Thursday, January 10, 2019

"We must break with the dominant economic theory" - en.live-feeds.com




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Tribune. A liter of diesel and a liter of Coca-Cola today have almost the same price, but do they have the same economic value? After the initial astonishment of the question, and knowing that the economic and human consequences of a shortage of oil are not the same as those of a shortage of Coca-Cola, most of the people questioned thus answer quite spontaneously that a liter of diesel does not have the same economic value as a liter of Coke. On the other hand, for the dominant economic thought, which teaches that the economic value of goods and services is given by their price, the liter of diesel and the liter of Coke have the same economic value.


This theoretical assertion is based on several beliefs. The first is to believe that the economic value of a good or a service can be identified at its only exchange value (its price), thus erasing the aspects of utility and value of use. The revolt of "yellow vests" strongly testifies that a liter of diesel does not have the same economic value for each of us: for example, it has more value for a person paid to the smic and who has not no other means of transport than his car than for a person with the same income who can use public transport.


The second belief is to consider ourselves all Homo economicusthat is to say, as agents seeking to satisfy their needs individually by having all the information at their disposal to make rational choices.


An increasingly interdependent world


In an increasingly interdependent world, we can no longer think of the economic value of an individual and of a single good or service in isolation, especially when it is a good 'energy. As the institutionalist economists point out, what is decisive is not that the individual has needs, but that men, socially connected, have needs. It must be remembered that oil, a non-renewable energy resource producing greenhouse gases, has for decades structured our production and organization of the division of labor at the international level, and that it has also structured our ways to consume, to lodge, to move, and more generally to organize our territories. For decades, the price of oil on the international market has never translated the structuring and growing place it took in the economies of developed countries, it never allowed to take into account its societal economic value.



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