EconPop - The Economics of The Treasure of the Sierra Madre
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In this episode of EconPop, Andrew discusses John Huston's classic 1948 adventure film, The Treasure of the Sierra Madre. Subjects include subjective value, Karl Marx's Labor Theory of Value, and opportunity cost.
EconPop is the TH-cam series that sifts through the haystack of popular culture to find the needle of economics within... and then stabs you with it!
Starring comedian Andrew Heaton, EconPop takes a surprisingly deep look at the economic themes running through classic films, new releases, tv shows and more from the best of pop culture and entertainment. Heaton brings a unique mix of dry wit and whimsy to bear on the dismal science of economics and the result is always entertaining, educational and irreverent. It's Econ 101 meets At The Movies, with a dash of Monty Python.
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CREDITS-
Executive Producers: John Papola and Maurice Black
Starring and Written by: Andrew Heaton
Directed by: Marshall Walker Lee
Produced by: Weston Woodward and Marshall Walker Lee
Director of Photography: Andrew Orsak
Edited by: Andrew Orsak
Hair & Makeup: Suzi Pannenbacker
ADDITIONAL CREW:
PA: Andy Fernandez
A Production of Emergent Order emergentorder.com
Produced in Association with The Moving Picture Institute. thempi.org
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"It's overflowing like a backed up septic tank. Let's dive in" That may have been the greatest line I have ever heard.
This was AWESOME!!! But one of my favorite quotes from the movie is about professional licensure. I mean, free people should not need a state license to cut hair or get married or sell real estate... So, here is the quote, which I use often: "Badges? We don't got no badges? I don't got to show you no stinkin' badges!"
You guys need to do these more often. They're incredible.
This episode could be subtitled "Why a cheap piece of cardstock with the picture of the right athlete can be worth several years' salary."
gold is a place holder,
i guess because it doesn't corrode.
anyways,
you got me to see another way of seeing the problem.
thank you.
I have to say your humor that you bring to excellent economic lessons absolutely makes the field of economics - typically presented in a dry, sleepy, monotone - very accessible.
Nice job!
"Lastly nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value." Marx
Which would explain the value of diamonds... oh, wait...
svaksmeta so it's the amount of labour is based on a value of a commodity, not the value is based on labour
The intro is so hilarious. I've watched it at least ten times now. I am seriously considering turning it into a ringtone.
"Dobbs stole the gold, just like Nixon." Cute! Though one could equally well have have cited FDR.
Most enjoyable.
Thats not how labor theory works! Here's missing that the value of a good is the labor "socially neccesary". By socially necesary you have to meanings, 1: how much labor does it takes to a society to make the good and 2: THE GOOD HAS TO BE NECESARY FOR SOCIETY. this second point is key in labor theory and it is not mentioned
adam smith also used labor theoryof value
+Brooks Gorden which doesn´t make it right
true
Economists are nothing but philosophers, the true noble men of the world. They are better than the fasted car in the world.
- Adam Smith
Love Andrew Heaton. I recently had him on my podcast Economic Rockstar.
Check it out on iTunes: itunes.apple.com/ie/podcast/economic-rockstar/id941441148?mt=2
or on Stitcher Radio: itunes.apple.com/ie/podcast/economic-rockstar/id941441148?mt=2
A very witty and entertaining episode with Andrew.
the intro was amazing
I too laugh at karl marx
Great entertainment! There should be more of this stuff
I have always loved this movie because it is a story of the greatest adventure that someone could actually experience. And it is done with no high tech special effects or an assist from the supernatural.
As for the economics: I worked out that the partners were carrying 5,250 ounces of gold dust which works out to 325 pounds of "sand" hidden in their packs which Goldhat thought nothing of. Now if I was Curtin, I would have thought about coming back in a few years during a wet season and sending all of that sand in amongst the ruins through a sluice.
Thanks, you're very good. I adored the intro! I would think your talents are more than enough to "pay the rent".
The Treasure of the Sierra Madre is a great movie. Bogart makes quite the maniacal coworker and poster child for workplace violence.
