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"Normally screws are so cheap and small and simple you think of them as unimportant. But now, as your Quality awareness becomes stronger, you realize that this one, individual, particular screw is neither cheap nor small nor unimportant. Right now this screw is worth exactly the selling price of the whole motorcycle, because the motorcycle is actually valueless until you get the screw out. With this reevaluation of the screw comes a willingness to expand your knowledge of it."



I read this in high school and years later in university learned economists named this concept 'marginal utility.'

It's an important concept to understand in many aspects of life. In social and economic policy, it's important to remember resources are allocated per marginal utility, not by what they're worth. I.E. water is worth more to me than music, but I spend more money on music than water, and the music industry makes more than public water utilities. Seems obvious when stated like that, but it's often forgotten I find.


It's an important concept but it's not marginal utility. Marginal utility is the degree to which adding one more of something will exceed the cost of doing so.

To stick with the motorcycle analogy, suppose I am designing a motorcycle as a manufacturer and I find that it takes 6 bolts to securely fix the engine to the frame. If I use fewer, accidents are very likely to occur, I will get sued, sales will collapse. As it is, accidents will still occur once a year - but that's the industry average (let's say) so I can pay out compensation for that one accident without seeing any real impact on sales. (I have magic litigation insurance so my liability costs are totally predictable for this example.)

Suppose each bolt costs me $10. If I add 8 bolts, the risk of failure drops to zero. I calculate the cost of accident involving my bike, divide it by the number of bikes I expect to sell, and I find it's about $25 per bike; installing those two extra bolts creates $5 of marginal utility or 2.50 each so I go ahead and do it.

Should I not go ahead and add 1 more bolts? No, because it will cost an additional $10 for no noticeable increase in safety, so the marginal utility is -$10.


"Marginal utility is the degree to which adding one more of something will exceed the cost of doing so."

That's a meaningless statement, because you can't compare/subtract marginal utility and marginal cost. The latter is measured in some currency (e.g. USD) but the former is not.

You can compare the marginal utility of X with the marginal utility of the cost of X, but then what you're really doing is comparing the marginal utility of X with the marginal utility of Y, where Y is the highest-utility alternative use for the marginal cost of X.

Anyway, back to my actual point: the comment to which you responded was talking about marginal utility. I'll attempt to elaborate on the example (music vs. water). Water is more valuable than music. That sounds right intuitively, but what do we mean? What we mean is that if we had to give up 100% of something, we'd choose to give up 100% of music instead of 100% of water. But all that says is that there's some finite amount of water that has higher marginal utility than all the music in the world. And that's right. If I need a minimum of 300ml of water to live per day, then I'd give anything for that 300ml. Maybe I'd give a lot for the an extra 300ml per day also, but it's not as important. And by the time I'm drinking 5 litres per day, I'd probably rather spend money on CDs than buy more water, as the marginal utility is zero.


Marginal utility is from the perspective of a consumer not a producer, so cost doesn't come into it. The analogy that stuck with me was eating bars of chocolate from the initial one which tastes delicious, and thus has high MU, until the one where you puke, by which point the MU has become negative. Cost is pretty much constant throughout.


> to which adding one more of something will exceed the cost of doing so.

No. That's marginal cost.


I think you've got to expand on that. Just "No, it's [other thing]" kills the conversation.


Marginal utility is a consumption function. By itself, it says nothing about cost or what a producer will do,

> In economics, utility is the satisfaction or benefit derived by consuming a product; thus the marginal utility of a good or service is the change in the utility from an increase in the consumption of that good or service.

https://en.wikipedia.org/wiki/Marginal_utility

By contrast, marginal cost is about change in a producer's cost function with changes in quantity,

> marginal cost is the change in the opportunity cost that arises when the quantity produced is incremented by one unit, that is, it is the cost of producing one more unit of a good.

https://en.wikipedia.org/wiki/Marginal_cost

The commenter starts out using the word "cost" along with the rest of his example which is elaborated upon to describe the MC=MR profit maximizing function.


Or, in continuous terms, marginal X is simply the first derivative of X with respect to some other variable.


He's not talking about marginal utility. At least not unless he's talking about an extremely unusual utility function. Maybe my Econ background is getting in the way but...

Marginal utility, would be the increasing/decreasing value at the margins, for each additional screw.

Here I believe the point is in process engineering that more or less, something big may be disguised as something small. That you must thoroughly know your process to understand the problem(s) at hand.

It seems more analogous to "the straw that broke the camels back."


It is about marginal utility. You and others here are constraining yourself to thinking about the concept by thinking about it only as a utility function for one type of product or service. After all, that is how it is taught. You can also think about the marginal utility of one glass of water, or one screw in a more complex utility function (as is always the case in life) than for just one widget, as you would say a factory manufacturing screws until cost > utility. After all, it's nothing more than the utility you gain, on the margin (holding all else constant), of that one additional screw or glass of water. In the author's example, he is discussing this exact phenomenon. The utility at the margin of that one additional screw.


> the marginal utility of one glass of water, or one screw in a more complex utility function (as is always the case in life) than for just one widget,

I was taught the concept using the water example in undergradudate, and find the analogy is spot on. Other comments are considering more complicated marginal effects or the intersection/equilibrium of multiple marginal effects and confusing the point.


I politely disagree. This example feels like a piece wise function which isn't a utility function (or at least not one I have ever seen and I've seen a lot). Having utility decrease from its maximum to zero, or negative, at the next value is odd to say the least.


>Having utility decrease from its maximum to zero, or negative, at the next value is odd to say the least

I didn't claim anything such as this and I'm having trouble understanding what you are responding to in my post.

A utility function is just a value of utility received at different quantities and costs. They are just basic models for helping to simplify our understanding the world. There's no need to begin comparing expertise with utility functions. The author is talking about the utility he receives at the margin of one additional widget in his decision making process, and what that this type of scenario (when a commonly cheap item can, in our decision making process, can have a high marginal utility--ie quantity is only 1 and 1 is necessary for a finished product) means to us in our human experience.


From the quote that started all this:

"Right now this screw is worth exactly the selling price of the whole motorcycle ..."

This is not marginal utility as somehow the value of this screw is equal to the entire amount of the motorcycle. There is no marginal utility to be had because decreasing it or increasing it has no effect. This would not be a continuous function. You could talk about the marginal utility of one having a motorcycle or no motorcycle. It's not related to the increase in screws.

Additionally, to say that expertise in a subject is not needed is perplexing to me. So much so I literally can't begin to understand how you'd surmise such a claim honestly.

How much economics did you take? I ask because it sounds like your understanding is that from a class or two, and not the bulk of your education. I think if it was we would not be having this discussion or you'd somehow prove it instead of reiterating the same points.


I'm sorry I did not explain the idea well enough for it to be understood.

I don't see it as productive to respond on the internet to the posturing and credentialing about who has seen more utility functions or taken more econ classes, as you wrote above.

I can assure you that Robert Pirsig garners utility at different costs and quantities in the scenario he described. That is all that a utility function is: a function of utility at varying quantities. This is an elementary topic and there's nothing more to be argued here. I'm sorry that explaining it again rubbed you the wrong way and encouraged you to write a condescending response towards me.


Ivestopedia has a different definition - "Marginal utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service. Marginal utility is an important economic concept because economists use it to determine how much of an item a consumer will buy."

http://www.investopedia.com/terms/m/marginalutility.asp


Personally I think that's just supply and demand. Water is plentiful and the costs of access are low (at least when there's a tap nearby). So even though it's extremely important it's not too limited a resource...now. In the future, that will change for many people in the world. There are predictions of wars about water [1], but there won't be many wars about music. Demand increasing for water, harder-to-increase supply.

[1] http://bigthink.com/re-envision-toyota-blog/will-the-next-wa...


> Right now this screw is worth exactly the selling price of the whole motorcycle, because the motorcycle is actually valueless until you get the screw out.

If I read the situation correctly, the motorcycle with this screw is certainly not valueless. It can be turned into a working motorcycle far more easily than most other things can be turned into a working motorcycle. If it would take a competent technician an hour to remove the screw, then the screw shouldn't affect the selling price of the motorcycle by more than a couple of hundred dollars.

It's important to remember that small, trivial-seeming things can actually be important, which I think is what he's pointing at. But it's also important to remember that a thing's potential has value beyond its current abilities.


If you're stuck at the side of a road, miles from anywhere, without a cellphone, a broken motorcycle has a value that's very close to zero. It might have a great deal of value in a workshop or a breaker's yard, but at that precise point in spacetime it's just a funny-shaped rock.


I bet his mind was blown the first time he got a flat. "Right now this tire is worth more than the selling price of the whole motorcycle." Or ran out of fuel. "Right now that Citgo sign is worth more than the selling price of the whole motorcycle." It sounds profound, except it's not.


