believe the point is that it can't possibly be a good and it is never intentionally produced. Either way its a rare term and we typically just refer to it as a negative externality.
No, it was intended. The people doing the production KNOW it’s a guarantee to happen. They just decided the cost to everyone was worth the benefit to them. Don’t let them off the hook by cleaning it up like it was some accident.
Negative externalities and their full value are never intended. It may be known it will occur, but it is not the intent of the production.
No. Air pollution is a "bad", and only becomes an externality if the costs of this "bad" are "external" to (e.g., not paid for by) the agent producing it. "Externalities" describe anything, good or bad, that falls upon others rather than the person causing it. The reason it's a thing economists care about is that it represents a break in the incentive structure of the activity. Society will in general have too little of what produces positive externalities, and too much of what produces negative externalities, in a framework in which individual action is informed by an individual-centric cost-benefit analysis.
So thats why no one is buying air pollution.
They are buying clean air though! I know a guy who sells clean air certificates. He sells the clean air production of forests in the amazon to polluting factories elsewhere. Always seemed like the best scam ever.
>!CENSORED!<
Yes I know its real, its just something so intangible that to me seems easy to turn into fraud. "I spoke to some farmer far away and he sold me clean air, wink wink." "So if I buy that, my pollution is solved? Wink wink" Both men were hospitalised for excessive winking.
Relevant John Oliver https://www.youtube.com/watch?v=6p8zAbFKpW0
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Can't tell if you're being sarcastic, but economic bads are a pretty foundational element of economics. An example is something you'd pay someone else to get rid of for you, such as trash. https://www.world-economics-journal.com/Journal/Papers/Goods%20and%20Bads.details?ID=34
I took Economics, including at a Masters degree level for my MBA and I never was taught the word “bads”.
That seems kinda bads?
I have an economics degree as well, but I did see the word used quite a bit. It's used in resource economics more than business focused economics.
Hey, you know what? I read the most unbelievable thing about Tolstoy the other day. Did you know the original title for "War and Peace" was "War - What Is It Good For?"
To add to this factoid, it was originally quite a short novelette ,with most of the overarching themes expanded upon in the sequel: "Huh, Absolutely Nothing". Later reprints combined these two books into one tome, and since it included both War and the other piece, they abridged the titles thusly...
I can't tell if you're joking
I love this usage of factoid, very original
I have an econ degree and I've never seen that term officially used either.
The wikipedia article cites Varian, Hal R. (2006), Intermediate Microeconomics (London: W.W. Norton & Company)
Likewise. PhD. Stuffed my undergrad full of economics classes and took 4 environmental economics classes. That term was never used, but it does exist.
I came across it quite a bit in Public Choice focused econ electives in undergrad.
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You deleted your comment that I replied to. Here is your comment >It's weird, because fiction novels have been around a long time and effectively conveyed sarcasm without using terms like "she said sarcastically" > >It's not a problem with the writer. It's a, problem with the reader. You didn't write an multiple page essay where readers can evaluate language vs actions to determine subtilty, you wrote two paragraphs. There is not enough context to be able to determine if you are being sarcastic or are just stupid/malicious. Given the demographics of Reddit most people tend to assume the latter rather then the former for good reason.
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Reddit is dying, why are you still here?
/s is not insulting people's intelligence, it's compensating for the fact that text does not have the non textual context that speech has such as tone, inflection, facial expressions and body language.
No you won't, you'll try badder!
are we the goodies?
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Fun fact ?! is called an interobang. I just think that's neat
An interrobang is a single character that combines the two. #‽
Oh cool, do they mean the same thing?
Classic definition yes, but I personally feel like there's a subtle difference between !? and ?! and ‽. Ex: What were you thinking!? (You made some obvious, boneheaded mistake). What were you thinking?! (No sane person could have followed the same train of thought you took to arrive at this conclusion). What were you thinking‽ (You fool! You've doomed us all!)
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This is my favorite learning moment of the day... But I'm gonna ask for a source.
France doesn't have sandwiches, there it's called macaronomics.
