When she finally does trade it for something else the result is an increase in perceived value to both parties.
An increase in perceived value
after potentially a significant drop in the perceived value of the purse due to the voluntary trade of third parties. The net result could still be a decrease in perceived value of the purse, which you seem to brush over quickly.
Anyway, your argument seems to be that it doesn't matter that her perception of the value of the purse dropped because nothing was physically done to the purse (which is the extent of her property rights).
The whole idea that voluntary trade always increases the wealth of the society is very questionable.
You define "wealth" as the "the cumulative perceived value of all parties." I don't think you mean to say it this way, because "cumulative" implies summation to me which is counter to the principles you say you value in the same post:
- Austrian economist's "founding principles forbid the use of mathematical operations on value in almost all circumstances."
- "You cannot compare value judgements among multiple people."
- "A price (exchange rate) is only valid the instant it happened and only for the parties involved."
To make this more clear I am afraid I am going to have to introduce variable and equations
. Actually, just for you, I will abuse the hell out of mathematical notation. Plenty of set theory but I am afraid no calculus in this post
.
A natural interpretation of the vague English statement "cumulative perceived value of all parties" at time T would be W(T), where:
- You ask party H at time T to put a price P(H, T) on all the goods/services of society of which they are a property rights owner (or otherwise control).
- W(T) = ∑ P(H, T) ∀H ∈ {humans on the planet}.
This can't be what you mean since this is going against the bullet point principles above that you said you value in the post.
So, the other interpretation could be that any voluntary trade between parties H1 and H2 occurring at time T* satisfied the following statement: Ǝε > 0, ∀H ∈ {humans on the planet} P(H, T* + ε) ≥ P(H, T* - ε). I think with this interpretation it
might be fair to say "voluntary trade always increases the wealth of the society" (then again there are all kinds of irrational people) but that is only because ε can be made really small so that the information of the trade doesn't have enough time to propagate to other parties. On the other hand, the statement would not necessarily be true if we changed the interpretation to something more reasonable like the following:
- E(T1, T2) = {all trades occurring between time T1 and time T2}.
- H(T1, T2) = {all parties involved in the trades that are members of the set E(T1, T2)}.
- Given any set E(T1, T2), ¬(ƎH* ∈ {humans on the planet} such that H* ∉ H(T1, T2) ∧ P(H*, T2) < P(H*, T1)) ∧ (Ǝε > 0, ∀E* ∈ E(T1, T2), (H*,T*) ∈ {(H,T)|(H ∈ {humans on the planet}) ∧ (T1 ≤ T ≤ T2) ∧ (H is a party involved in trade E* that occurred at time T)} P(H, T* + ε) ≥ P(H, T* - ε)).
The counterexample to the interpretation above is your girlfriend's purse example. But again, it seems that you don't really care whether or not "voluntary trade always increases the wealth of the society" is true as long as it is true that "voluntary trade never harms a third party or their property." Of course then the question is what is "harm" anyway? But I think the purse example slightly clarifies the definition since even though her perceived value of the purse dropped because of the actions of third parties, you do not consider it "harm" because the actions of the third party did not in any way physically damage the purse.
Finally, however you define "wealth of society" and whatever your thoughts may be on the validity of the statement "voluntary trade always increases the wealth of the society," you don't seem to be addressing how physical harm can eventually come to a party in the future due to the voluntary trades by third parties. I am thinking of tragedy of the commons situations here where each short-sighted rational actor does voluntary trades that benefit them at the moment but build up into a situation that makes everyone (but especially those who did not profit from the short-sighted actions in the present) far worse in the future (due to loss of natural resources for example). And these cases can lead to what I consider physical harm (e.g. pollution of the atmosphere with toxic chemicals, or deaths from starvation due to the depletion of natural food sources from say overfishing or soil degradation), even if that physical harm is indirect and not as straightforward as an aggressor murdering someone directly. Privatizing everything so that there are no commons is neither feasible from a technical and logistical standpoint, nor does it even solve the problem because the rational actor may conclude that the negative effects won't happen until after he is long dead and no longer cares about the state of the planet (let's also assume he has no children or young people who he loves and empathizes with). Is this not a situation in which we need some kind of objective value (a consensus value made up for each person's subjective value weighted in some manner) of the commons in order to make economic and political decisions about how to use the resources? I think trying to determine how resources should be allocated in matters concerned with the commons strictly through voluntary trade (in a IMO misguided attempt to respect idealistic principles) can lead to actions that nearly everyone agrees is worse than resource allocations determined through consensus processes that may violate principles of non-coercion and strictly voluntary trade. You may call this "ends justify the means" thinking, but at the end of the day aren't we all trying to make the world a better (better is of course subjective and you need to accept that people will have different weights in their definition of better for aspects of society such as health of the populace, sustainability of the society, the degree of coercion imposed, etc.) place to live in?