4.4 – An Introduction to Axiology
Learning Objectives
By the end of this section, you will be able to:
- Describe how ontology, epistemology, and axiology are related
- Compare and contrast use value, exchange value and the labor theory of value
- Match the different theories of value to key contributors to the history of economic thought
- Apply Marx’s model of the working day, to describe the relationship between exploitation and surplus value
Axiology is the study of value theory. More specifically, Merriam-Webster defines it as “the study of the nature, types, and criteria of values and of value judgments, especially in ethics.” Axiology is not generally recognized as a primary concern of orthodox economists. This is largely due to a group of nineteenth-century economists arguing that they solved the problem of value by understanding it as a question about prices. Unfortunately, this foundational concept or the idea that price equals value remains generally unchallenged, not just in orthodox economics but popular culture as well. Therefore, accompanied by Albert Einstein, we continue along our path of investigating and challenging foundational concepts. We do so in this section by presenting two of the principal approaches to value theory in the history of political economy: the exchange theory of value and the labor theory of value. Again, we will see that the selection of our ontological foundation is deeply connected to the epistemological study of that reality and the “nature types, and criteria of values and value judgments” that structure the study of economics.
The final leg of our journey across the three meta-theoretical concepts that ground economics starts with a classic paradox. The ‘diamonds and water paradox’ introduces the exchange theory of value in many orthodox texts. This paradox and the calculus of marginal analysis help to define the exchange theory of value, as well as to situate it within the historical context of political economy. For many scholars, this “marginalist revolution” establishes neoclassical economics as the dominant school of thought and allows the discipline to drop “political” from its title and move forward as the “hard” natural science of economics.
For others, however, the exchange theory of value does not end the value debate. The “political” in political economy is foundational to heterodox economics, and the labor theory of value and the surplus approach generate alternatives to the price equals value narrative. From this critical perspective, we evaluate whether or not the underlying code or programming language of orthodox economics allows them to maintain their distance from the subject matter as dispassionate observers. If it does not, then are the issues raised in this critique simple bugs in the system that can be sorted out by building better models, collecting more data, or using updated mathematical techniques, or is the programming language itself “not fit for purpose?” If the latter is