Sergio Stefanuto
Joined: 14 May 2009
Location: UK
|
 Posted: Tue Jan 05, 2010 6:09 am Post subject: Economics no-brainers |
 |
|
Got econ no-brainers? Dump 'em here!
| Quote: |
There is no such 'thing' as value
The value we accord to different things is very important to us, but value does not reside in objects. An object might have length and breadth and depth, but value is not something that inheres in the object. It exists instead in the mind of the person contemplating that object. We speak loosely of something having value, but that value is neither in the object nor a property of it.
It is necessarily subjective.
Because value does not reside in objects, there can be no external or objective valuation. There is no "labour theory of value" telling us, as Marx said, that something is worth whatever labour it took to produce, and that when something sells for more than its "labour value" this represents the "surplus value," or exploitation charged by the producer. Not so; it represents the higher valuation placed on the object by the buyer over the seller. A thing may incorporate many inputs in its production, but still be worthless if no-one wants it.
Entrepreneurs seek opportunities to produce goods that people will value, and for which they will pay more than the production costs. They guess ahead what valuation people might place on the future output. Given that our valuations change over time, sometimes they get it wrong; but the rewards go to those who successfully anticipate the value people will place on their output.
This is part of Dr Pirie's ongoing series: Philosophical Observations on Economics
adamsmith.org/blog |
|
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
