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.
ISBN-13: 9780262549585
Media Type: Paperback
Publisher: MIT Press
Publication Date: 10-31-2023
Pages: 360
Product Dimensions: 9.00h x 6.00w x 0.81d
Series: Philosophical Psychopathology
André Orléan is Senior Researcher in the CNRS Center for Economics at the École Normale Supérieure, Paris, and Director of Studies at the École des Hautes Études en Sciences Sociales.
What People are Saying About This
Richard Swedberg
This is a highly innovative and provocative book that will surely become part of the new economics that is so desperately needed today. What will especially appeal to many readers is the ingenious way in which the author mixes economics and sociology in his analysis.
James K. Galbraith
In lucid, accessible language, André Orléan resurrects and explores the vital (but neglected) problem of value, grappling along the way with some fundamental defects of conventional theory. Through his mimetic hypothesis, the role of money emerges in the central role that both classical political economy and neoclassical economics denied to it. The Empire of Value is a bold argument, and a deep rejection of the justification for reliance on markets,except as a device for obtaining consent.
Bruce Carruthers
The Empire of Value is an engaging, ambitious,erudite, and innovative reflection on how markets work (or not). The scholarship is impressive and refreshingly different from many other 'big picture' books prompted by the global financial crisis of 2007-2008. This is a very smart book that forced me to consider new avenues of analysis and alternative interpretations.
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Table of Contents
A Note on the Translation vii
Tables and Figures ix
Introduction 1
Part I Critique of Political Economy
1 Substance Value 9
The Substance Hypothesis • Barter and the Exclusion of Money
• The Undervaluing of Exchange • Order from Disorder • The
Fetishism of the Commodity • A Singular Science
2 Market Objectivity 37
The Utilitarian Relationship to Things and the Problem of
General Equilibrium • Walrasian Adjustment and Mediation by
Price • The Mimetic Hypothesis • Asymmetric Information,
Quality, and Conventions • Uncertainty and Money • Market
Objectivity and Ideal-Type Models
3 Scarcity and Status 85
Utility versus Prestige • Scarcity Reconsidered • Veblen ’ s
Theory of Emulation • The Mimetic Model of Competition
• A Return to Value
Part II The Institution of Value
4 Money 107
Money versus Value • The Conceptual Origins of Money
• Currency Crises • The Objectivity of Value • The Quantity
Theory of Money • Economics and the Social Sciences
5 A New Approach to Value 141
Money and Confidence • Common Emotion • Durkheim ’ s
Theory of Value • The Role of Religion • The Liberal
Conception of Money • Monetary Miracles
Part III Market Finance
6 Financial Valuation 175
The Probabilistic Postulate and the Intrinsic Value of Shares
• The Efficiency of Financial Markets • Radical Uncertainty and the Irreducible Subjectivity of Individual Valuations
7 Liquidity and Speculation 197
Enterprise and Speculation • Liquidity as a Social Institution
• Self-referentiality and Conventional Belief • The Inefficiency of Financial Markets • Excessive Volatility, Speculative Bubbles,
and Blindness to Disaster • Liquidity and Convention
Part IV Self-referential Finance and the Subprime Crisis
8 Euphoria: 2003 to 2007 241
The Real-Estate Bubble • The Credit Bubble • The Mechanisms of Euphoria • Securitization and the Role of Economists • The
Underestimation of Credit Risk • Bubble or No Bubble? • The
Market Weighs In
9 The Crisis: 2007 to 2008 285
The Panic of August 2007 • Deleveraging • The Role of
Financial Liquidity
Conclusion 311
References 325
Index 343
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