TY - CHAP

T1 - Economic (E)valuation

T2 - Household and Catallaxy

AU - Sayer, Andrew

PY - 2024/1/23

Y1 - 2024/1/23

N2 - 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.

AB - 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.

KW - Evaluation

KW - valuation

KW - economic rationality

KW - household

KW - catallaxy

M3 - Chapter

SN - 9781032271293

SP - 73

EP - 88

BT - Contemporary Contributions to Critiques of Political Economy

A2 - Giri, Ananta

PB - Routledge

CY - Abingdon

ER -