There is, however, another sense of price-value mismatch in the world of Robinson Crusoe economics - much of what passes for empirical economics is little more than value-laden theorising. Worse still, the value of human persons, communities and relationships takes a very secondary seat to the price of the 'factors of production' and the market-clearing solution based on implicit values that need to be challenged again and again. Economics needs to be cleaned up - this time on the basis that people really do matter.
Thursday, 12 March 2009
Values, Prices and Economics
Oscar Wilde once complained that 'economists know the price of everything but the value of nothing'. Well, the same could be said about current day markets and their over-pricing of risks (and under-pricing formerly). We are now in the era of dictatorship by the markets - let's bow down and offer sacrifices at the shrines of Moody's, Standard and Poor, IMF etc - because if you don't swallow the bitter cup of wage cuts, reductions in social welfare and cut-backs in frontline public services - you will get worse from the real and ultimate masters of economic fortune.