Tag: value

Roundtable: Has Economics Failed?

Tom Clark and Chris Giles, writing for the Financial Times, debate the big picture of the economics profession. A few other FT writers respond.

Here is the contribution from Diane Coyle, the Bennett Professor of Public Policy at the University of Cambridge:

The Discipline Suffers from its Lack of Diversity

The debate about the state of economics is a bit surreal, to an economist. Tom Clark says economics is “a profession in a defensive mood”. Only if it is defensive to point out that what some critics are describing bears scant resemblance to economics. I’d go so far as to say there is economics, which is what academics, consultants and many officials do; and something almost entirely different, “economics”, an ideological construct deployed by some politicians and polemicists. The critics are attacking “economics” and calling it economics (when they are not calling it neoliberalism).

This is deeply frustrating. Partly because it would be marvellous if critics could accept that areas of the discipline such as market design, behavioural economics, industrial organisation, auction theory, data and techniques for policy evaluation, institutional economics, construction of major historical data sets et cetera are not just the few useful contributions identifiable in “a far-fetched vision of omnipresent and flawless markets”. On the contrary, areas such as these form the bulk of the work economists do.

But it is frustrating as well because there are certainly valid criticisms of economics. My top concern is its social composition. It is a largely male, white and posh profession — not a foundation for good social science, whose questions, hypotheses and data need to be rooted in society. The male dominance reflects both culture and the unusually narrow criteria for advancement in the academic profession, where only five journals really count. Other people would highlight further weaknesses, but then economics is a living science, looking at a constantly changing society, and there is a lot to learn.

And here is a snippet from the contribution of Mariana Mazzucato, Professor of Innovation and Public Value at UCL:

[…] the assumption that price reflects value means that we end up constantly correcting gross domestic product for the priceless activities it ignores (caring services at home, environmental damage, quality of life). And similarly, those activities which do have a price, but are just moving things around rather than creating value, get included (eg. most of the financial sector).

My suggestion is that before we add happiness indicators, we first take out rents. This would cause the GDP of some countries to drop drastically and for new questions to be asked about the “direction” of growth, not only its rate.


Excerpt: William Petty, The Political Anatomy of Ireland

And this brings me to the most important Consideration in Political Oeconomies, viz. how to make a Par and Equation between Lands and Labour, so as to express the Value of any thing by either || alone. To which purpose, suppose two Acres of Pasture-land inclosed, and put thereinto a wean’d Calf, which I suppose in twelve Months will become 1 C. heavier in eatable Flesh; then 1 C. weight of such Flesh, which suppose fifty days Food, and the Interest of the Value of the Calf, is the value or years Rent of the Land. But if a mans labour ——– for a year can make the said Land to yield more than sixty days Food of the same, or of any other kind, then that overplus of days food is the Wages of the Man ; both being expressed by the number of days food. That some Men will eat more than others, is not material, since by a days food we understand 1/100 part of what 100 of all Sorts and Sizes will eat, so as to Live, Labour, and Generate. And that a days food of one sort, may require more labour to produce, than another sort, is not material, since we understand the easiest-gotten food of the respective Countries of the World. […] the days food an an adult Man, at a Medium, and not the days labour, is the common measure of Value, and seems to be as regular and constant as the value of fine Silver. […] [182] Wherefore I valued an Irish Cabbin at the number of days food, which the Maker spent in building of it.

By the same way we must make a Par and Equation between Art and Simple Labour […]

William Petty, The Political Anatomy of Ireland, in The Economic Writings of Sir William Petty vol. I, ed. Charles Henry Hull (Routledge/Thoemmes 1997)

Scratchpad: Labor & Value

Thomas Hobbes, Leviathan (1651):

[…] As for the Plenty of Matter, it is a thing Limited by Nature, to those commodities, which from (the two breasts of our common Mother) Land, and Sea, God usually either freely giveth, or for labour selleth to mankind […]

William Petty, Treatise of Taxes and Contribution (1662):

[…] All things ought to be valued by two natural Denominations, which is Land and Labour; that is, we ought to say, a Ship or garment is worth such a measure of Land, with such another measure of Labour; foras-much as both Ships and Garments were the creatures of Lands and mens Labours there upon; This being true, we should be glad to finde out a natural Par between Land and Labour, so as we might express the value by either of them alone as well or better then by both, and as we reduce pence into pounds […]

