"Education bubble"?

[ja_va]

There is a popular conservative motto which is repeated over and over again recently: "education is the next bubble, people have already said. Financing college is the new real estate, and we know how that works out."It has been repeated so frequently that there seem to be a need to address it

Comments

[ja_va]

As with houses, increasing demand leads to higher prices in education.This would not have been a problem until people began to buy houses purely for profit. They would buy to resale. This is how bubble is formed - you do not need a house, but you buy anyway, you buy bigger one, you buy second one, etc

[gunslnger]

I think that your policy of uttering few words at a time shows complete lack of understanding of an issue and a fear of showing your lack of understanding of an issue.

Another thing you think incorrectly.

Education costs money, and I will not provide it for free.

LOL. You don't have any to offer anyways.

[ja_va]

I do not "think", I know.

[ja_va]

As for your question, your answer is wrong, as it makes assumptions about things we don't know, such as whether the trench is desired or not, whether there is something going in it or if it's an end product, etc

This is why we do not know the "real" value; we know the market value. Market value is determined by the price people are willing to pay. Anything other than that would have to assume that someone knows things people who buy and sell product do not know themselves about their "real" utility, and this is just voodoo dancing.
Nobody knows what people want and how much they are willing to pay for it better than people themselves, and in a market people are showing it through prices they pay. In fact, short of the price they will not be able to express it, either. If someone asks you "what is the market value of your car?" and then adds "but do not say what you think is its price" you will be puzzled and will not be able to answer at all. What is the market value if it is not the price? You can express it in pounds of potatoes

[ja_va]

Here is a quote on the subject from Wiki, if you can manage reading and understanding it you will see what a bunch of nonsense your view is:

In neoclassical economics, the value of an object or service is often seen as nothing but the price it would bring in an open and competitive market. This is determined primarily by the demand for the object relative to supply. Many neoclassical economic theories equate the value of a commodity with its price, whether the market is competitive or not. As such, everything is seen as a commodity and if there is no market to set a price then there is no economic value

[gunslnger]

The best explanation is actually the Leisure Theory of Value.

[ja_va]

Who the hell is Michael Miller? And what does value of leisure have to do with the subject discussed? Did you read it yourself, and if you did, why can't you explain it in your own words instead of providing a useless link? I studied the subject, I read books on it, I wrote essays on it, I had exams on it, do you really think idiotic link with one page of text is going to "explain" me something?

[gunslnger]

No, by this point I don't expect you to actually learn anything.

[ja_va]

Who said "learn"? I quoted your term "explain". It does not "explain" anything, which you claimed it will.

[gunslnger]

It explained what value is and where it comes from. But, like I said, I don't expect you to actually learn anything from it.

[ja_va]

Once again - it talked about leisure value. But if you understand what it said, why can't you repeat it with your own words?

[gunslnger]

No, it didn't talk about that. It talked about how the value of everything is directly related to the amount of leisure that is given up for it in exchange.

[ja_va]

Again - if you understand what it said, why can't you repeat it with your own words?

I can only imagine how my professor would laugh if in response to a test question I would quote pages in a book that give an answer to this.

[gunslnger]

I just summarized it for you. I can't imagine how to make it any easier for you.

[ja_va]

If what you "summarized" is the essence of it, then I must disappoint you. It is nonsense.
In my example people who are paid 1000 dollars gave up a lot of leisure. But they created something that has zero value (a trench, which you do not need in your back yard).
Unfortunately, value has nothing to do with what you do or do not have to give up to obtain something, it has to do with what you gain upon obtaining it.
Here is another example - you are thirsty, I am not. I just had a lot of water to drink. In front of us is a bottle of water. It takes exactly the same amount of leisure to obtain it. Yet it means nothing to me, and I will not pay a penny to obtain it; while it means a lot to you and you are ready to pay 100 dollars for it, 'cause you are dying of thirst. If someone is selling this bottle and if he is the only one who is selling it, then he will charge you 100 dollars and you will pay. This is going to be a "real" value, or a market value of this product. Whether or not you gave up any leisure to obtain this 100 dollars

[gunslnger]

In my example people who are paid 1000 dollars gave up a lot of leisure. But they created something that has zero value (a trench, which you do not need in your back yard).

Then the person who paid them $1000 made a bad exchange, in your opinion. But the workers fairly traded their leisure for $1000. Their labor was worth $1000 exactly because that's how much their leisure was worth to them. And the person who paid them $1000 wanted the trench for some reason and was willing to give up $1000 that he had previously traded for his leisure for it. The value is determined for that trade only, it doesn't stick to the object, which is all you've shown.