Understanding the Value of Value

About this episode

Phil Dobbie and Steve Keen explore the definition of value in economic theory, contrasting classical and neoclassical approaches.

In this episode of the Debunking Economics podcast, Phil Dobbie and Steve Keen explore the core of economic theory: the definition of value. They contrast the classical cost of production theory with the neoclassical focus on subjective utility, arguing that while neoclassical models often fail mathematical rigor, the cost-plus approach reflects how real firms operate. The pair discusses the critical role of innovation and market segmentation, noting that while competition typically forces margins back toward production costs over time, elite brands like Ferrari can maintain high markups by intentionally limiting supply and occupying unique segments where value is tied to exclusivity. Ultimately, they conclude that while short-term utility and innovation drive initial pricing, the long-term evolutionary dynamic of capitalism is anchored by the actual costs of production. Hosted on Acast. See acast.com/privacy for more information.

People in this episode

Hosts: Phil Dobbie, Steve Keen

Topics covered

• economic theory
• value
• cost of production
• neoclassical economics
• innovation
• market segmentation
• capitalism

Keywords

• value
• economic theory
• cost of production
• neoclassical economics
• innovation
• market segmentation
• capitalism

Mentioned in this episode

Organizations: Ferrari

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