Two SN convos this weekend had my mind go in the direction of value: @mo’s pretty uneducated and unimpressive rant against capitalism (#1553151) and merefield’s remarks on value, given to us via @scoresby’s online forum survey (#1552780).

Let’s first summarize and restate the positions

Mo thinks capitalism “exclusively” maximizes profit, among some of the other deranged things argued in that post. Uninterested in exploring what the term actually means (#1434507, #1550794), we’re told that

The capitalist law of value is the principle that production is organized around what is most profitable to capital rather than what is most necessary for human well-being or social benefit.

Set aside that nobody can objectively know what’s “most necessary” for well-being or “social benefit” (ugh, what an ugly word), capitalism is trying to effectively cater to exactly that, mediated as it is via market-tested betterment: prices and commerce, with profit being the positive feedback that what you created was more highly valued by others than what you consumed in the process.

But I want to start with one of the most memorable articles I’ve seen at The Daily Economy (an outlet I write for), by Mike Munger six years ago: “Why Do Basketball Players Make More Than Teachers?”

In it, he explores — with the keen eye of an economics teacher — the curious observation that, surely, what teachers do is more socially valuable than what NBA players do...? One is for our kids and a crucial investment in their future, the other for mere entertainment. He asks rhetorically what Mo seems to ask seriously: How come basketball players, objectively not very useful, are paid millions but teachers, who are critical, are paid a normal, middle-class wage?

Dig deeper, and the question/mistake is centuries-old, with most people trained in economics (or common sense...) rolling their eyes. The critic misunderstands margins (#1471811). The marginal price of a teacher’s services is some $74,000 a year… but the marginal price of a basketball player is negative.

If you were building an NBA team, you wouldn’t start with marginal players, you would start with the best, the diamonds. There are a few elite players, often referred to only by their first names (“LeBron,” “Giannis,” “Dirk”) that you might build a team around. Signing them first is expensive. Then as you add marginal players, the cost is less. Of course, the relevant margin is not the worst player in the NBA; it’s not even the best player who failed to make the NBA.

No, the marginal player is the one who has a negative salary, the 40 year-old guy who pays for a membership at the YMCA or college gym to play basketball. Those folks are not being paid more than teachers, because there are tens of thousands of those foul-hacking, can’t shoot with a hand in their face, smaller than baller gym rats.

Marginal basketball players pay to play; marginal teachers earn at least minimum wage. Ergo value flows indeed to what society values highest. It’s just that you’re comparing the wrong things when you’re comparing the salaries of a few elite basketball players with millions of regular everyday teachers. And what *you think valuable, comrade, isn't necessarily what "society" thinks valuable. #1534753

Take-away: capitalism doesn’t “exclusively” maximize “profit,” but provides a dynamic, market-tested, competitive exchange of value across various margins. And it does a pretty good job allocating/remunerating value to what people approve of. (At deeper inspection, that's almost definitionally what voluntary trade means...)

merefield's observation in Scoresby’s screenshot is less elaborate than Mo’s rant. In response to Scoresby describing how SN uses money to mediate content (#1552780), merefield responds:

No, this will fail
In today’s free, open web you can’t charge people to create content for you. They will shrug or laugh and move on.

Setting aside the psychology or hypothetical of what people may or may not do, he, like Mo, misunderstands the relative price of the appropriate margin.

The web is indeed free to use, but it’s drowned out by bots, spam, slop, and a complete avalanche of material. Nobody can consume everything, not even in a handful of small fields they devote themselves to. Not even Bitcoiners can read everything on Bitcoin (maxi, #1553294) Twitter, to say nothing about any other topic they may be interested in (health, travels, American football, F1, chess, chemtrails etc, etc).

With infinite generation comes not great but zero responsibility. With infinite generation (and replication and echoes), you quickly evaporate any economic rent and send every price of online content toward zero. #1550071, #1496889, #1471628, #1449095 etc etc.

That means what we’re actually “charging” for isn’t for “people to create content for you,” because content narrowly speaking has no value — its scarcity price has long since been competed to zero — but attention does. Curation (#1553502), even more so.

Charging for posts is a way to demonstrate, explicitly and objectively and undeniably, that the creator of those thoughts/comments have negative marginal value, that they had to pay to put them out there. Skin in the game, Scoresby said in the comments (#1540851).

You’re paying for (ordered) attention, basically. Sybil-defending your email is a similar such idea: I’ll read your infinitely replicable words only if you pay some micropayment, make it worth my time to look at. Fair, says the steelman of merefield, doesn't _zero_ price beat negative price (=cost) for a user? Not if it ensures that others will (thoughtfully) look at it.

Screaming endlessly into an empty void achieves nothing. Paying for the front page of e.g., SN, tells others you think this thing is so important it might be worth their while... plus, via SN rewards pool, literally pays them to engage.

I wrote a ranty, angry thing many years ago with that message (“You’re Not Worth My Time”) I hadn’t figured out bitcoin micropayment and the SN rabbit hole but I’m starting to see the point.

It took an AI crazy and constant deliberation about infinite generation --> marginal value of everything toward zero to finally get it.

And now I think I get it

You’re paying for attention. And others, gracefully, reimburse you for your effort when and if they find it personally valuable. Maximizing profit to capital, or capital accumulation, need not apply (well, OK, “stacking sats”…).

That’s the Nostr story anyway; SN uses a rewards pool and competitively/strategically bidding for it, which creates some weird incentives. That’s a topic for another time.