IDSB01H3 Lecture Notes - Lecture 11: Pareto Efficiency, Normative Science, Washington Consensus

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Attempt to revive and rescue the classical argument for capitalist provisioning. The innovations of neo-classical economics (microeconomics: utilitarian value theory (draws on bentham"s utility) the value of a good is determined by the pleasure that it provides. Individuals want to maximize this utility/pleasure and minimize pain. Opposed to a labour theory of value what all commodities have in common isn"t the labour but the fact that they all bring us pleasure. We can"t measure pleasure so this is a subjective theory of value. Since it"s not focused on labour, it undermines marxian theory: mathematical rigour . Uses calculus for modelling: objective science . Whereas classical political economics emerges from philosophy, neo- classical economists weren"t concerned with questions of good/bad but with measurement; efficient/non-efficient. But by choosing efficiency as the measurement of what an economy should be a value judge is made : atomist. Modelling itself again physics atom is the smallest part.

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