I would disagree with you regarding gold, mainly because of the historical purpose of gold. Around the world, and across all time, gold has been money. It's not actual "wealth" but it is the way the world has chosen to keep score of wealth for thousands of years.
Consider gold as universal money. It would be hard to spend US dollars in Russia or China, or to spend Chinese Yuan or Russian Rubles in America, but you could easily convert gold to any local currency in virtually any nation on earth.
History shows that governments across time have shown an eagerness to rob their citizens by diluting the value of the official printed or minted currency. Gold protects people from stupid government (governments can't print gold so it's useful for protecting your saving). Try storing your savings in Venezuelan Bolívars, it's like you can see the money vaporizing before your eyes.
The United States has had 2 failed printed currencies (both went to a value of zero). One currency was the "Continental" (during the revolution) and the other was the "GreenBack" (during the civil war). Today Continentals and Greenback are worthless.
The US dollar is failing too. Today's dollar has only 3 cents worth of buying power compared to the dollar of 100 years ago. But, if you had stored your "wealth" in gold you would not have lost any buying power.
Just a thought.
You brought up interesting ideas and facts. It is sobering to think about the dollar only being 3 cents compared to 100 years ago. Some of this has been offset by modern efficiency (things are cheaper to make). I didn't know much about Continentals or Greenbacks but from what I've read it seems that Greenback demand notes were not as a cut and dried a failure as the Continentals. The demand notes were made legal tender and then removed from circulation. But I don't really know a lot of details.
Extremely interesting, but gold only makes it more difficult for a government to debouch the currency. Men will not be free until their is a free market in money!
This has always bugged me a bit. It's clear that the price of any individual item at any moment in time is determined by the subjective value as determined by both the buyer and seller, I get that. I can't get over the fact that the subjective value is, in part, determined by the relative scarcity which in tern is at least partly determined by the amount of effort needed to produce it vs all other goods and services that could have been produced instead. I mean, while it's true that under certain rare circumstances water can be worth more than gold, that almost never happens in practice since water normally requires little effort to obtain. Clearly if water was as difficult to get at as gold it would typically cost as much or more than gold and if gold were as easy to produce as drinkable water it would be useless as money. Isn't, from the buyers point of view, the value of something related to the amount of effort he, personally, would require to go produce it himself?
I know I'm just restating a bunch of obvious points but it just seems that somehow looking at price as ONLY determined right here and now between the buyer and seller is ignoring all the actions and anticipations that led up to the transaction. I remember going through this when thinking about why supply is superior/prior to demand (and this seems like a mirror image of that issue) but I'm having trouble getting past it in this case. Can someone help me think about this in a less circular way?
You totally missed Huston's point- if anyone could just pick up a piece of gold off the ground it would have no value.
That opening skit... yes.
I secretly I 110 tonnes of gold in my basement, I intend to sell it all at once in order to destabilize the world economy, that way candy bars will cost a dollar again, instead of a dollar and ten cents
+Joseph Fox candy bar one dollar? I remember when they were 5 cents
Obama, we got you by the ballz now.
It's a not a movie about sophisticated people. They do not have to understand economic theories to know that if they find gold they will improve their circumstances which is exactly what could have happened if not for the very unlikely events that occurred. Dobbs' behavior changed -- in the book, it is mentioned in passing that he may have suffered a prior (like during ww1) head injury but in the film, his crazy behavior seemed to happened after he was almost killed in the mine cave-in -- prior to this he was if slightly grumpy a fairly reasonable and generous man. If he had not gone crazy or if the Indians had simply not insisted on Howard staying with them (this was a pretty contrived plot element) then the three of them would have probably managed to sell the gold and become financially secure although this was 1925 and I could see them all being ruined by the coming Great Depression -- Dobbs probably would have blown it in the stock market while Howard and Curtin could have just lost their businesses as prices plummeted. Howard probably, by staying with the Indians, ended up in the best shape and maybe Curtin if careful could have had a self-sustaining orchard (and maybe married the widow of guy killed by bandits). But Dobbs seems to me the kind of fellow who would no matter what continued finding himself in difficult circumstances -- he was ambitious but not practical -- his big idea of buying a dozen suits and all the dishes on a menu just so he could send them back to the kitchen is not the kind of thinking of someone who will hold onto his money for long.