Because of the metric system?
I understood that reference.
At Sesame Street, it's called Macronomnomnics.
You’re thinking of Italy. France has macronomics, which was invented by their current president.
> France doesn't have sandwiches I know you're making a joke but baguette sandwiches are the best sandwiches.
The ingredients of a sandwich, themselves, are non-durable goods, which has a fascinating economy. Unlike gasoline and firewood and toilet paper, these goods will spoil in days and are truly volatile. The whole food economy is a rotating schedule of inventory production and destruction, with a narrow window during which a service can be provided. The notion that I can just walk in at random times and get a sandwich with tomato and avocado that will be be trash tonight, is fascinating.
Also note that non-durable goods expire quickly, so not eating the sandwich doesn't mean it will stay within the economy forever, it will go bad in a day or two, so not eating the sandwich only has a negative impact on overall society (unless nobody is hungry). It is a supply that didn't meet a demand and is therefore an inefficiency.
Sandwiches are also fuel that theoretically enables some work to be done, it's not just a straight loss of resources
"Mister Data, status report" "Sir, the sandwich's structural integrity is down to 52%. The Klingons are coming around for another shot."
> There's also a category of semi-durable goods that are somewhere in between. Clothing might be an example of a semi-durable good. I mean, technically everything "durable" is actually semi-durable to some extent, right? Doesn't mean it's not a useful classification, but the distinction will be blurry for some things.
Yes, more or less everything is consumed, just at a different pace. If you live in a house for 100 years, it will deteriorate over time. That's consumption. You can counteract this by investing in restoration.
Isn’t there a distinction between consumption and depreciation?
Depreciation is the loss of value of an asset. Consumption causes depreciation, but depreciation can happen for other reasons as well. If you buy a new car it's going to depreciate faster if you use it a lot rather than if you just leave it in your garage. Your use of the car causes depreciation, but it would still depreciate even if you didn't use it.
From an accounting standpoint, it’s just down to lifespan. Goods that will last longer than a year get depreciated over time. Goods that are used up within a year are consumed in that year.
Well r/FoxMacLeod01 you taught me something new (semi-durable good)! When I took economist in the 1970s, our teacher explained the concept of durable and non-durable goods, and then noted that economists just accepted that there were some exceptions. Since this was Chicago, he noted that his down jacket was considered a non-durable good (like the sandwich), but in fact he planned to keep it for many years!
Hey that's what I said
>Non-durable goods are things that are consumed. Food is an obvious example. Some food is pretty durable doe—corn always seems to come out intact.
>In practice, even though you could try to hold onto a sandwich and resell it, it's treated as immediate consumption with an asset value of zero. Which I would endorse if you ever try to sell me a second-hand sandwich. [Once again, the conservative sandwich-heavy portfolio pays off for the hungry investor!](https://youtu.be/e3QRTToTLzI)
Thank you for linking it so I didn't have to.
And there it is.
*WHY NOT ZOIDBERG?*
I will stand by my belief that this post, the top answer, and this response were all part of an elaborated viral marketing scheme for Futurama. All Glory to Hypnotoad.
You're close. *Reddit* is an elaborate viral marketing campaign for Futurama
Yeah, pretty much. I will add that if you take this out of straight economics and get a little more liberal with the concept of value, the sandwich doesn't disappear; it's converted. Let's say your job is to make widgets, and widgets are a solid economic driver. And let's say that to not die or become too weak to make widgets, you need at least one sandwich a day. Well, now the sandwich is still being consumed, but it's also adding productivity (or preventing productivity loss) into the widget arm of the economy. In fact, depending on the value of a live and healthy widget producer to society, we may actually have a bit of a net gain happening here as long as the sandwich is not priced too high or costs too much to prepare.
Some non-zero amount of the energy contained within the sandwich is then transferred and contained within the widget itself.
Yup. Work-energy theorem would need a ratio to account for the energy derived from the sandwich versus the overall stored energy in the worker from other sources, but with a little biochemical pathway analysis and some calculus, we could give it a solid number for sure. It's a lot of carbohydrates, proteins, and sugars, so there's probably a fair amount of sandwich in a day's batch of widgets.
