AM24 Theory of Value

Inverted Class: Students required to watch lectures L10, L11 linked below before coming to class.

This lecture is given by Adeel and it covers the debate on the theory of value with a special focus on the ‘labor theory of value’. The lecture starts with an investigation into the theories and ideologies that existed before the advent of Capitalism with explanation on why there was a need to change them and how it was achieved. We, then move to the second part of the lecture with a ‘practical game’, analyzing and illustrating that neoclassical results are not ‘normally’ observed in real life situations. We move on with the brief review of evolution of ‘social norms’ and market values and conclude with an insight into how ‘value’ is rightly determined.

Sample Question for Final:

1. Explain the neoclassical theory of value -- What determines prices (=value) of goods, according to neoclassical?

2. DIFFERENTIATE the neoclassical theory from the classical labor theory of value.

3. In class, we argued that neither theory is correct. Instead, we proposed a social norm theory of value. Explain what this is, and provide some EMPIRICAL EVIDENCE in favor of this theory, which also provides evidence AGAINSt the neoclassic S&D theory.

For the next week, 26th and 28th December, you will be responsible for covering the next three lectures: L10, L11 and L12 listed and linked below:

L10: Theory of Value:

https://sites.google.com/site/economicsislamicapproach/l10-value

L11: Theory of Value (continued)

https://sites.google.com/site/economicsislamicapproach/ll-11

The above two lectures should be covered on the weekend, before class on Tuesday 26th December.