+1 for economy and +1 for laughing at French, Russians in next episode please.
Andrew, I love these videos--market economics is one of my greatest interests. But I'm begging you: learn the proper use of the phrase "begging the question." It doesn't mean what apparently you think it does judging from the way you've been using.
Wow this was great all around 👏
"Begs the question?" You mean RAISES the question? trix.ws/ZkCe5 and trix.ws/mwYTv
Time isn't always a commodity. If you have enough money you spend 2 hours eating out. You could cook and eat at home in 1 hour.... or washing your car...or building a fence... Unless you propose that affluent people have less free time than lower income people.
The only true wealth we will ever have is our relationships with others. Please investigate a resource based economy.
LOL
Why are Americans reluctant to pronounce a flat A? Madre becomes Mardre and Adolph becomes Aydolph. Italian composer Matteo Carcassi becomes Mardio Carcarzi and yet , oddly vampires remain vampires (not varmpires) and Jack Kerouac remains Jack Kerouac (not Jark Kerouac). It seems inconsistent. Is there any pronunciation rule to explain this?
i really enjoy listening to you
You are doing a great job, please bring us more videos, especially more rap battles between Economists. They are AWESOME! E.g. Adam Smiths vs. Keynes #Economics4life
Thanks! We've got some exciting plans for 2015.
Robert Blake had a fun part of the movie.
Smartly done!
In the end they don't answer the question. Even with subjective value, why most people, the market etc subjectively value gold with a high price?
A suggestion: compare the economics of DESTINATION MOON and INTERSTELLAR!
We Dont Need No Stinkin Badges!
If the amount of labour requires is higher, then you'd need to pay more or higher wages to compensate the worker for the time spent working, right? Then wouldn't you therefore have to increase the price of your product, in order to earn back all the wages you paid and till make a profit?
Not necessarily, the demand for your product could be low because people choose to save and or spend money on other goods and services. You would have to lower your price which would mean either cutting the cost of labor or going bankrupt. The amount of labor required would be the same but to remain in business wages would be cut because their labor is not valuable enough in the subjective sense to validate the higher price.
The amount of money spent to create does not dictate the value others place on it. In addition, basic supply and demand dictate that raising the price will decrease the amount sold. If none are sold, because the price is above the amount people are willing to pay, then no money is made.
EconPop misses the point of LTV as you are saying LTV doesn't work because it provides that output intended. What LTV is measuring is production cost and makes the assumption that exchange value is determined by this production cost value.
So the fact the fact a solar powered submarine had low or demand does not change that if you want one you will have to pay the labour value required to build one thus LTV fulfills its roles as being a metric for planning. If LTV didn't give you a high value for your solar sub it would fail at its task of warning you of high production costs that you would incur producing it (or getting someone to produce it for you), pretty much every industry on planet Earth uses LTV in their plans to make a prediction of how a product will cost to produce.
+Psy Fox You wont have to pay the labor value. If I had useless submarine which I wouldn´t want and nobody would wanted I would sell it waaay below price. And I am not alone in this. Look at discount prices of unwated goods.
Elador1000
Someone would have to pay the labour cost, it is the reason even when the goverment buys something that does work like faulty military hardware they still incur its full costs. This is because it is economically impossibility to produce a commodity below its labour value
Owner of the company might have to pay the wages, but the price may be lower than the costs. It´s the incentive to stop producing said goods. There are tons of examples of this. It´s better to sell the commodity below it´s value than hord it for nothing. This way you´ll atleast reduce your lose.
Elador1000
But it is not the Labour Theory of Price but the Labour Theory of Value, meaning it is calculating the exchange value not the price. So yes it is calculating how much it costs to produce thus how much value it has in exchange.
ITS A WONDERFUL LIFE!!!!!!!!!!!!!!!!!!!!!!!
Soon!
It may just be a Christmas miracle!
You may make my life complete!!! Can I get a job with you when I graduate? I'm graduating in 2016 with a BS in both Finnace and Economics from SUNY Plattsburgh.
