Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.

 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate


On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.


RSS 2.0

Origins of the general theory of value

By Peter Gilchrist - posted Wednesday, 23 June 2010

How we see things is a product of what we are looking for and what we are looking for is a product of what we learnt to look for.

Usually in economics we are looking for some measure of goods made available and services provided over a period of time in a particular area. It is usually an annual, national measure. We then look for growth in what is measured over the same period.

This conceptual framework has persisted since the subject had its origins in post-war reconstruction when it closely reflected the desperate needs for all products. Students of Piaget will see its development as an example of genetic epistemology with the development of economies going hand in hand with development of the understanding of how they function.


There is no doubting the economic post-war miracle has been accompanied by an increasing understanding of how economies can be influenced to produce the desired results. From John Maynard Keynes came the acceptance of a role of government in manipulating total demand to a level of full employment. Both fiscal and monetary policies were to be used. Later economists have successfully argued the case to deregulate markets in order to expand innovative economic activities.

However it seems that economic theory is no longer reflecting economic realities.

Over time the role of markets has come to dominate economic theory so much that the subject could have been renamed the Market Theory of Value.

Today, however, there is increasing pressure to incorporate ecological, social and cultural values into those market-dominated theories of economics.

There is some urgency in the task because the gap between economic theory and economic, social and ecological reality is such that the current wisdom on economic problems often states the problem as if it were the solution.

Three examples are:

  • we need economic growth to survive;
  • markets are the fundamental source of value; and
  • global markets must be limitless.

This article explores these problems and in doing so the concept of a General Theory of Economics is introduced.

But first a further comment on economic epistemology. Fundamental to economic epistemology are statements of purpose and field. In this area two statements have dominated the subject like catechisms. One is that the economic problem is to “satisfy unlimited wants with limited resources” and the second is that “value is competitive market price”.

  1. Pages:
  2. Page 1
  3. 2
  4. All

Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

Share this:
reddit this reddit thisbookmark with Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Peter Gilchrist graduated BA(hons) from Tasmania in 1972. He taught matriculation economics between 1968-1985. Peter has been interviewed from time to time on ABC and is an occasional guest speaker at Adelaide University and SA Economic Teachers Association. he is the founder of the Society of Lapsed Economists. He wrote Economic Realism for its launch in 1994 and The General Theory of Value which was submitted to the 2020 Summit (Submission 8018). Peter is editor of SA Golfer and an enthusiastic member of both Birds SA and Birds Australia. He is an accomplished, thought provoking speaker and a writer of fables!

Other articles by this Author

All articles by Peter Gilchrist

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment Comments
Print Printable version
Subscribe Subscribe
Email Email a friend

About Us Search Discuss Feedback Legals Privacy