"Price" and "Value" Oscar Wilde had the measure of when he defined the Cynic.

"Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky

'Price' means nothing, except that someone is prepared to pay X for an item or service at a particular point in time.

GDP comes from aggregating all of these transactions with some rather nominal national weightings and producing a measure of something which supposedly correlates to wealth.

But if a social relationship or physical process can't be reduced to a transaction with a price, it doesn't appear on the books, and in economic terms it's invisible.

The big problem - the one that I haven't seen any economist try to tackle, from Keynes downwards - is how to explicitly include these relationships so that they do appear as factors.

Most people when asked will tell you that it's these social and cultural relationship that define real value - in the sense of what makes life worth living.

So where are these values in economic theory? There's occasionally a bit of handwaving about quality of life, but there's no explicit concern with these relationships. In fact they're often considered a dangerous distraction.

This is why businesses allowed to lay people off to pump up the bottom line. The social costs are very real. But they're only calculated indirectly. And even then, it's not the businesses that pay for them.

The point is that these costs are real. You can't dismiss them as subjective because the concept of price is equally subjective - it's one microscopically narrow view of one very tiny subset of human interactions. And if anything these other transactions are more real to people's experience than anything in classical economic theory.

So not including them in a theory of wealth is dysfunctional. Saying they're hard to measure is irrelevant if there's no serious attempt being made to measure them and include them in policy decisions at all.

And in the meantime we're seeing endless, and quite possibly terminal, examples of that dysfunctionality happening today.

The corollary is that if you measure the right things, many problems become simpler because you have a direct handle on them. What we have now is rather too much energy expended on one-dimensional measures like inflation and unemployment and GDP and interest rates, papering over a lingering sense of unease that something isn't right in our culture, but it's impossible to clarify or quantify what it is.

A saner system would reverse that.

More than that - my guess is that a healthy culture is far less likely to have problems like inflation and unemployment anyway.

If relationships are functional and inclusive rather than predatory, a lot of the supposed problems in economic theory will very likely vanish, because the system as a whole will be operating at a much more intelligent and spontaneously organised level.