Featured Post

I = S - M

The modern way of thinking about economics has been I = M - S Where I is the I as in me, M is what is 'mine' and S is what ...

3/29/11

Economics is not and can not be value-free. In the act of using concepts such as supply and demand economists implicitly make value judgements. They are mostly unaware of that. But it is true.

For instance when we say demand. It is not a thing. It's a concept. This concept requires a peculiar world-view. We must suspend disbelief and accept a view of the world where we can quantify intentions and aggregate them. That requires a value judgement. We believe our action increases understanding and that that is a good thing. But that is in itself a belief. Further, the idea that intentions can be conceptualized requires a big leap of faith. That they can then be aggregated has been shown to be a fallacy by economists themselves.

Gandhian economics embraces value judgements. We start with them and use them at every stage of our analysis. Truth, nonviolence, and dignity value are our foundations. They are our means and our ends.

No comments: