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The Value of Everything

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The Value of Everything

Making and Taking in the Global Economy

Public Affairs,

15 min read
10 take-aways
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Market economics focuses on the price of everything but neglects real economic value.

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Eighteenth-century philosopher Adam Smith, the father of market economics, wrote about how different economic and business activities contribute to countries’ overall well-being. But modern-day neoclassical economics has largely sidelined this scrutiny to focus on market price as the only measure of value, according to professor Mariana Mazzucato. In this perceptive work, she details how the dichotomy between price and value leaves society at the mercy of “value extractors” and places the social good on a back burner. Her thought-provoking writing will engage readers concerned about the path of economies in contemporary times.

Summary

How Economics Once Prioritized Value

Writer Oscar Wilde’s quip that a cynic is one who “knows the price of everything and the value of nothing” lands an effective blow on some aspects of modern economics. But the field was not always as morally detached as it appears today. Once known as “political economy” – before cold-hearted equations and supply and demand curves surfaced – economics was part of a broader study of the functioning of society as a whole.

Philosopher Adam Smith, widely credited with first explaining the merits of free markets, devoted a large part of his writings to examining ethical, philosophical and political issues. One reason Smith’s texts are so influential is that they illustrate how economics is “intimately part of studying society” and not just the technical discipline it is today.

Besides Smith, many of the early economic thinkers, including political theorist Karl Marx and classical economist David Ricardo, assumed radically different concepts of “value” as the basis of their work. They understood that, in economics, foundations have to include subjective judgments about the economic worth of different activities...

About the Author

Mariana Mazzucato is an economics professor at University College London. The author of The Entrepreneurial State, she was named one of the “three most important thinkers about innovation” by The New Republic.

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