[mdorazio]

This “people should be paid based on the value they create” myth comes up a lot on HN. Compensation is only tied to value creation as a maximum level. The actual compensation level is whatever people are willing to work for while doing good-enough work. If you want to price your work based on value, you need to run your own business.

[pfdietz]

Markets are how economic value gets defined. Trying to define it otherwise is fraught with often disastrous difficulty. This is one of the reasons central planning fails.

I think one of the reasons so many creatives feel cheated is there's far too much creativity, so the marginal value of more is low. In that situation of overabundance, some other step in the value chain will deliver most of the value, and reap the reward. This feels like exploitation, but it's just the market telling creatives they need to be producing something else.

[ip26]

The market is a system that finds a price within a given context. If conditions allow for price opacity, the market will find a different price than if price transparency is forced. Both numbers can be described as a “market price”.

[xboxnolifes]

If economic value is defined through markets, how then does one argue against markets' ability to assign value? What words should be used other than value?

[mdorazio]

Typical words for this include “monopoly/monopsony”, “regulatory capture”, and “necessity goods”. There are others, too, but they generally don’t apply to creative outputs.

[xboxnolifes]

While those words are used to critique market failings, none of then are necessarily about the value of something independent of market efficiency. They always assume that the market assigns value correctly as long as you just avoid monopolies. They start with the assumption that markets work at assigning value for all things.

How does a market determine cultural value. What is the value of a priceless family heirloom? What is the value of human connections? How do you communicate these thoughts without first assuming that markets correctly assign value?

[pfdietz]

You want to do something that makes no sense? You figure it out.

[xboxnolifes]

what you're saying right now is that markets are beyond critique.

[ip26]

It’s a thought experiment. What are the reasons you aren’t paid for the value you create? Can you fix some of them?

In this case, it’s postulated the biggest single factor is a monopsony.

[pdonis]

Yes, and the only way to fix the monopsony is for creators to own their own distribution channels so they can sell directly to their customers instead of selling to middlemen who take the vast majority of the profits and pay them peanuts.

[ip26]

Or collective bargaining.

[pdonis]

> Or collective bargaining.

The problem with collective bargaining is that it either involves unmanageable transaction costs, or an unmanageable principal-agent problem. Either every single creator has to be directly involved in the bargaining, which can't realistically be done, or the creators have to empower some small subset of them as bargaining agents, which means the rest of the creators get screwed by those agents.