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Economic (E)valuation: Household and Catallaxy

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Published
Publication date23/01/2024
Host publicationContemporary Contributions to Critiques of Political Economy: Mapping Alternative Planetary Futures
EditorsAnanta Giri
Place of PublicationAbingdon
PublisherRoutledge
Pages73-88
Number of pages14
ISBN (electronic)9781032650920
ISBN (print)9781032271293
<mark>Original language</mark>English

Abstract

The article adopts a moral economic approach to assess different forms of economic evaluation, and the different kinds of criteria, rationality and judgement used. In particular it compares evaluation involving use-value measures and multiple criteria with ‘valuation’ involving a single cardinal measure such as price. It is argued that while prices enable complex modern economies to be coordinated, they are seriously inadequate as indicators of economic value. The argument is developed via a comparison of a self-sufficient household economy or commune with a ‘catallaxy’ or economy with an advanced division of labour coordinated by markets, such as capitalism. In the household, its unity and internal transparency is such that economic evaluation can be based on assessment of several different kinds of criteria regarding products, work, social relations and environmental impacts. In a catallaxy, as Hayek and others argued, this transparency is absent: the deep division of labour implies a division of knowledge which cannot be overcome by a single agent as was hoped in attempts at comprehensive central state planning under state socialism. However, while coordination via market prices has significant advantages it allows important information relevant to economic evaluation to be ignored. I argue that the household case holds important lessons regarding the kinds of economic evaluation and regulation that are necessary for an environmentally sustainable economy which is socially just and supports well-being.