Machiones you can always submit an application: emergentorder.com/apply-now/
You can eat gold, there are deserts made with gold leaf.
You guys should do the movie Snowpiercer next!
Steve mcqueen movies
The Stone Roses brought me here
Gold road's sure a long road...
And gold watch for a rifle? ... agree ... I will keep the rifle!!!
You should upload that song. Or else I am going to do it :P
It’s rare but it’s the special properties and uses are what make it valuable. But if there was, God forbid, a famine... a really bad one... Then gold wouldn’t be very valuable compared with food and water. Still... I wouldn’t throw it out and I’d trade other sh$t to get food...
maybe he valued the six months lose and lose of his 200 dollars because it gave him happiness, happiness subjective.
"...parked next to the Spanish navy" LOLOLOLOLOLOLOLOLOLOLOL
The movie is definitely not about greed. Its about paranoia of greed!!!! U all got this movie so wrong & theres something that only i seem to ever notice cuz nobody ever talks about it & that is why the old man is the way he is & knowing exactly what the younger two guys are capable of but he still goes wit them anyways & always tries to teach them the smart thing rather than just be the snake of the bunch & steal they're gold & let them die there cuz they dont know any better or try to turn them against each other & thats because he knows its not all about greed like everyone thinks , its actually more about paranoia of the other mens greed hence why Bogart shoots his own friend in paranoia & why all three of them especially Bogart constantly thinks someone is going to steal his shit!!!! Hes not being greedy at all , he talks to himself alot in this film while hes going nuts but he never once says anything about stealing the other twos gold at any time in the entire movie not even when hes talking to himself after he shoots his friend , he only ever talks about them stealing his!!!! Not to mention he was a naturally careful guy & he did share his lottery ticket with his friend just so he could join them on the adventure when he didn't have to especially if he was a greedy person plus his friend didn't even care about going with them at that point!!!!! The film is all about Paranoia not greed , greed is a complete mirage in this desert film & that was the entire point of it!!!!
Badges?
Damn good movie.
You should do Harry Potter.
Are you still single Andrew? I'd love to make your value objective
Arrrg! Don't say "Begs the question" when you mean "Raises the question!"
Why would I pay someone good money to change my oil? That's only like 3 minutes of labor.
Hmmm... Why do you suppose anyone would inject leftist economics into a movie like this?
Oh yeah, here's why: John F. McManus: Blacklisted in Hollywood - The Hollywood Ten
My all time favorite movie, in spite of being based on a socialist book. My second favorite movie is THE BICYCLE THIEF, which was written by communists, so I'm obviously an art-above-politics type of guy!
Curtin's attitude was flawed? So the aquisition of goods and money is more important than a positive state of being? Take philosophy lessons from a business man and see where that gets you.
His attitude's not flawed, his assessment is. If he's fine with it, cool, but he is objectively out more than the cost of the equipment.
What a Truckload of Absurdity and......
White Noise!
🎌🎌🎌🎌🎌🎌🎌🎌🎌
20 a once 2020
Errr... Time doesn't have a subjective value unless you use that time for, well, labour... With the caveat that it is socially valuable labour.
If only someone had pointed that out. In 1848 or so. And their name was Marx.
Keep throwing those mud pies!
Do you get your knowledge from Wikipedia or are you just outright manipulative? Everyone who read about Marx' theory of value should know, that he put up a better defense, than what you made it seem like. He said explicitly that a commodity does not rise in value just because a lot of work went into it. He refered to the average amount of work that goes into a commodity and said that a commodity has to satisfy a need to have any value. If you have read it, you should try it again, there's more to it, than you might think.
Of course the price of a commodity changes subjectively and based on supply and demand, but you have to consider that value and price are two different things. As you should have learned, the price of a commodity revolves around a certain point, the equilibrium price. It is the objective core of the subjectively varying price and what Marx calls value(more or less).
Capitalist economists are not able to trace this value. The theory of marginal benefit is tautological ("its value is based on its value"). Marx, however, traces the value back to the quantum of work that went into the commodity and this make sense, if you go back to the origin of labor division. If you shall be convinced to work for others all day, in order for them to work for you, you want to get the same amount of goods for the same amount of work, otherwise you will just change your job. Now, of course, it is not so easy to instantly change jobs (tell that to Hayek) and some work is harder, less pleasant or requires a rare skill or knowledge which is affecting the value of commodities, but that does not disprove the theory; it just changes the equation.
