The Empire of Value: A New Foundation for Economics

by André Orléan, M.B. DeBevoise (Translation)

An argument that conceiving of economic value as a social force makes it possible to develop a new and more powerful theory of market behavior. With the advent of the 2007-2008 financial crisis, the economics profession itself entered into a crisis of legitimacy from which it has yet to emerge. Despite the obviousness of their failures, however, economists continue to rely on the same methods and to proceed from the same underlying assumptions. André Orléan challenges the neoclassical paradigm in this book, with a new way of thinking about perhaps its most fundamental concept, economic value.

Orléan argues that value is not bound up with labor, or utility, or any other property that preexists market exchange. Economic value, he contends, is a social force whose vast sphere of influence, amounting to a kind of empire, extends to every aspect of economic life. Markets are based on the identification of value with money, and exchange value can only be regarded as a social institution. Financial markets, for example, instead of defining an extrinsic, objective value for securities, act as a mechanism for arriving at a reference price that will be accepted by all investors. What economists must therefore study, Orléan urges, is the hold that value has over individuals and how it shapes their perceptions and behavior.

Awarded the prestigious Prix Paul Ricoeur on its original publication in France in 2011, The Empire of Value has been substantially revised and enlarged for this edition, with an entirely new section discussing the financial crisis of 2007-2008.

Genres: Economics

350 pages, Hardcover

First published January 1, 2011

Reviews

[Andrew Marr · Rating 3 out of 5]

This was a tough, slow read for me. My knowing little about economics probably didn't make it easier. On the other hand, I read about stuff many economists take for granted (but Orlaean doesn't) with fresh eyes. I was amazed to learn that many economists try to get around money and more astounded that many economists try to sidestep the reality of human beings. Now wonder we get economic collapses. Orlaen brings in René Girard & Durkheim to explore economics more anthropologically. Girard's concept of mimetic desire is quite illuminating for how humans handle commodities, money & especially markets. Girard speaks of mimetic desire, imitating the desires of other people as basic to our humanity. If Girard is right, then mimetic desire would have a lot to do with economics. Orlaean demonstrates how social mimetic processes establish currency & also affect pricing of commodities and market shares. Where Girard explores how mimetic desire can lead to good, modelling caring relationships for example, but also, and more famously, where mimetic desire goes bad and leads society into violent meltdowns, Orlaean sees mimetic desire as merely a practical trait that has strong effects on the market. Orlaean's analysis of the crises of 2007-2008 show how a mimetic process swooped through the world and ruined fiances for the next few years. Unfortunately, Orlaean shows no interest in the ethical aspects of money and economy. He occasionally hints at greed possibly being relevant to the financial breakdown but he doesn't bring that in. If we were to apply Girard's thought to economy. ethical questions having to do with violence and sacrificing the more helpless people in society would emerge as important matters. Orlaean has taken a major step in connecting economic theory with actual human beings but other thinkers need to take these insights much further into the human dimensions.

[J · Rating 5 out of 5]

This will be viewed in the canon of books that changed economic theory towards more pragmatic axioms. The neoclassical paradigm, with the fallacious related concepts of substance value and rational choice theory, need to be disregarded. This books helps show why. The black-box causal mechanisms of social relationships are too complex for physics-like modeling, and as Orlean points out, they just create imaginary models for imaginary economies. Nothing makes less sense to me than the current financial valuation metrics--which Orlean does a good job of describing--built on this garbage.

[Sarah · Rating 5 out of 5]

Un livre limpide qui décortique les fondements classique et néoclassique de la théorie de la valeur de manière à mettre en lumière toutes les aberrations qui sous-tendent l’idéologie capitaliste. D’intéressantes conclusions peuvent en être déduites pour réfléchir aux politiques publiques. Une vision originale et nécessaire!

[Eric Pecile · Rating 4 out of 5]

A thorough definition of the concept of value within an economic framework. Tackles the metaphysics of market space and economic behaviour to provide economists with a more effective understanding of how their subject functions in order for them to make more effective predictions.