It’s a bit easier to see the value of trade when there is some schlepping involved. Buying fish off the boat and selling it in the grocery store provides a useful service for the people shopping at the grocery store, since they don’t have to go to the docks. Reversing that would be nonsensical and destroy value; nobody needs more fish at the dock.

Just because it’s the same commodity doesn’t mean it’s worth the same amount at every time and place. Transportation and storage are technologies that add value by taking surpluses and moving them where they are needed more. This is still true when the cost of transport is very cheap.

Amazon is clearly doing something very useful with its warehouses and delivery. This is all about getting stuff to people whenever they want it.

How much this is really worth is unclear. You can’t take prices at face value. A monopoly could charge higher prices than other companies would charge for the same service in a competitive industry, and the difference is how much of the value goes to the company versus the buyer. But doing calculations using prices is often the best we can do.

>they've not created 0.02 apples worth of value, they've revealed that the whole thing was a waste of time

If you select an example with almost identically substitutable goods, no wonder you miss the point. Lets use oranges and sausages in the example instead. Now we're trading meat for fruit. What's the value to you of not dying of scurvy or protein deficiency?

Identifying imbalances in supply and demand, and working out how to resolve them creates huge value, otherwise all trade would be pointless.

That's where investors and business owners come in. They identify an imbalance in supply and demand between the labour of employees and the needs of customers. Sure the employees could do that themselves, and that's fine. It's not as if it's illegal, good luck to them. Power to the people. But the point is somebody has to do it and it absolutely creates value.

Do you know how much those potatoes are worth to the farmer who starts with dirt, water, sunshine and diesel and grows them if the supply chains and infrastructure aren't there to get them to consumers? Zero. We saw this with the pandemic when the normal supply chains were disrupted and farmers literally ended up plowing their potatoes back into the fields because there was suddenly no way to sell them all. In fact, technically it's negative - the fuel and time to dispose of them costs something. (Of course, all the left-wing activists blamed some capitalist conspiracy for this, as though the potatoes would magically fly from field to plate if we did away with capitalism.) The core of the modern economy is specialization - instead of everyone growing their own food, a much smaller number of people grow food for everyone, freeing up a bunch of time for other things beyond just basic sustenance - and the actual multipliers involved are pretty huge.

The money made by holding Amazon is value created, not value extracted. In 2000, Bezos, early employees, and investors could have decided to cash out by issuing dividends or buying back their own shares with Amazon's profits. Instead, they chose to reinvest that profit into Amazon in the form of new fulfillment centers and new workers. This gave Bezos even more potential profit, but again he chose to reinvest it in the company. This compounded for two decades, so now Amazon is a trillion dollar company. Without someone holding the stock, Amazon would not have grown to the extent that it had. Even if Bezos sold his shares to someone else, that other person needs to decide to reinvest Amazon's potential profits back in the business.

> If Alice values potatoes at 1.01 apples and Bob values apples at 1.01 potatoes, and they trade, maybe they've created 0.01 apples worth of value but they certainly have not created two, they started with two and ended with approximately two. If they change their mind and trade back, they've not created 0.02 apples worth of value, they've revealed that the whole thing was a waste of time.

Selling used goods often leads to valuations like this because human preferences change over time. Consider a used bookstore where people buy books they haven't read before, sell them back when they are done, and then buy some of them yet again much later to reread. The same physical items can trade hands multiple times and keep creating value.

> No, it's the farmer who starts with dirt, water, sunshine and diesel and grows the apples and potatoes who is creating value. "Efficiency of resource allocation" are a lot of big words that do little more than justify the speaker diverting a little of the revenue stream to themselves.

Isn't the farmer just efficiently allocating the solar system's resources? If not apples and potatoes, grass and trees would grow.

If the farmer produces value by directing 1KW/m^2 in a certain way then why can't Jeff Bezos create value by directing a company in a certain way?

>If Alice values potatoes at 1.01 apples and Bob values apples at 1.01 potatoes, and they trade, maybe they've created 0.01 apples worth of value but they certainly have not created two, they started with two and ended with approximately two.

I believe this to be incorrect. For instance, let's say that Alice runs a hamburger stand, and wants potatoes to sell alongside her burgers. Conversely, perhaps Bob makes apple pies which he then sells.

In a situation like this, they both would value (the verb) the other food more than the one they had, which would cause them to enact the trade - they are increasing their wealth by doing so. (This leads to a whole additional conversation about wealth, but I'm trying to keep it short here.)

The reason they would value it more is because they could create more value from the other's food. Bob can sell an apple pie for perhaps 10 bucks, of which most is profit. He cannot do anything with a potato, so the value of a potato is significantly less. Likewise, Alice might be able to sell one potato's worth of french fries for $5, generating a significant profit, and thereby creating value.

"The whole point is that no human, not even Jeff Bezos, can generate 200 billion dollars worth of value by working"

This is untrue and unlikely.

Invent a star trek type transporter. I bet you could sell your work for 200 billion in cash or 1 trillion in fedex stocks.

You are never going to create 200 trillion value working for Jeff so he pays you 200 billion. Amazon is setup so the value create goes to Jeff and other shareholders. If you are lucky you get 100th of the value you are part of creating. (Yearly profits + yearly valuation increases) / total employees / 1000 is your pay if you are lucky