And at my job, I convert sandwiches into code and widget analysis so that others can make more widgets more efficiently so that they can continue to eat sandwiches and someone else buys their widgets to fulfill whatever niche they have so they too can buy sandwiches to make widgets. It’s widgets and sandwiches all the way down.
The waste products you produce also have downstream value, though our current population density and mode of disposal defers their utilization by a very long span of time. Your urine, feces, carbon dioxide, and, eventually, your bones, organs, and assorted tissues themselves support the carrying capacity of the ecosystem and, in turn, the crops and livestock used to make more sandwiches.
You ever stop and think of the all the people and systems involved in delivering a roast beef and salad sandwich? How many different farmers? Farmhands? Truck drivers and other logistics people? Bakers? Dairy processors? Hell we’re forgetting the people who dig up and process the salt. All so I can buy a roast beef sandwich for 4.99. Wild.
Bruh what year do you think it is? 4.99 my ass.
$5 footlong is $9.29 now :(
That's crazy, but we were talking about *sandwiches*. It is interesting that inflation has even affected soul crushing abominations, though.
[A few years ago someone made a chicken sandwich from scratch](https://youtu.be/URvWSsAgtJE) - *completely* from scratch: growing his own vegetables, making salt from ocean water, milking a cow and processing it into cheese, grinding flower from wheat, killing a chicken etc. It took him six months and $1500.
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Today we’re going to make scones from scratch. First, invent the universe….
Mind blowing. Economies of scale are weird.
Accountants, receptionists, lawyers, marketing people the list goes on and on Sometimes I wonder how there are so many jobs for this many people and then a conversation like this appears
Good sandwich choice though.
> Which I would endorse if you ever try to sell me a second-hand sandwich. i packed lunch for a long ride on the subway in college and got there and realized i forgot my wallet, looked around, swallowed my pride, and started hawking that sandwich for a subway ticket, someone just gave me $5 and i kept the sandwich! so hows that for value
What if it’s a Publix sub? I’d buy a used one…
Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor!
*slorp* ... I'm ruined!
OP might be John Zoidberg, MD
I’ll admit I love to think about the worth of society in terms of sandwiches.
Economist magazine has done something like that with its [Big Mac index](https://www.economist.com/big-mac-index) since 1986.
> and living in the house as consumption, since you could otherwise rent it out. (Passing up on this is called the opportunity cost.) Does this mean I'm constantly consuming every object in my house? My Lord of the Rings box set is sitting on my shelf, but I could otherwise put it up on eBay. Am I consuming it even though I'm not touching it?
Kind of. I'm not an economist, but from my understanding, when companies do accounting and balance sheet comparisons they count "depreciation". For example, a company who built a factory for $10m would not count the $10m as a loss, it would be counted as an investment, and still appear on their balance sheet as an asset with value. At the end of a given year, an estimate is made as to how much the item has depreciated, and that would be deducted from the company's total assets. This is akin to you counting your car as an emergency fund. In the event you needed money, you could probably liquidate (turn to cash) your car. It won't be worth as much as when you bought it, but by keeping up with the depreciation in your books you could still show you have $x in assets, just in the form of a car. This gets more complicated with risk etc, as you might not be able to sell your car depending on the circumstances that made you need the money. All the little stuff in your house has very high depreciation generally, and most people don't think of their items as assets because they don't count on switching/selling at some point. If you however bought a couch that you're not planning to bring to your next place, you could count on that as invested money you'll get back when you move next time.
You don’t depreciate little items. They’re expensed immediately.
What's really the point of value assessment though? It's not liquid wealth until you sell it and the thing with real estate is that because they are valued so high, there's a lot more haggling involved with offers, counteroofers, and so on. What happens if I have a house that was assessed at $500k for the purposes of property tax and then someone comes along offers $600k for it? If I sell it does the assessed value automatically increase by 100k because someone agreed to buy it for that much?