You see today as well, how the production costs - more correct: labor - influences the value of a product. If the profit margin is lower in one branch of the economy, companies will wander into another branch until, in the long run, the same input, yields similar outputs. That does not happen instantly or perfectly and there are other factors influencing this process as well, so only rarely price and value match short term. But Marx' theory was not meant to predict prices in the short term; he wanted to illuminate the underlying processes. So disproving an abstract, long term thesis with a concrete, short-term situation is not really an intellectual achievement. Have a little dignity and stop fighting against straw men.
Communists couldn't even establish a base price for goods. Communism is all pie in the sky abstractions. Lets make a theory for that. Sounds great, looks good, and all the cool smart people know its really the stylish way to go (eyes rolling). But in reality it never could figure out what a pair of shoes should cost. Shortages or over production? Lets look at prices in a free market to figure out what something should cost. Shucks, that didn't work either. Additionally, you should look into how much labor costs actually add to the value of a good. I think you might be surprised how little the production of a good adds to the cost.
herbs4america
How much production adds to the value of goods depends on how much labour went into the good, so in mass production its pretty small, yes, but a hand made piece of furniture is going to be a lot more expensive than the wood that went in it.
Lastly, Marx' theory of value is based on Ricardo and does not really has much to do with Communism. It is true, whether communists could price a shoe or not. The theory is important because it defines exploitation objectively and not moralistic and generally helps to understand economic processes better. It might be used as foundation to make prices without the help of the market, but as you said, its not that easy.
Ixam13
I have to say Ixam13, your response floored me. You didn’t come back as a blowhard, and rounded out many of the points that are easily missed in a forum like this one. I'm so used to people pretending they know everything and do no wrong (cut and paste junkies) that I was shocked. Thank you for your manners sir, it is appreciated. It’s been a few years since I last read Marx. Let me add, your point about mass production is valid, but Marx was talking about the dehumanization of work due to mass production. However, I do think that Marx arguments were based on a moral feeling of worth and not purely objective. But then philosophy, economics and politics walk a fine line.
herbs4america
Well thank you. It is indeed rare to have a polite discussion in a comment section.
Marx was not against mass production, on the contrary, he viewed a high industrial standard as an absolute necessity for communism. The "Entfremdung", which I would rather translate with enstragement, happens not because of the productive forces itself, but because of the relations of production. People produce goods not for their actual purpose, but for profit. Moreover, most of the people do not have control over the goods they produce and therefore estrange themselves from their work. Its not important if their good actually contributes to society, it just has to satisfy the market (or the boss).
And of course Marx' intensive occupation with economics started from an idealistic, moralistic standpoint. Marx and Engels saw the suffering of the working class, but instead of dealing with the topic moralisticly, they wanted to analyze the objective roots of this suffering. To not just speculate about socialist utopias and how we could live, but to analyze why we are not living that way and how do we get there. For example, they wrote very little about communism itself.
Exploitation in a marxist sense is just that the surplus value is taken from those who created it. A worker can be exploited, but still have a pretty decent wage. Its not about suffering, but about who creates the value and has therefore a right to decide about what happens with it. It is especially used to refute theories, which say that every factor in the production of a good (capital, labour and land) is responsible for the surplus value and therefore gives capitalists the right to grab it.
Ixam13 I think part of the problem with the idea that an items value is centered around the production of it, is that it doesn't take into account the diminishing marginal returns of that product. For example: I will give up essentially everything I own in order to get water to drink to survive. However, after I get the amount of water I need to survive, the next units of water I need are not nearly as valuable.
you destroyed the french
AWESOME... NOTHING HAS INTRINSIC VALUE.
Karl-MARX The-Only-Person Thart-'Understands' ... STAGFLATION!!!??? >(*U^)< (Joke)
This guy seems like a Soyboy...
French Navy? Stupid cliches. Bye.
haha, French "navy"