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Comment by gtsop | Hacker News Reader

> Programming is a skill sure, but it does not create value, it creates programs.

Economic value is created when a human being spends man-hours to produce an artifact that other people need and thus are willing to pay for. Programming is a form of working, as is designing, researching, building, plumbing etc.

The artifact of programming (ie the program) is the value you create by working.

Programs do not by themselves produce value because. if that were the case we would all run "programs " 24/7 on our computers and produce infinite value. Programs help other human beings produce value by putting in the man-hours in a more efficient manner than without the program

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>Programs do not by themselves produce value because. if that were the case we would all run "programs " 24/7 on our computers and produce infinite value.

Web shops, they're programs running on a computer 24/7 making money doing a job a person could do, they cost next to nothing.

Only a little bit, the idea is what creates the majority of value, not the actual work put in.

The man-hours spent are irrelevant.

If someone is doing strip mining by men with shovels, the value they create is not the price of the mined material, but the value that that material brings when it's put to good use.

If someone comes along start doing strip mining by truck and bulldozer, they will spend a fraction of the man hours, and yet create orders of magnitude more value.

With all the respect, but you've got your economics wrong. That's alright though, i don't mean to be disrespectful by saying that. The bedrock of prices is human time spent (yes there are exceptions, but they are just that, exceptions)

> If someone comes along start doing strip mining by truck and bulldozer, they will spend a fraction of the man hours, and yet create orders of magnitude more value

They only reason the truck guy would create orders of magnitude more value is that, in genreral, the rest of the people would work manually. The truck guy would sell the volume of mined materials at the market rate and the market rate is based on manual labor. The truck guy has an advantage. When everyone gets a truck though, his advantage will be lost. He will make as much money as the others and prices will drop because suddenly everyone has a truck and it cheaper to mine because way less manual labour is involved

It's entirely okay for you to have that point of view.

I disagree though, he wouldn't sell at a market rate, he would sell below, and enough below that market saturates at his own price, this either increases the market size or new markets based on the wider and cheaper availability of his product emerge.

Recognizing what to do is the most important.

Whether they would sell below market rate is subject to strategic, legal and even political factors.

However, bare in mind there are math involved here.

If the market sells 1 ton of iron for 20$ (manual labour) and I manage to get a truck I could either sell 1 ton for 20$ as the others and make more profit than them, or I could sell, let's say 1 ton for 10$. This is a strategic move that would squeeze the competition, but it means I sell more product for less money than others. It's not 100% the correct move for every company at every buisness sector.

There are even more agressive moves, selling goods bellow cost in order to squeeze out the competition. There are even less companies that can pull this off.

At the end of the day, technological advantages are ephemeral and are meant to be used (by whichever strategy) while the competition hasn't caught up yet. When the competition catches up prices inevitably fall (unless there is a cartel of course but that is another topic)

You sell 1 ton for $20, and I sell 1 ton for $10 but thereby increase the demand (for my cheaper iron) more than double, I'm not only going to outsell you in "tonnage" but also earn more cash than you. My cheap iron will make people make things out of iron like never before, things you wouldn't even consider back doing with $20 iron.

The scalability of software greatly amplifies this point.

It's not the work being done that creates value, the work must be done, sure, it can be done by anyone.. Most programmers have the technical skill to build billion dollar products, and some of them do (mostly for others), and yet, most of us are not "fu" rich, because we've not had the idea for what to build with those skills.

Largely I agree with you, except that particularly in software, ideas are a dime a dozen and good executions of ideas are much harder to come by.

However, the market is full of popular, poorly implemented ideas. So I guess you're right.

> It's not the work being done that creates value, the work must be done, sure, it can be done by anyone.

If you have a great idea, can you covert it to money without working? No. Maybe, you might say, you can sell it to smdy else, thus you made money. Ok. Does this person who bought your idea made any money without putting in any work? No.

I challenge you to become rich by making up a lot of great ideas and doing none of the work. Go ahead.

I can do the work, easily, but I can't come up with an _actually_ good idea, which is my point to begin with.

Work = Easy. Good idea = Hard.

Ideas are not good just because someone who has them think they're good, there are lots and lots of bad ideas, and for most of them, their owner is under the illusion that they're good.

Since you said "economic value" specifically, I'd have to say that the man-hours are only one of the factors that could determine value. Strictly speaking, economic value is determined by supply and demand. Man-hours are a cost and help determine the shape and position of the supply curve of a given good or service, but the demand side is almost completely independent of how much effort it takes to produce something. Instead the demand curve will be shaped the culmination of individuals' marginal utilities (the perceived value of the next additional unit of a thing) for the good or service in question. On a more philosophical note, value is entirely subjective, but the equilibrium price model is compatible with value's subjectivity and gives us a powerful paradigm for understanding why some things are more "valuable" than others

>if that were the case we would all run "programs " 24/7 on our computers and produce infinite value.

Ever heard of bitcoin mining? j/k :D

Haha, yeah I thought of it as soon as I typed the words :D I know you are joking, but seriously speaking, it is only a single class of programs out there and does not necesserily create value, most people would run that at a loss

So technically speaking, yes some programs can, under certain conditions, be ran 24/7 and make value :D

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