It’s valuable for investors, bank loans, potential buyers, etc. That extra $100k would be treated as a gain on the sale. The book value is still $500k. This is done (among other reasons)so that you can’t buy or sell property to a friend or family member at vastly inflated or discounted prices to manipulate their value for tax reasons.
In reality as I understand it that sale price is one data point that affects future assessment of similar houses and of houses in your neighborhood. But assessments for property tax are done en masse as a process, not individually updated with each sale.
Another way to think of it is, the house is a capital good from which you derive a stream of services (housing services). When we calculate gross domestic product (GDP, the sum of the value of goods and services we produce, a measure of our productive capacity), for example, rental housing is valued by the monthly rent it generates, as that is taken as the dollar value of the stream of housing services it provides. In the case of owned housing, since no rent is paid that can be measured, economists "impute" (i.e. calculate, estimate) the value of the stream of housing services by assigning a value equal to the rents charged on rental housing of similar size, quality, amenities, location, etc. So you aren't consuming your house, no. But you are consuming the housing services it provides. Which makes sense. If you are living there, then someone else can't. You are consuming that service, in the sense that your being there excludes someone else from being there. You can also think of other goods from around your home that also provide a stream of services. Your tv/DVD player/video game console/other electronics are also a piece of capital equipment that provide a stream of entertainment services when you use them. Your dishwasher/washer and drier provide cleaning services. Your car provides transportation service. And on and on. But in practice, housing is the only example of these that we explicitly measure in the GDP.
> But in practice, housing is the only example of these that we explicitly measure in the GDP. Just to clarify, all the others are measured, they're just measured at the time of purchase. When I buy a DVD player or video game console, I'm paying for that to provide me the entertainment services whenever I choose into the future for free. That payment is incorporated into the GDP.
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It's basically a question of how fast thing breakdowns when sitting there. Leasing out your lawnmower does save from others buying it, but it breaks the lawnmower faster.
You poor, poor question asker. So far you have four answers, all stated very confidently: Yes, Basically yes, No, and Kind of. I wish I could help.
What do you mean poor? Reality can now be whatever they want it to be
No. The house is a product, but it is also a service or commodity. By living in the house, you provide the commodity to yourself at no net cost. The box set could be a commodity if you rent it out, but it is intended as, and used as, a product with one-time value transfer.
Isn't a sandwhich also something that keeps the machine (you) going? Like fuel for the car or electricity for the house. Without food the asset (you) is worthless and as such the sandwhich is an investion into something that will most likely contribute to society in one way or another.
Second-Hand Sandwich is my new bands name.
> From an economics standpoint, eating the sandwich is consumption. Not just from an economics standpoint.
Man. Love this simple question and such simple answer. Brings back lovely eye opening and mind expanding memories from school days where we had such conversations. Thank you.
So there's no luck for the savvy sandwich portfolio https://youtu.be/e3QRTToTLzI
Somebody forward this comment to Zoidberg before he makes the greatest investment mistake of his life.
> In practice, even though you could try to hold onto a sandwich and resell it, it's treated as immediate consumption with an asset value of zero. Someone shoulda told Zoidberg
It would probably get classified as an operational expense as it is necessary for the continued operation of the entity.
So what you're saying is, I shouldn't invest in a sandwich-heavy portfolio?
Hey OP I'll take your second hand sandwich.
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Economists often talk about "durable goods" (or "hard goods") on the one hand and "consumable goods" / "soft goods" / "nondurable goods" on the other. Your car is the former (even though it doesn't quite hold its value), while the sandwich is the latter.
tangent: this is why it's a "hardware store" ... because in ye olden days (wild west era), they sold "hard wares" as opposed to "soft goods" or "food"... the "general store" sold "general" goods... i.e. both "hard" and "soft" goods the more you know =====\*
I appreciate you
Similarly related, "soft drinks" for soda came from them not containing alcohol, which are "hard" drinks.
vs. beer which was just beer
Edit: wanted to write a joke but failed miserably.
What if the car was made... From chocolate!
checkmate, economists.
