The Economy in Context: A Value-Based Approach

A more comprehensive picture, or imaginary in Charles Taylor’s term, puts the spheres of market and organizations in a broader perspective. It calls for new concepts – like shared and common goods or practices – and the willingness to contribute. We see that culture, in the sense of sense-making practices, matters a great deal, just as Deirdre McCloskey and Virgil Storr, among others, argue. By focusing on values, we see that people valorize their values not just by way of markets, but more so by way of different, non-market spheres. The article reflects a value-based approach to economics and the economy. Picture yourself in a restaurant with a group of colleagues. What do you see? Do you see yourself and the others engaged in a conversation while enjoying the food and drinks? Or are you focused on the choices you and your colleagues make and the payment of the bill at the end? In the conversation of economists the choices and the payment seem all that matter. Economic talk is about transactions in market settings. Economists make you see choosing the restaurant, choosing some items of the menu and paying for them. In economic talk that is called “consumption.” You and your colleagues are the buyers. Those who run the restaurant are the suppliers. The price is presumed to be the critical variable influencing your decision to buy and the decision of the restaurant to supply. Behind the supply curve the restaurant people are pictured to produce the meal in a more or less productive and cost-effective way. The point is the income they earn thanks to your payments, after deduction of the costs. That is what economists call added value. It makes you realize that your consumption is good for the income of others who can use that to consume in their turn. After all, “[c]‌onsumption is the sole end and purpose of production” as Adam Smith already noted in 1776 (Book iv, Chapter 8, 49). This is one perspective. Another perspective makes you focus on the purpose of your shared dinner at a restaurant. Then you may ask yourself: what is important for me and my colleagues? This questions calls for what you value. You most likely will mention the conversation, the socializing, the exchange of stories, anecdotes and ideas. Who knows, the conversation allows you to test some new ideas you have for your research. All that makes the conversation valuable apart from affirming the collegiality and friendship of you all. The food is a good excuse. True to academics, appreciation of its quality is implicit. And because the department picks up the bill, payment is not an issue. The earnings of the people of the restaurant, and their efforts, do not really matter, either. In this alternative perspective the visit to the restaurant is about realizing values.