One accusation I’ve seen raised against the subjective theory of value is that the Subjectivists are guilty of equivocation, substituting the perception of value (a subjective, self-local opinion) for “value” (defined as a property innate to an object or product).
Menger makes it abundantly clear, however, and takes pain to repeat himself on several occasions in Principles, Ch.3, that no such property or characteristic as “value” exists in the first place.
Value is therefore nothing inherent in goods, no property of them, but merely the importance that we first attribute to the satisfaction of our needs, that is, to our lives and well-being, and in consequence carry over to economic goods as the exclusive causes of the satisfaction of our needs…
The value of goods is therefore nothing arbitrary, but always the necessary consequence of human knowledge that the maintenance of life, of well-being, or of some ever so insignificant part of them, depends upon control of a good or a quantity of goods…
[Value] is a judgment economizing men make about the importance of the goods at their disposal for the maintenance of their lives and well-being. Hence value does not exist outside the consciousness of men.
At a glance then, it is not the Subjectivists who are guilty of equivocation. It is exactly the opposite.
Great explanation. Still don’t get those guys.
“The value of goods is therefore nothing arbitrary, but always the necessary consequence of human knowledge that the maintenance of life, of well-being, or of some ever so insignificant part of them, depends upon control of a good or a quantity of goods…”
Given that some goods are not valued arbitrarily or by whim, but as judged by man’s consciousness according to the facts of reality, why not call it Objective then?
The connotation “subjective” contrasts classical economics, which maintained essentially that there was “an objective value” inherent in a product. Beyond subsistence, everyone’s value scales are different and subjective. It says that value is not some mystical flotsam & jetsam waiting to be divined, it is not related necessarily to the “cost” or the particular item, but rather to the opportunity cost of not having it, i.e., which needs or wants would go unmet/unsatisfied in its absence?
I get it, but if the theory is that there is some value inherent in an object seperate from a valuer, that it is “intrinsic value,” not objective. “Objective value” would require an evaluation of the facts of the object by a human consciousness, which sounds a lot like the second sentence in the Menger quote.
The term “Subjective value” just doesn’t sound right to me. It seems to imply that market values can be arbitrary, which would, for a statist, requre intervention to prevent capitalist bosses from exploiting in the name of “fairness.”
But “subjective” isn’t arbitrary (although many of the theory’s detractors suggest that market prices are arbitrary), it just means that the determination of how valuable a thing is depends on individual scale of preferences, wants & needs. In the subjective sense it’s an opinion, like “beauty,” which according to the old adage, “is in the eye of the beholder”.
I once told an online socialist that I value my dog more than I value his child and he almost had a heart attack.
He sputtered about, failing to realize my assertion was exactly the same as his.
@Rights:
The term “Subjective value” just doesn’t sound right to me. It seems to imply that market values can be arbitrary,
+++++++++++++++++++++++++
Maybe you’re just not used to seeing it phrased that way, but it is a fact.
No two individuals will value the same thing identically.
Watch Mecums Auto Auction on TV sometime for proof.
One guy thinks a cherry 57 Chevy is worth $80k but another guy thinks its worth $120k. Same car, different valuers.
This is at the heart of a truly free market where each actor gets to establish his own values which is absent in one-size-fits-all statism.