Technically speaking, depending on where is the moon, the locations of stars and on our mood.. we could define the price of an apple? Well, is kind of more complex than that to estimate the value of a good, a service.
The most urgent issue in the global political economy today would be to rethink the concept of value!
The concept of value evolved with time, first we can recall the theory of labour. Which is a notion that allows us to attribute a certain value to a good or a service depending on the labour expended in it’s production. It was the theory used by classical political economists like Adam Smith, Karl Marx and Ricardo. Kees Van der Pijl (2009)
“It is not from the benevolence (kindness) of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Smith (1776)
Smith though that the market was a self regulating place where rational self-interested individuals meet to trade. And this trade was suppose to be a perfect exchange, where you get as much as you receive. It was in vogue, in those times, to think that one of natural human features was to seek for gain as once they fervently though the earth was flat (and the centrer of the universe).
This theory has a lot of weaknesses and strengths. Here we are mostly going to criticise it. Susan (1998: 11) explicitly underlines the numerous quantity of irrational factors concerning human relations as main factor of why social sciences, like global political economy, cannot aspire to predict. But then is human relations are irrational to which extent is the human been rational? Non is you ask me.
Then there is our friend, Karl Marx that enters the game!
He criticises Smith theory of market. For example wages are not the reflection of an equal trade. He explains the existence of a contradiction in the exchange of wages gain by labour power. Labour power in exchange of its production receives less use value ( wages) than it produces. Marx successfully elucidate how the market is not actually a place of perfect trade, because there is a profit! How could be a profit if it was equal trade? To picture profit we can imagine a big moustached bourgeois, lets call him Billy that has an industry. Billy will look to give wages as low as possible to increase his part of gain, his profit. He will probably stablish wages that will only serve to reproduce the labour power, even though the labour power is the one generating more value! Because value comes from
Actually there is not A single way to assign a price to things (yes every thing has its price).
The labour theory of value determined the value of a good or a service depending on the amount of effort spent in the process of making the good or service. We can oppose the labour theory of value to the theory of value based on the subjectivity of the good toward the individual.
The value of marginal utility implies a loss or a gain from its consumption. So if you are lost in a desert, and you are really thirsty you would want and give a big amount to have a glass of water. But this desire is satisfiable, so if Billy appears he would settle a high price for the glass of water that you really want. You would probably, looking forward to survive, buy, a glass of water that is worth a lot. But then, once you are satiated, the tenth glass of water won’t be as worthy as the first one.
As we said at the beginning of this article the concept evolves through ages. First there was trade, then money appears in a long processus where economy invaded all features of life and what would be next?
Here is an article righted by Edgar Cahn, Julie Ozanne and Lucie Ozanne on Wednesday 16 December 2015 10.45 GMT that relates of how time became a currency, which can be a reflection on how much value, time has nowadays.
Cahn, E.; Ozanne, J.; Ozanne,L. (2015) ‘Pay it forward: the New Zealand town where your time is a currency’ The Guardian. available at : http://www.theguardian.com/sustainable-business/2015/dec/16/new-zealand-time-banking-currency-community-earthquake?CMP=Share_iOSApp_Other
[Wednesday 16 December 2015 10.45 GMT]
Robert O’Brien, Marc Williams (2013) Global Political Economy: Evolution and Dynamics (Palgrave Macmillan 4th edition), p43.
Kees Van der Pijl (2009) ‘From Classical to Global Political Economy: A Survey of Global Political Economy’ (Version 2.1 Centre for Global Political Economy, University of Sussex) pp. 1 – 29
Strange, S. (1998) States and markets. (2nd edn. London: Continuum International Publishing Group). p11