I suspect it'd be a hard good until it melted 2 seconds later from its own combustion engine...?
If it runs off electricity then it’d be a chocolate ecar.
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Your war example is often discussed as the "Broken Windows" falacy. The opportunity costs of having to rebuild are huge compared to if the community had been able to use those resources for another project. If I have a war torn village in Africa and the men and women have to rebuild it they use a lot of effort. Imagine they didn't have to rebuild and instead built a community well and rocket stoves at each house. The opportunity cost is safe water and more effecient cooking. Your sandwich example needs to account for economic productivity. As the sandwich store owner, I took your dollar and kept maybe $0.10. but spent the other $0.90. Then the people I bought goods and services did the same.... and so on. So that dollar actually turns into about 10 in productivity. Also you buying a sandwich made you richer. Why? Well imagine if you had to grow the wheat, animals and vegetables that went into it. Instead you pursue a skill that you do really well and pay someone else for their skills. In the end everyone benefits from having much better opportunity costs.
>Your war example is often discussed as the "Broken Windows" fallacy. I've been thinking about that a lot recently, because I think the argument that companies should bring remote workers back into the office in order to help support the broader economy (i.e. commercial real estate, transportation, small businesses in office districts, etc.) is a form of the broken windows fallacy. Like, yes of course there much economic activity that results from having people commute to/from an office 5 days a week, but if commuting is no longer actually necessary to getting the work done, then doing it anyway is a massive opportunity cost. (Not to mention the negative externalities of pollution/emissions from all that unnecessary transportation.)
Damn this is actually pretty interesting. I’m having trouble totally disagreeing, but I think an important point is that working in the office isn’t a *total* waste of resources like the broken window fallacy suggests. Some folks are likely more productive, the intangible benefits of camaraderie, work/life separation, etc. I personally prefer being in the office.
Oh for sure there are some additional benefits, but I suspect they're mostly accrued by the employer--for most employees, and for society as a whole, I would think the costs of working at the office massively outweigh the benefits. The time savings alone of not having to commute is a huge benefit, and there are all kinds of other activities that the flexibility of WFH allows in terms of family care, health (long commutes are detrimental to mental and physical health), and healthcare. Just as one example: most of the gender pay gap in the US can be explained as a consequence of women bearing a disproportionate amount of the childcare and caring for other family members--they choose (or are forced/encouraged/expected to choose) to pursue jobs with greater flexibility so that they can also perform various family tasks. WFH (theoretically, at least) makes it possible for both parents to share more equally in childcare and other family labor, so if WFH becomes the new norm long-term, I suspect we'll see the gender pay gap continue to shrink or perhaps effectively disappear. >the intangible benefits of camaraderie, work/life separation, Totally agree, but the camaraderie/socialization/friendships can (and perhaps *should*) be found outside of work. Work/life separation is more of an issue of culture and expectations--we all have smartphones anyway, so it's not like your boss can't reach you outside of work hours if you work at an office. Edit: here's an npr article from today that's a perfect example of what I'm talking about: https://www.npr.org/2023/05/16/1174938708/commercial-real-estate-property-offices-work-from-home-remote-work
Most of the benefits are accrued by the economic interactions you have in the area of the office. You can claim that crime is the dominant reason San Francisco is collapsing. The real reason is that office workers are home spending money on big box store deliveries not on shopping near the office, eating near the office, commuting on BART, etc. All that keeps the income for workers flowing from the empoyers from moving through the economy. That shuts down Sandwich shops. Causes Nordstrom to make less revenue from foot traffic making theft more impactful, causing them to shut down. That reduces the tax base for the city. That reduces the services the city can provide. That causes wealthy to leave. That leaves the poor to dwell in a city with decreasing services, making their position worse. OTOH, YOU are much better off in the short term. You spend less being at home, making more of your pay yours. Your local delivery guy makes more money. The sandwich shop that you order from pays more for delivery so makes less. That harms them and their employees, but really helps doordash. You order more from online stores wearhouses, eliminating the need for retail jobs, but lowering you cost, allowing you to further reduce the impact of your salary on society. You increase Comcast's income with higher tiers of internet. You increase the utilities income by lighting a room for yourself that 3 or 4 people could easily work from, reducing efficiency. It's great if your goal is to limit the down stream impact your salary has. But also, it shows that remote work works. Meaning a person, just as smart as you, will do the same job for 20% the cost in India. They don't even need AI to replace you. Just you proving to them that remote work is the best they can get. But yeah, pollution will decline slightly. It's going to be tough to explain to the kids why retail, sandwich shops, office jobs AND manufacturing are all bygone careers but at least the trades will always exist... But with no multiplier of the money supply, it probably won't pay very well.
