John Quiggin: MMT: Noted
Consumer Surplus from the Internet, Youtube Edition Weblogging: The Economic Value of Marina Shifrin

Alex Tabarrok: The BS Economics of David Graeber: Noted

Alex Tabarrok: BS Jobs and BS Economics:

David Graeber’s peculiar article on bullshit jobs (noted earlier by Tyler) does have one redeeming feature, a great example of poor economic reasoning:

…in our society, there seems a general rule that, the more obviously one’s work benefits other people, the less one is likely to be paid for it. Again, an objective measure is hard to find, but one easy way to get a sense is to ask: what would happen were this entire class of people to simply disappear? Say what you like about nurses, garbage collectors, or mechanics, it’s obvious that were they to vanish in a puff of smoke, the results would be immediate and catastrophic. A world without teachers or dock-workers would soon be in trouble…

This, of course, is just the diamond-water “paradox”--why are diamonds, mere baubles, so expensive while water, a necessity of life, is so cheap?--the paradox was solved over a hundred years ago…. Water is cheap and its value low because the supply of water is so large that the marginal value of water is driven down close to zero. Diamonds are expensive because the limited market supply keeps the price and marginal value high. Not much of a paradox. Note that, contra Graeber, there is nothing special about labor in this regard or “our society.”

Moreover, it’s good that prices are determined on the margin. We would be very much the poorer if all useful goods were expensive and only useless goods were cheap.