Basic concepts of standard economics

Zsolt Gilányi
Budapest University of Economics and Public Administration

The value theory (considered as the "standard economics") suffers from serious conceptual difficulties. These are the most appealing when we are concerned with the question of how to attain the equilibrium state. If one wants to support that the value theory describes our decentralised market economies, then the representation of money is indispensable. Unfortunately, money has no value in equilibrium regardless of the type of the value theoretic model. Hence, there is something fundamentally wrong with this approach. In fact, all value theoretic models contain the same basic concepts. These are the wealth consisting uniquely of goods evaluated by the utility, the time devised in periods and the (temporary) equilibrium meaning the consistency of the agents' desire for the period ex ante. The adoption of these concepts forecast some fundamental difficulties that are inherent to all value theoretic models. The irreversible economic approach proposed by K. Martinás seems to face these difficulties.