Chapter 52: Prices
Paul Downward Introduction This chapter explores the links between various accounts of prices and their normative character. Classical, neoclassical and heterodox analyses of prices are examined. Three key features of the discussion should be noted at the outset. First, unlike classical and neoclassical economics, the normative content of heterodox analysis is unclear, commensurate with its emergent nature. For heterodox analysis, only suggested lines of enquiry exist.1 In this regard, this chapter notes some issues for future deliberation rather than providing an account of prices and ethics per se. Second, the discussion draws freely upon a variety of ethical perspectives, including virtue ethics, deontological ethics and consequentialist ethics (see, for example, Norman 1983; Vardy and Grosch 1999). This is because elements of these ethical theories are maintained as having greater or lesser relevance to understanding and evaluating particular theories. Moreover, the various traditions of thought each contain different, if implicit, conceptions of ‘just’ or ‘fair’ prices.2 Finally, drawing upon Downward (1999, 2000, 2004) and a critical-realist methodological framework, the chapter maintains a distinction in heterodox analysis between theories of price and theories of pricing. The different methodological characteristics implied by this distinction have implications for ethical analysis. Normative diagnosis: relationships between fact and value Classical economics The classical economic analysis of prices was derived from a focus on calibrating the value and distribution of production in terms of social classes. ‘Use value’ thus resided in the objective conditions of production, and was measured by prices of production. Market prices, reflecting conditions...
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