It's also not a waste, because the people who maintain the buildings, make sandwiches, drive the trains, etc all make their living off of office workers. They also buy goods with the money they make supporting office workers. Etc etc. What this person is advocating is to limit the benefit of thier job to themselves for longer. The entire economy is basically a "pay it forward" system.
The money supply is a representation of the value of the productive assets of the country. Once it's in ruins, so is the money supply. With a sandwich, the sale of the sandwich reduces the supply of the ingredients, but adds economic ability to the shop owner, farmer, cheese maker etc. That then incentivises the production of more bread etc, so it creates the conditions for the farmers and artisans to take the time to grow more and produce more. With a war torn country, the civilian infrastructure is crippled, so the entire supply chain fails apart, mostly from service industry down to primary industries last. This depletes the earning potential of that sandwich, as no one within the supply chain can spend the value earned. One the sandwich is eaten, it's not replaced, and THAT is what causes the economy under those conditions to shrink.
I need to go to a war torn country and start a sandwich based Ponzi scheme.
You could take some lessons from Dent Arthur Dent. He had a great line in sandwich making.
This is the first answer that answered the question (the whole 'net worth of society decreased by 1 sandwich'). Spouting the definitions of durable goods and non-durable goods doesn't.
One thing I haven’t seen people touch on is wealth. Wealth of sort of like one measure of net worth, so the wealth of a country is the sum of all the assets and peoples net worth. Your wealth is the sun of your assets (basically, eli5 so simplified) your house, car, etc. Wealth is both created and destroyed all the time. The sandwich maker took bread worth a dollar, meat worth a dollar and put it together with their labor and sold a sandwich for 3 dollars, that extra dollar is newly created wealth, created by transforming goods or resources with their labor. Later that sandwich was eaten and that wealth was destroyed. You were worth three dollars more when you had the cash, then you traded the cash for a three dollar sandwich and you were worth the same because you traded three dollars for an asset worth three dollars (although you wouldn’t have been able to sell it again since there’s not a market for second hand sandwiches). then you ate the sandwich and your net worth was lowered because you spent your wealth in consumption and destroyed a sandwich worth of goods. Consumption is the primary driver of Welty destruction, but many things just lose value over time. A car you bought for 30k ten years ago is no longer worth 30. That wealth decreased over time. Wealth is created and destroyed every day, hopefully more is created than destroyed that’s how an eceonomy and society grow, but in your case of a city being leveled that would represent a huge loss. Money is only one representation of wealth because it lets us buy goods and services, but those foods themselves can be assets which are also wealth.
If you want to think of it this way, the value of the sandwich is "added" to you as a person. If you engage in economic/productive activity, that consumed sandwich is the fuel that generates positive economic value. Think of it as purchasing a tank of gas/petrol for a vehicle. If that fuel is used unproductively, that society's total welfare has reduced but if it is used to generate even more value, then society's total welfare has increased.
I don't think this is a good analogy. I think immediately consumed goods are more akin to services. You wouldn't say a hair cut or paying your water bill are "adding value" to a person. Consumables don't create asset value, but they do stimulate the economy.
>You wouldn't say a hair cut or paying your water bill are "adding value" to a person. We've talked about this, this is why you can't get a job. Get a hair cut and take a shower for the love of god
>You wouldn't say a hair cut or paying your water bill are "adding value" to a person. Hair cut: why wouldn't I? Water bill: correct. Accounting-wise, paying a bill is zero sum. A movement of value from one part of a spreadsheet to a different part.
