ABSTRACT

This chapter addresses some of the major assumptions and modes of analysis of mainstream economics, concluding that mainstream economics is of but limited value for forming policies to be applied to industries and processes producing or creating knowledge and information. Money happens to be the measure employed by economists to analyze and compare otherwise diverse economic situations. The economic process is viewed as one of commodity exchange, whereby goods and services possessed by one are traded for goods and services held by another. Economic analysis is frequently employed to reach policy recommendations as to how the production process can be improved. Within the foregoing conceptual framework or model, economists analyze information industries and make recommendations that, it is claimed, improve economic efficiency. Information, as a factor of production, however, inherently means that production processes are continually changing, with the result that marginal cost is evanescent.