An Alternative Sociological Perspective on Economic Value: Price Formation as a Social Process

Abstract

This paper identifies some deficiencies in the theory of value as found in traditional economics, specifically the fallacy of absolute value and its spurious resolution that treats prices as a priori parameters rather than as variables to be explained. One is a fallacy of omission, the other of commission, which together comprise the epistemological paradox of the modern neoclassical theory of value. This paper advances a different, sociological approach to economic value or market prices as a possible corrective to this paradox. Such an approach has origins in sociological economics or economic sociology, the main premise of which is that social influences in the economy affect the formation of value or price. This paper therefore explores the seldom examined social underpinnings of price formation and of market processes generally.