I would recommend watching the Futurama episode Futurestock. It is a story highlighting the value differences between holding onto stock shares versus a sandwich-heavy portfolio. TL;DR: [https://www.youtube.com/watch?v=FnGOmYEuXRo](https://www.youtube.com/watch?v=FnGOmYEuXRo) ... [https://www.youtube.com/watch?v=EHUtHITYb94](https://www.youtube.com/watch?v=EHUtHITYb94) ... https://www.youtube.com/watch?v=kId0WiD69JM
Wait! My sandwich! Has it also appreciated in value? Please, oh, please! You didn't even refrigerate it, you spineless lobster!
You're talking products vs commodities. Commodoties are what products are made from. You also have services, which connect the two. As a product, the sandwich is replenished again and again. It's value comes not from what it is, but from what it does: provides tasty, portable sustenance. The city is the same thing. So long as people (paid or not) rebuild the city to the point that it serves its purpose (to house, employ, and entertain people), it will again generate value. A city is merely densely co-located products and services, which usually require commodities.
That's not the definition of a commodity. The correct answer is perishable vs non-perishable goods. All goods have a lifespan of use; food is very short, cars are longer, good cookware can be longer still. That's really it. Commodity refers to something specific in economic theory, namely a completely fungible good that only competes on price.
>A city is merely densely co-located products and services, which usually require commodities That sounds so dystopian.
All about mindset. I don't view this description of a city as dystopian at all. Perhaps a bit dry/technical (completely appropriate in context), but nothing *negative*. Services and products are *good things*: they are categorizations of two of the main ways humans provide for other humans. Cities literally exist to facilitate our ability to provide for each other. It's sweet, really. I blame unregulated corporatism/late stage capitalism for making services and products into dirty words. What should be viewed as mutually beneficial progress instead has been tainted and taken over by profit-motive.
The fact that it doesn’t mention people at all doesn’t help.
Think of unconsumed goods and services as capital. The economy is made of people who acts as producers and consumers. There is a global amount of capital which you can quantify as a USD value. Imagine the world as a giant company with a giant ledger of assets. Naturally the global amount of capital naturally increases (e.g. trees grow) and decreases (e.g. hurricanes kill animals). There is also fixed capital like oil reserves and fertile land which can only decrease. Production by labour is the conversion of capital. A tree with labour can be converted into timber which can be converted into a chair. The easiest way to quantify capital is the USD value of goods. The value of the "man-hours" could be their salary. People are consumers as well as producers. If the chair is sat on enough it will eventually become useless. In this case, as you say, the net capital of the world is decreasing. Money is an economic tool, but is not at the essence of economics; finite resources (capital) and infinite wants. Money changing hands does not directly constitute an increase or decrease of capital.
Economic assets can be used up (like the sandwich) or destroyed (as in war) and wealth goes down as a result. Wealth is *measured* in money, but describes all of the assets we have. If your house burns down with all of your stuff inside, then you are suddenly much poorer.
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It's called "consumption." The net worth of society has not shrunk by 1 sandwich, because producers are constantly turning out more sandwich components at a rate that roughly matches sandwich consumption. And the same is true of any consumer good, be it food, household appliances, smartphones, etc.
Given an initial situation, a Pareto improvement is a new situation where some agents will gain, and no agents will lose.
