Why We Value Suits at $300

[Ridiculous] Proposition: For select products we should abandon marginal-utility theory and invoke the Labor Theory of Value when setting the price.

Last night I was contemplating the prices of suits, as in male business attire, and decided the prices were not quite a paradox, but close. More like incredibly silly. The reason it’s not a paradox is that I believe, correct me if I am wrong, I can explain it.

See, when you’re a poor college kid and you need a suit, you wonder how on earth anyone can actually value a suit at $300. I mean, it couldn’t possibly cost that much to make the suit could it? Surely I don’t value it that much! And there, of course, is the irony. Because I obviously do value it that much, as I fully intend to shell out the money to buy one.

It doesn’t seem to me that I think a suit is worth $300, but if we assume I’m a rational actor (I know, some of you would say that is a Very Bad Assumption), then I will only pay the money if the marginal benefit of the suit is greater than the marginal cost ($300). So, theoretically, there is some point at which I would cease to pay good money to buy a suit, because the costs outweigh the benefits. I’ll hazard a guess that that point is around $301….

Now, if we decided to price suits according to the Labor Theory of Value (good old Marx, who really stole it from Smith), we could avoid this problem. Say the costs of making my suit broke down like this:

The total value when using the Labor Theory of Value is only $130. Now that sounds a heck of a lot better than $300. Goodness, we could even include an extra pair of pants and a vest, and still not break $200. Now tell me, why don’t we do this?

I propose we set up a government organization, call it the Department for the Evaluation Price Theory (or name it after the instating bill: Changing History for Economically Affordable Prices), that will examine the state of the economy and choose certain products to evaluate under the Labor Theory of Value. I also propose that we mandate that suits are permanently on the list. Other products on the list might include textbooks, computer software, and small children.

The DEPT of CHEAP would revolutionize the price structure in this country! We would no longer have young college males aimlessly walking around looking for affordable suits. We won’t even go into the implications for other products, but the benefit to the economy would be immense.

In other news, I also support moving the entire economy into a centrally-planned system modelled after the Soviet Union’s five-year plans.