Economic Value and Costs are Subjective
AbstractQuestion 1 begins by discussing an area of subjectivism where most economists agree: Is economic value subjective? This area differentiates most modern economists from classical economists and many non-economists. Question 2 probes an area where many but not all economists agree: Are costs subjective? This area differentiates many Austrian and certain neoclassical economists from orthodox neoclassical economists following Alfred Marshall’s tradition. Questions 3, 4, 5, and 6 discuss areas where even fewer still economists agree: Can we survey people’s subjective preferences? Can we measure an individual’s utility? Can we compare utility between individuals? Can we aggregate the utility of many people? For these questions one can find Austrian and neoclassical economists on both sides of the debate. Questions 7, 8, 9, and 10 look at alternative approaches to making welfare comparisons between nations that do not purport to depend on measuring subjective utility, such as looking at per capita income, migration patterns, society-wide cost-benefit analysis with dollars as the unit of measurement, and a demonstrated preference Pareto rule. Where one stands on these issues depends on how far one is willing to extend the logic of economic subjectivism. And where one stands on questions of economic subjectivism has an important influence on how one analyzes the world and what policies one recommends.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 25384.
Date of creation: 2010
Date of revision:
welfare economics; economic efficiency; economic subjectivism;
Find related papers by JEL classification:
- D60 - Microeconomics - - Welfare Economics - - - General
- B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
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- NEP-EVO-2010-10-02 (Evolutionary Economics)
- NEP-HPE-2010-10-02 (History & Philosophy of Economics)
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- William Barnett II & Walter E. Block, 2013. "Subjective preferences and alternative costs," The Journal of Philosophical Economics, Bucharest Academy of Economic Studies, The Journal of Philosophical Economics, Bucharest Academy of Economic Studies, The Journal of Philosophical Economics, vol. 6(2), May.
- Solomon Stein & Virgil Storr, 2013. "The difficulty of applying the economics of time and ignorance," The Review of Austrian Economics, Springer, Springer, vol. 26(1), pages 27-37, March.
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