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"Does transportation cost too much?"
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[quote]QUOTE: <i>Originally posted by Hugh Jampton</i> <br /><br />I still disagree. <br />You're using a consumer definition of value, which is not the same as that of a shipper/manufacturer (which is what this thread is about). So, by your premis that a thing has no value until it's in the hands of the consumer, then if I put the widget on a train and it is destroyed in a derailment then the insurance company won't pay out because the widget has no value? <br />[/quote] <br /> <br />I sure do not see how your second statement follows from the first. Any item only has value if it is of some use to someone, and part of the manufacturing process is delivering the product to that right someone. Any product, no matter how good, is worthless to someone who has no use for it. Likewise if some product costs $10 to produce but is only worth $2 to the consumer then the product is only worth $2. If that item would happen to be in a derailment and is a total loss then the insurance would pay $2, because that is all the manufacturer could expect to get on the market. <br /> <br />If, as you say, transportation adds no value, then why is a can of Coke over $2 in Jamaca? Why is nearly everything so expensive in Alaska? It is because people are willing to pay the higher prices for the VALUE of having the product available locally. <br /> <br />Yes I understand that the Wikipedia article states that according to economic theory transportation adds no value. But that is the opinion of the person who wrote the article fow Wikipedia. Economics has many conflicting theories, so any "hard and fast rule" must be taken with more than a grain of salt. <br /> <br />My question back to you is, if transportation adds no value why does the US Government include domestic transportation in the GDP?
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