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Source link: http://archive.mises.org/4445/the-new-marxism/

The New Marxism

December 16, 2005 by

Or: “We’ll keep the green flag flying!”.

As this excerpt from a rather uncritical article by CFO.com reveals, we are being asked to deify not so much the Labour Theory of Value, as the Gaia Theory of Value, so as to prevent all hardened capitalists from driving dear old Mother Earth down to a subsistence wage:-

Indeed, it’s hard to glimpse how blasphemous the concept seemed to economic traditionalists. Emergy lectures “used to send economists screaming from the room,” quips Mark Brown, an associate professor of environmental-engineering sciences at the University of Florida who considers Odum his mentor. “Emergy questioned their core beliefs,” asserts Brown in explaining why so many economists were bothered by the concept.

The uneasiness had philosophical roots. Emergy analysis relies on a donor system of valuation, rather than the traditionally accepted receiver system. Donor systems assign value based on how much energy, time, and material have been invested in a product or service, while a receiver system determines value by assessing what buyers are willing to pay for a product or service.

Receiver systems work well in a classic supply-and-demand marketplace, where price sets value. But when more comprehensive factors, such as the depletion and remediation of natural resources, are considered, a donor system like emergy is the better yardstick, contends Brown.

{ 6 comments }

Ken Cherven December 16, 2005 at 10:10 am

Here we go again. Is there no end to the ignorance about how free markets work, and how they always work more efficiently than any sort of intervention? Professor Brown is merely the latest to parade his ignorance. No rational consumer is willing to pay a price based on the inputs (energy, time, material) that Professor Brown obviously holds near and dear, except where those inputs provide value to said consumer.

The future buyer of my house will scarcely care about how many hours or dollars I spent on a new roof, refinishing floors, painting, etc. He will only care that the finsihed result is pleasing to him, and will hold to a minimum any future expenditures out of his pocket. If I choose to use a rare Italian marble in my sun porch, the buyer will only pay me for the value the marble adds to the house, not some premium based on the scarcity of the marble.

What Professor Brown and so many others fail to recognize is that the market makes its own adjustments for scarcity. Energy, time, and material are correctly valued by the free market; as the owner of a historic home, I will pay a premium for the time and energy of the plasterer or plumber who specialize in old houses, precisely because they provide a service that I value highly. This is based not on their time, effort, or materials, but on how the finished product provides benefits to me.

In short, Emergy is a sham, nothing but an old Marxist retread, as Sean Corrigan notes.

Yancey Ward December 16, 2005 at 10:11 am

I know nothing about emergy calculations, but it looks to me that the idea is being used/corrupted in order to try to demonstrate to people that their poverty would be so much more rich than what they think of wealth today. Just my impression of the issue.

Michael A Clem December 16, 2005 at 12:28 pm

The quoted section is certainly at odds with economics as we understand it, but it also seems to be out of place in the article, as well. Given the explanation of emergy and the examples used, there’s no obvious or inevitable conflict between an environmental metric and the marketplace–the question is how they use the results of that metric.
If we were talking about environmental trespass on private property, emergy might be quite useful in protecting property rights. But obviously, if it’s used to justify government interference in business affairs, there’s a problem.
There could be flaws in the metric of emergy, I suppose, but the article doesn’t give enough info to determine that.

Dalton April 12, 2011 at 8:49 pm

jbuo9N Very true! Makes a change to see someone spell it out like that. :)

Yancey Ward December 16, 2005 at 12:33 pm

Michael A. Clem,

That was almost precisely my impression of the article.

Chris December 18, 2005 at 12:06 pm

“Receiver systems work well in a classic supply-and-demand marketplace, where price sets value.”

I thought the values of many individuals trading set prices… I’m new at this though. :)

-Chris

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