William Petty, Treatise of Taxes and Contribution (1662):

[…] Labour is the Father and active principle of Wealth, as Lands are the Mother […]

William Petty, Verbum Sapienti (1665):

[…] It seems reasonable, that what we call the Wealth, Stock, or Provision of the Nation, being the effect of the former or past labour, should not be conceived to differ from efficiencies in being, but should be rated alike, and contribute alike to the common necessities […]

William Petty, Political Anatomy of Ireland (1672):

[…] this brings me to the most important Consideration in Political Oeconomies, viz. how to make a Par and Equation between Lands and Labour, so as to express the Value of any thing by either || alone […]

William Petty, Political Anatomy of Ireland (1672):

[…] the days food an an adult Man, at a Medium, and not the days labour, is the common measure of Value, and seems to be as regular and constant as the value of fine Silver […]

William Petty, Political Anatomy of Ireland (1672):

[…] I valued an Irish Cabbin at the number of days food, which the Maker spent in building of it […]

William Petty, Political Anatomy of Ireland (1672):

[…] By the same way we must make a Par and Equation between Art and Simple Labour […]

John Locke, Two Treatises of Government (1690):

[…] I think it will be but a very modest Computation to say, that of the Products of the Earth useful to the Life of Man 9/10 are the effects of Labour: nay, if we will rightly estimate things as they come to our use, and cast up the several Expences about them, what in them is purely owing to Nature, and what to labour, we shall find, that in most of them 99/100 are wholly to be put on the account of labour. […]

Richard Cantillon, Essai sur la nature du commerce en général  (1755):

[…] The Land is the Source or Matter from whence all Wealth is produced. The Labour of man is the Form which produces it: and Wealth in itself is nothing but the Maintenance, Conveniencies, and Superfluities of Life. […]

Adam Smith, The Wealth of Nations (1776):

[…] That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. […]

Adam Smith, The Wealth of Nations (1776):

[…] a commodity which is itself continually varying in its own value, can never be an accurate measure of the value of other commodities. Equal quantities of labour, at all times and places, may be said to be of equal value to the labourer […]

Adam Smith, The Wealth of Nations (1776):

[…] Wages, profit, and rent, are the three original sources of all revenue, as well as of all exchangeable value […]

Adam Smith, The Wealth of Nations (1776):

[…] The revenue of an individual may be spent, either in things which are consumed immediately, and in which one day’s expence can neither alleviate nor support that of another; or it may be spent on things more durable, which can therefore be accumulated, and in which every day’s expence may, as he chuses, either alleviate or support and heighten the effect of that of the following day […]

Karl Marx, Capital:

[…] The value of labour-power is determined, as in the case of every other commodity, by the labour-time necessary for the production, and consequently also the reproduction, of this special article. So far as it has value, it represents no more than a definite quantity of the average labour of society incorporated in it […]

Karl Marx, Capital:

[…] In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour-power a historical and moral element. Nevertheless, in a given country, at a given period, the average quantity of the means of subsistence necessary for the labourer is practically known […]

Karl Marx, Capital:

[…] In order to be able to extract value from the consumption of a commodity, our friend, Moneybags, must he so lucky as to find, within the sphere of circulation, in the market, a commodity, whose use-value possesses the peculiar property of being a source of value, whose actual consumption, The labour theory of value 170 therefore, is itself an embodiment of labour, and, consequently, a creation of value. The possessor of money does find on the market such a special commodity in capacity for labour or labour-power […]

Interview: Fabian Muniesa

A brief interview with Fabian Muniesa about the event “Capitalizing on Performativity: Performing on Capitalization” at the Centre de Sociologie de l’Innovation in Paris. Here’s a snippet:

Signs are considered, on the one hand, through their performative dimension, and, on the other hand, as the object of capitalistic investment. Most of the talks could actually be interpreted in that perspective. Many dealt with the managerial configuration of organizations, which relies heavily on rhetoric crafts and which also contributes to the transformation of such organizations into financial assets. The pedagogy of finance, we also saw, often requires an intimate transformation of the self through participatory, experiential means, and translates accordingly into the intimate experience of “become capital” oneself. The performative becomes “value creation” in a very financial sense of the term.