The Dynamic Interdependence Between Information, Valuation, and Production in a Society

Abstract

Economic theory would not be on the level it is now without the numerous and outstanding contributions of Paul A. Samuelson. He is one of the very few scholars who are specialists as well as generalists in many fields. He has pushed the frontier of economic knowledge into previously unknown regions, and he has maintained a general view of economics in its entirety as well as of the interrelations between the economic, social, and political aspects of society. Thus, even where he opened up a new field, as in the case of consumer demand theory in general and especially in revealed preference theory (see Samuelson 1938, 1947, p. 109 ff.), he knew the limitations of that approach. The theory, as he developed it and as it stands now, assumes a given state of preferences (or valuations) for each person and treats them as independent from other persons’ preferences and from the production activities of the economy. This can be considered only as a first approximation in the very short run. Samuelson stated that explicitly: