Sometimes for ideological reasons, people, including commentators and economists, tend to have anchoring and framing biases that make them confuse various notions, which might be linked somewhat, but are far from being identical. The fact that every school of thoughts added its own, usually narrow, approach, makes it difficult to unravel the ball of strings

When it is no longer clear what we are talking about, when definitions are mixed up, no wonder that reasoning is perturbed and that there is a lot of conflicts between various schools of thoughts.

The example of value

Confusions are frequent about what is value.

Value is essentially an estimate of the potential or desirable price.

That estimate is done:

Either in a subjective way, by any person according to its expectations or even its wishes,

Or in a theoretical way ("fair" price, "intrinsic" value) by analysts using specific standards

That makes already several different notions. But also, value is often confused with:

Objective value Price (market value or, in some cases, administrative decision). As it is usually publicly known (except when a black market exists) it is the most objective data, the reality that can be seen. But it depends on how well the market works or the administration decides. It can also be influenced by irrational behaviors. But it keeps being the reality. Subjective value Utility or ophelimity (economic satisfaction), It is a personal value that somebody estimates or feels according to its own perceptions, needs, preferences and possibilities). Usage value, a kind of utility extended to the whole population, based on theoretical assumptions. Social utility, a close concept which extends the utility notion to the "common good" which raises the question of who could judge what it is. Or an element of cost (work value).

Some history about economic value

Many economists gave their own approaches of economic value, some of them with quite a narrow view.

Daniel Bernoulli was the first to link value to utility and more specifically to risk attitude.

This idea is still used, for example to define a financial value, or more precisely an expected financial utility.

The Physiocrats considered that only agriculture produced economic value, and that industry and trade did not add any.

This misconception still exists in another form, as some consider that only product-generating industries (agriculture and manufacturing), and not the service activities, bring economic value. This is ignoring that in developed countries 70% or 80% of the economic activity, therefore of the production (as measured by the GDP - Gross Domestic Product of those territories) is made of services.

Adam Smith, Pareto and Marx related economic value only to the quantity of work needed. This was ignoring the utility factor.

Nowadays we live more and more in a world of ideas. We often hear that "virtual reality" is intruding more and more in society in general as well as in everybody's life. A phenomenon that is not limited to "advanced" countries.

That "virtualization" impacts more and more the economy, a domain of social activity among others. Here, the phenomenon is not limited to the reductive new economy concept, which focused on communication technologies. It is not limited either to the more extensive concept of behavioral economics. It has consequences on about all aspects of the economy, such as:

Products and services - except those which satisfy basic material needs - have an important mental content.

This involves cognition and emotions, for those who purchase them, who receive them or who create and supply them,

Prices result for a big part from an equilibrium reached between subjective values.

Besides, money is nowadays and has been for a long time, since gold and silver coins are no more in use, an abstract and immaterial being.

What is money? Three roles and two forms Money is an economic instrument made to 1) exchange (to pay, to give...), 2) to measure and 3) to keep value. It has two forms: The main one, "sight" bank account balances, (used with transfers, checks, payment cards...). It is also called "bank money" and is well adapted to be used as "electronic cash". And physical cash (banknotes/coins) which role is more and more secondary. It is also called "fiat money". It can be legally defined as a commitment based on other commitments Money is created by the banking system, essentially as a counterpart of a myriad of borrowers' commitments. The banking system commits itself to make that money acceptable and usable (as payment notably...). Those contractual commitments can be considered as the collateral of depositors (and indirectly banknote bearers). Central banks, which control that creation (and which also issue directly the fiat money"), and are lenders of last resort add another level of warranty. States and their taxpayers are the ultimate guarantors in case the banking system cannot face its own commitment to money holders. Monetary policy Each central bank is responsible to control how a specific money unit (Euro, US dollar, Mexican peso, or whatever) is issued by the banking system of the related territory. It regulates the quantity and price (interbank interest rate, to simplify, and, for some central banks, the foreign exchange rate) of that money. It is usually considered, here again to simplify, that too much credit and money might bring consumer price inflation and /or asset bubbles, and that not enough money might bring deflation / recession and/or underinvestment /  asset crashes.

Work includes more and more knowledge, organization, communication, preferences, conception, heuristics, money flows, etc.

Capital (see above) is not only, unlike classical economists thought, a portion of human work which had been saved (instead of consumed), retained, accumulated...

... or even by a "class" of people dedicated to enslave another one, as pretends various extreme theories that consider capital as a "social domination" tool.

Capital is an economic "riches" (like products and services) and a specific resource. Its value, which measures to what extent it is present among other riches, is not directly based on the price of the physical equipments used for production. It depends largely on less tangible elements such as the company's goodwill, the anticipation of gains and the equity investor preferences.

The capital-work duet does not cover the whole range of factors of production (which include also inventiveness, subjectivity, knowledge...).

Between you and me, how strange that many economists still did not fully understood what the present world is, which creates biases in their reasoning.

Artists, and some scientists (neurosciences...) understood this before them. Cleric and gurus also (here it is a bit more worrying). Same thing for philosophers, psychologists and sociologists (although often with ideological prejudices and quarrels between schools).

Let us not forget that emotions, immediate satisfactions and dissatisfactions, are often what triggers decisions, sorry for the economic man who sees only rational calculations.

Economists from all schools might be too materialistic, they might need to play virtual economy games on the internet, of course with the utmost moderation, better not shift fully into other dimensions and end up as immaterial ectoplasms in parallel universes ;-).