Criticism
As mentioned, the calculation of net output requires a value theory, a way of grossing and netting, and techniques for aggregating the prices of transaction volumes in a consistent way. Obviously, there are many different ways of going about this, but normally a legal framework limits the number of variations possible or permitted (business accounts have to be audited and so on, to guarantee a fair statement of business operations within the law of the land). Nevertheless, the procedure for establishing net output can be contested.
- The valuation standards applied may be contested and differ somewhat between different countries.
- In Marxian economics, the value product is offered as an alternative output measure, reflecting the new value produced by living labor.
- But there is also an ecological criticism that is sometimes made. The argument here is that, in calculating net output, costs and results are only assessed in price terms. Therefore, inputs to production and outputs which are not priced, are excluded in the valuation. Yet those inputs and outputs may nevertheless have an economic or human value, regardless of whether a price could be imputed to them or regardless of whether they can be made an object of trade. If the air is polluted, or depletion of fish stocks in the open seas occurs, the cost of repairing that is not accounted for in the net output of polluters or fishing companies. Sometimes tax levies are therefore imposed. Nowadays the Kyoto protocol has inspired "emissions trading", where the right to pollute is bought and sold, which some regard as a strictly perverse activity. Others however argue it proves the ability of competitive markets to solve any problem of resource allocation.
Read more about this topic: Net Output
Famous quotes containing the word criticism:
“I, with other Americans, have perhaps unduly resented the stream of criticism of American life ... more particularly have I resented the sneers at Main Street. For I have known that in the cottages that lay behind the street rested the strength of our national character.”
—Herbert Hoover (1874–1964)
“... criticism ... makes very little dent upon me, unless I think there is some real justification and something should be done.”
—Eleanor Roosevelt (1884–1962)
“When you overpay small people you frighten them. They know that their merits or activities entitle them to no such sums as they are receiving. As a result their boss soars out of economic into magic significance. He becomes a source of blessings rather than wages. Criticism is sacrilege, doubt is heresy.”
—Ben Hecht (1893–1964)