What is something “worth” in the marketplace? Who gets to decide that? If you ask someone steeped in classical economic theory, they will tell you that something is worth exactly what someone else is willing to pay for it. They will say that the “market” decides, through the laws of supply and demand. And they will say that all of these individual market transactions come together to make up “the economy.”
It should be clear to most of us by now, but classical economic theory doesn’t actually explain how the economy works, at least not in a way that is meaningful to those who actually live in it.
Read Full Article »