I would submit that, contained within the discussion of the screw is a description of the Buddhist concept of Pratītyasamutpāda [1], or in English: dependent origination.

That is to say, without the screw, there is no motorcycle; without the motorcycle, there is no screw. In this concept, things cannot exist without being connected, dependent, and intertwined with one another. There is nothing that exists independently.

[1] https://en.wikipedia.org/wiki/Prat%C4%ABtyasamutp%C4%81da


Or possibly you missed the point? This doesn't seem to give him the benefit of any doubt.

I won't defend the book vigorously, but your reading of this part seems both superficial and easily dismissed with a moments thought. Pirsig is obviously driving at something deeper, even if you don't think he completely gets there.

It's a book about thinking and changing how you do it, after all. You can't expect to get much out of something like that if you can't or won't examine your own cognitive bias as you do.


The common denominator is circumstances creates value.


Way to evaluate a tiny quotation out of context.


Have you never felt frustrated looking for a pen and not finding one when you need one. The frustration increases when you do find a few pens and none work. the price of the pen is determined by the demand and supply but it's value at the moment can't be calculated.


you're right, it's not that profound, which should give us that much more respect for Pirsig for pointing it out because most people completely take for granted that context is the kernel of value.


My kingdom for a horse


I would say, surely the author realises this and has decided to go for 'valueless' for dramatic effect. As a fellow somewhat pedant I totally agree, it's not intellectually consistent and would probably change me into a more disagreeable mode whilst reading it. That said I wonder how many flawed but worthwhile things would not come to be if such consistency was universally applied...


I'm not sure if that is true that he is using 'valueless' for dramatic effect.

One of the major themes of the book is defining "quality" and "value".


Get stranded on the side of the road (something riders are almost pathologically averse to, with good reason) and your opinion will change dramatically.


[flagged]


I understand both you and I (probably, I'm sorry if I am wrong in my assumption and you actually work in mental health) have strong experiences that, in the big scheme of things, are just anecdotic evidence on this subject. With that in mind, I read the book (a few times), and have someone diagnosed with borderline disorder in the family, and don't find many coincidence points between Robert/Phaedrus as described there, and my experiences.

Perhaps a bit with Chris, though, and maybe that is what you meant.

Back to the 'whole selling point' I think he was being overly dramatic, it's a novel after all. I think his point comes across better when he goes through the value traps part of the book, and interpret his point the following way:

Sometimes you are working on some machine (physical, like his motorcycle, or abstract, like software), and you get stuck on a problem due to a seemingly very meaningless part of said machine. I think his 'whole selling point' message is: when this happens, you need to reassess the value you give this part, as, until you get to resolve what it is causing it to get you stuck, its value to you is pretty much the value of the whole machine. Like how a crashing bug means that specific software is useless, in the specific use case that triggers the bug, until that is fixed. If it's some weird edge case, the software may be perfectly usable for most people, but if you are one of the few affected by it, the most likely few lines of code causing the defect render the whole thing useless, they're the selling point of the software to you individually.

Now, obviously, speaking of the actual physical motorcycle, it's not that he can't sell it without resolving the problem that particular screw is causing him. There are probably skilled mechanics with the right training and tools for which the screw would cause little to no problem. But to him: he can't ride it until that is resolved, so the screw is as important as the entire machine until he gets that resolved.

I faced this specific problem just a couple of days ago and remembering the book (which I read years ago) helped me step away from the problem and come back to it with a fresh angle. But the reality was the same: it's not that I would have lost my physical entity (a window, in this case). Surely, I could have called a professional carpenter to help me with it. But to me, without getting someone else involved, that little piece (it was also a screw, a rusty one) was worth the whole window.


I see it this way: a motorcycle has only one inherent value - the ability to take you from point A to B more efficiently.

If it can't fulfill this core function without the screw, it is valueless.

Of course, you can pawn the motorcycle for thousands of dollars, but for that, you would have to have a marketplace and buyers. You can also turn some parts into tools and probably repurpose the tyres into something useful.

But again, to do that, you would have to have the knowhow and the necessary tools and time for repurposing.

If you were in an isolated environment with no other people around and no additional tools, a motorcycle that doesn't function is as good as "valueless".


I want to couch this in the statement that I understand the sentiment: Seemingly unimportant or trivial things _do_ still have value, usually in their small contribution to the whole.

