Karl Marx, 19th century philosopher, advocate of communism. Karl Marx used the labor theory of value. The basic idea of this theory was that the value of goods and services should be based on the amount of labor required to produce the goods and services.
In theory, this sounds great, because it sounds fair, but is that actually how society naturally functions? No, so should we go against the natural workings of society to instate this theory? It matters how long it took you to make a painting, and how much it cost you to make it, but is the average person going to spend 10,000 dollars on every painting they see and like? No, that is not how supply and demand works. If your painting does not sell for long enough, you lower the price, and then maybe you can sell out of all your copies because what you were offering is worth it to a majority of new homeowners.
For the value of everything you try to sell to equal the amount of labor that went into producing your product, nothing becomes affordable, and that makes the supplies you need to produce your own things to go up so no one gets anywhere. The market is a place of challenge, it’s a game to beat the other person out, and that is good.
In order to make more sales at a product someone else is also selling just down the road, you need to listen to your customers and give them a better deal, faster product, more specific customized goods, something. The other guy down the road needs to come up with his own niche, or one of you will go out of business, so the customers get the best product for the lowest price. One of you is now becoming more valuable to the economy by answering to other supply and demand.
This is why big businesses like health care are not good at what they do. A bunch of bureaucrats meddle with the system and suddenly healthcare is keeping in line with what the government wants from them and caring less about how happy the customer is. Healthcare is just one of many examples of what happens when you interfere with the natural economical evolution of supply and demand, which is exactly what Karl Marx wanted to do by making the amount of labor equal price value.
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