Value and Exchange

Some anti-Brexit pundits tried to frame the Brexit debate as one of savvy economics-minded people against economic illiterates. These people missed the point.

Economics is not intent upon pronouncing value judgments. It aims at a cognition of the consequences of certain modes of acting.

There is productive consumption and there is non-productive consumption. In the Keynesian mind, it's not necessary to produce anything, so long as people spend and consume endlessly, even to the point of destroying real wealth.

Shortcomings in the government's handling of monetary matters, of credit expansion, and the disastrous consequences of lowering the rate of interest gave birth to the ideas which finally generated the slogan "stabilization."

Values of goods are not static things that can be used for central planning. Values apply only to a particular transaction at a particular place and at a given time by human beings.

It is possible to determine in terms of money prices the sum of the income or the wealth of a number of people. But it is nonsensical to reckon national income or national wealth.

Judgments of value do not measure: they arrange, they grade. If he relies only on subjective valuation, even isolated man cannot arrive at an economic decision based on more or less exact computations in cases where the solution is not immediately evident. To aid his calculations he must assume substitution relations between commodities. That's where exchange value and prices come in.

Contrary to the popular way of thinking, setting in motion a consumption unbacked by production through monetary pumping will only stifle economic growth.

When a farmer leaves some unharvested crops in the field, they are not "wasted." Real waste would be found in efforts to use up every last physical resource, no matter how costly those efforts might be.

The idea that people are driven by fear of losses more than they are by the potential for gain has attained a sort of dogmatic adherence among behavioral economists. But there's a problem: the theory isn't true.