Anorak News | The Guardian: Only 130 Years Out of Date

The Guardian: Only 130 Years Out of Date

by | 28th, July 2011

IT’S possible that there’s some sort of black hole in The Guardian, one which distorts time itself, so that their editorials sometimes seem to come from another century. This is most noticeable when they start to talk about economics. And yes, they’re at it again today:

Like it or not, real shoppers do not operate like the calculating consumer that economists conjecture; instead they value things subjectively.

That value is subjective we’ve known for 130 years, ever since the marginalist revolution. It’s at the core of the whole neo-classical project: that value is in the eye of the beholder, that it’s subjective, often even arbitrary. Just about everyone, from Milton Friedman through Paul Krugman to Galbraith and Keynes himself all agree on this point. Whether or not it’s in GCSE economics I’m not sure but it’s certainly taught in A levels in the subject.

The only people who aren’t up to speed on this are the Marxists because they want there to be some absolute measure of the value of something. As Marx himself said, that value is the value of the labour that’s gone into producing something. It’s from this that we get the thought that labour ought to get all the money, that they’re exploited by the capitalists if they don’t.

But if that Labour Theory of Value is wrong, which just about all economists agree it is, then this part of Marxist eonomics falls apart: as just about all economists agree.

But there we go, The Guardian editorial page, 130 years out of date. And we’re surprised are we?

Posted: 28th, July 2011 | In: Money Comment (1) | TrackBack | Permalink