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therbibbles are unlimited, therefore they're cheap. widget craftspeople are rare, and therefore expensive. cheap + expensive = still expensive, so widgets are expensive.
supply of therbibbles decreased by 1 supply of widget craftspeople - no change supply of widgets + 1 net value change = +1 expensive - 1 cheap (positive net value, ergo not zero sum)
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kraplach is in limited supply, therefore expensive thingamammy crafstpeople common, therefore cheap expensive + cheap = still expensive
supply of kraplach -1 supply of thingamammy craftspeople n/c supply of thingamammies +1 net value change = +1 expensive - 1 cheap (postive net value)
_______________ in each of these productions, the value was increased by the value added by the laborer (as set by market demands). The laborer was not decreased. Now lets sell our widget and thingamammy and see what happens ________________
the widget craftsperson sold his widget, and turned around to pay the guy he got the therbibble from, pocketing a nice chunk of change.
The thingamammy craftsperson sold his widget, turned around, and gave most of the money to the guy he got his kraplach from.
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So, all the revenue from sales disappeared, didn't it? Where's my surplus?
The widget craftsman has a valuable skill. He could have gone elsewhere to apply his trade. He had to get paid, or the widget wouldn't have gotten made.
The therbibbles would have been there anyway. No one made them. Paying for them is a bit assinine.
______ How about the other case?
The thingamammy craftstman has a less valuable skill, but still he has to be induced to use it. He takes his cut.
The supplier of the kreplach has a valuable commodity but who supplied it? How do you pay him? Why does he own it? That's why this is where the surplus goes. The kreplach supplier gets paid for the work nature did? Because he 'owned' the kreplach?
Note that if the kreplach supplier did any actual work in getting the kreplach from it's natural state to market, then he too would earn a wage. As it is, he's getting paid 'Rent' for the use of a natural resource that somehow he was recognized as owning.
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The surplus goes to the owner of land and natural resources - what Adam Smith termed "Land" as part of the factors of production. "Land" + "Labor" + "Capital" = "Wealth" It wasn't until later that the austrians conflated land with capital. They then had to have a reason for someone to get the surplus, so the took a subset of labor, labled it "Entrepreneurship", and allowed that person to keep the surplus, labeled "Profit".
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