Nope, Money Ain’t It

gold moneyIt is funny, really, how so many can be so fundamentally in agreement about the worthlessness of a science based on a widespread and complete misunderstanding of what it is about. Who hasn’t heard that economics is all about money? Yet, of course, it isn’t. If economics is about anything, it is about the effects and implications of value. Or, more accurately, the actions that are taken by individuals aiming to achieve something they deem of comparatively higher value. It is important to recognize that

…value is distinct from money and can be studied completely without involving money. In fact, it can often be easier to completely exclude money and instead talk about wants, preferences, or even “utility” to make it clear what is analyzed. And value is a subjective appreciation of something, which necessarily has a tacit component and therefore cannot fully be communicated to others. We can use all sorts of proxies or estimates, but they will never correctly “measure” the value as it is seen or felt by the individual him- or herself. This is not simply because people change their minds and preferences all the time, but because value is fundamentally immeasurable – there is no value unit that can be used to accurately measure the satisfaction felt by the individual achieving it.

Read more in my EconReason post It’s Not About the Money.

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