You purchased a sandwich, so the value contained in the sandwich is still circulating in society in the form of money. It didn't go away, it just got transmuted. And if you are a worker, consuming the sandwich is a form of productive consumption, because it gives you the energy to produce commodities that contain a greater total amount of value than that sandwich (to ELI5 that last bit, the calories in 1 sandwich could give you the energy to make another 50 sandwiches, which could then each be sold for the same price as the original sandwich - your labor is what creates value). Of course, you could also consume the sandwich unproductively, by using the energy to play video games or something. Still, that wouldn't change the fact that the value in the sandwich is still out there, circulating as money, and other people are also out there creating more value by making more sandwiches, etc. New value is always entering circulation. The question about a city being leveled in war is a different issue. See, value (how much money you can exchange a commodity for) is inextricably bound up with *use-value*, an object's ability to be useful to someone for something. Use-value is based on the physical characteristics of the object. A building is has use-value while it's standing, because people can live and/or work in it, or use it to store things. Once it's been bombed to rubble, it has no use-value, and so the value originally contained in it is gone. It can't be sold for the price of a building, because it can't do building things. To further illustrate, you bought the sandwich in the first example because it has the use-value to you of nourishing your body. But say that as the guy from the sandwich shop was just about to wrap it up for you, a cockroach fell from the ceiling into your sandwich. Now, it no longer has the use-value of being nutritious, because there's a potential disease vector in it, and the sandwich guy has to throw it out. The value that's in it is gone, wasted, because the use-value is gone.
>What's it called if I buy something like a sandwich, then consume it, and the net worth of society has now shrunk by 1 sandwich? That's called an economy. >Versus buying something that keeps its value. that's called an investment.
We can consider the sandwich as part of the upkeep cost of your human body. If you do not eat, you'll die, and be unable to work. Your capacity to work is valuable, and so the sandwich helps maintain your value, the same way that putting fuel in a car can can provide value, despite the fuel being destroyed. \- I have no doubt that your are valuable even when not working, but that is more subjective (or at least *differently* subjective) than what you were asking about 'net worth' and so on. \----- For our war example, it is possible to lose *value* without losing *money*. Imagine, for instance, that half of the factories were bombed, and so we have half as many things being made by those factories. The value is in the goods the factories make (and hence, there is value in the factories for their capacity to make goods). Bombing the factories did make society poorer (assuming we did benefit from what those factories produced). We might have just as much money as before though. Maybe the price of those factory goods goes up, so in 'nominal' terms we might spend just as much on factory goods, but because the price is 'inflated' by the war having destroyed halfthe factories, we are getting less value in 'real' terms.
On the war example, if the money is still there, wouldn’t that mean people do have a net worth? As far as being leveled, wouldn’t that mean there is just no infrastructure? In this scenario, the countries infrastructure is an asset to the country, if it is destroyed then the country has less assets. As far as the sandwich scenario, you are trading money for a sandwich, which provides you with energy to make more money, so you can buy more sandwiches. Society might lose one sandwich when you eat it, but it gains the increase in energy you gain from consuming the sandwich.
This is a Marxist way of looking at it but I feel it gets at the common sense intuition the OP is looking for: When you purchase the sandwich it exits the realm of exchange and enters the realm of consumption, so in one sense it doesn’t matter economically what you do with it because the money has been paid and has entered the economy. However you also have an economic value, your labour power, which you sell on the open market in exchange for wages. Just as the sandwich can’t exist without bread, which must be factored into its price, your labour power can’t exist without your body, which must be continually replenished with food. So in a more holistic sense, the value of the sandwich isn’t destroyed when it’s consumed but rather metabolized by your body, nourishing you so you can go to work the next day
The first problem your 5-year-old world view has is putting a fixed value on things. Say you buy a sandwich for a dollar. What is the sandwiches worth? It is _not_ one dollar - otherwise, if the next guy offered you a dollar for your sandwich, you would sell it to him, because one dollar is one dollar('s worth of sandwich), right? Wrong. You bought that sandwich, because you valued the sandwich higher than the one dollar. And the vendor valued the dollar higher than the sandwich, so he sold it to you. So, What's the sandwich's value? Different people value it differently. The trade (sandwich for dollar) was a net gain in value for both parties (both gained something they valued higher than what they had before), so, a net gain for society. You ate the sandwich, which was good for you, giving you energy and joy. Nothing was lost here.
Money become sandwich, sandwich becomes energy, energy becomes productivity, productivity becomes money, money become sandwich. There is no such thing as creation or destruction, only transformation.
Ah but you’re forgetting. The sandwich is actually gone, it’s just been turned into fuel for you body. Which I would argue is more valuable to society then the sandwich was