With that said, the motorcycle is clearly not value-less without the screw the same way it is not value-less without a rider.

The instant you dismount the motorcycle it is no longer physically capable of performing its function. Yet it of course still has value.


> With that said, the motorcycle is clearly not value-less without the screw the same way it is not value-less without a rider.

I don't think your comparison makes sense. A motorcycle is not broken without a rider; it is not being used to move from point A to point B, but it is capable of being used to move from point A to point B.

A broken motorcycle is not being used to move from point A to point B, however it is not capable of being used for that purpose. The broken motorcycle is clearly at a lower state than a functional motorcycle.

Perhaps a comparison that works would be (a broken motorcycle + a rider) is as worthless as (a working motorcycle + a broken/ignorant rider).


Two non-functional motorcycles: 1 that will become functional with the addition of a missing screw and 1 that will become functional with the addition of a missing rider.

Neither can be used to move from point A to point B without the addition of their missing component.

If we assume I have the appropriate skills/training to successfully operate the motorcycle that is missing a rider can we not just as easily assume that I have the appropriate knowledge/materials to add the missing screw?

E: The point I'm trying to make is that it is the same scenario. We could argue over which assumption is more practical (how hard is to to find and install the screw vs ride a motorcycle) but that is a separate point.

The screw seems most important when it is the 'weak link'.

But the same is still true of all other components.


I note that a motorcycle's selling price is not part of its inherent value, and Pirsig was the one who brought that up. I fully agree that there's a certain type of value that a motorcycle lacks when it doesn't work; but then that screw isn't worth "exactly the selling price" of the motorcycle, it's worth the type of value that the motorcycle doesn't currently have.


Yes it's like the difference between kinetic energy and potential energy. A rock at rest at the edge of a cliff has no kinetic energy, but a lot of potential energy.

I guess Pirsig was making a point about value and not about potential value, which is leading to a larger point. In the moment, value is all you have. Potential value is a future value that requires time to realize.

I have two separate reactions to your suggestion that it's important to remember potential value, the Zen reaction and the Writer's reaction.

Even though Pirsig wasn't going for Buddhism, it's fairly consistent with Zen thinking to make observations about the momentary values of things. My Zen point is that the purpose of meditation and much of Buddhist practice is to see only value and to eliminate potential. When you learn about how to meditate, you learn how to stop your mind from thinking about the future and concentrate completely on the here and now. Remembering something's potential value is antithetical to this way of thinking. Not because it's untrue, but because it's un-now.

My writer's reaction is that while it will always be important to remember things other than the point the author was making. Is adding your point to the author's words helping us to understand his? If Pirsig reminded us about potential value in this sentence, would it improve this particular narrative? Does it open a path that gets to his larger point either more efficiently or more effectively? It might, that might be part of Pirsig's thesis. Or it might be taking a narrative path that doesn't lead to the same place.

It's important to see not just the value of the quote itself - the truth or completeness of an individual passage - but to also remember the potential value of the words as being the destination of the story -- where they lead and where it ends is as important as where it was at any given moment.


yeah, you really can't just pull a quote out of this book and analyze it in stand-alone. I just re-read the book, and that sentence really had nothing to do with the economics of labor and motorcycle maintenance. OP's quote was more a reminder about a specific chapter of importance for people who had already read the book.


I had exactly this paragraph running through my mind as I was taking a cross threaded bottom bracket out of a cheap bike. The crank extractor had munged the threads of the axle, and the bb cups were frozen tight to the frame. So this crappy loose bottom bracket was exactly as valuable as the bike. And I was out of tools and ideas.

Thankfully, I had an option at he didn't have, which was punt to the bike shop and pay them 12 bucks to get the thing out and chase the threads.


Every carb I've rebuilt has benefited from those words.


Indeed. For extra goodness, buy a few packs of stainless allen head screws to replace the cadnium plated steel ones that always strip. They always strip, because they are not phillips, but JIS screws. The dot on the head gives it away.


Funny. I learned that about 8 months ago. Wondering if we watched the same YouTube video.


Solid gold. I just commented elsewhere about the gumption trap chapter, but the whole chapter this passage comes from is similarly insightful -- maybe more so.


My kingdom for a horse?


It is a common error in modern capitalist thinking that the unit of value is price. That is fundamentally wrong.


Strange, I find that it's anti-capitalists that make that error. The few who do not in my experience , if from anywhere, come from the Austrian economics camp.




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