The subjective value theory is a value theory that advances the notion that the value of a good is not determined by any luggage of the goods, or by the amount of labor necessary to produce the goods, but otherwise the value is determined by the interests of the place of the individual acting for a good for the achievement of the desired goal. Modern versions of this theory were made independently and almost simultaneously by William Stanley Jevons, LÃÆ' Â © on Walras, and Carl Menger in the late 19th century.
Video Subjective theory of value
Overview
According to the theory of subjective value, voluntary trade between individuals implies that both parties in the trade subjectively see the goods, labor or money they receive as a higher value for the goods, labor or money they provide. The subjective-value theory states that one can create value by simply transferring ownership of something to someone who values ​​higher value, without having to modify it. Where wealth is understood refers to the individual's subjective judgment of their property, voluntary trade can increase total wealth in society.
Individuals will tend to get a reduced level of satisfaction, or marginal utility from obtaining a good additional unit. They will initially prioritize getting the items they need most, such as enough food, but once their needs for food are met to some degree, their desire for other things will start to become more important, and they will strive to bring satisfaction. their need for food becomes the satisfaction of their need for other goods.
In a free market, the competition between individuals who want to trade their possessions and the services they can provide for goods they value high for them results in a series of emerging market equilibrium prices.
Classical economists like David Ricardo believe that individual individuals acquire different utility levels or 'value in use' of services, but do not effectively link them to market prices, or 'value in exchange', see them as separate from labor input quantities and factors other production.
Carl Menger argues that production is merely another case of marginal utility theory. The potential of workers' wages is determined by the value of their work to others rather than subsistence costs, and they work because they value higher remuneration than inactivity.
Maps Subjective theory of value
Diamond-air Paradox
The development of subjective value theory is partially motivated by the need to solve paradoxical values ​​that have baffled many classical economists. This paradox, also called descriptively as a diamond-water paradox, arises when value is associated with things such as the amount of labor that goes into good production or alternatives to the objective measure of the usefulness of a good. The theory that it is the amount of labor that produces good goods that determine its value proves to be just as futile as one can find diamond discoveries while walking, for example, that will require minimal labor, but diamonds can still be priced higher than water.
The subjective value theory is able to solve this paradox by realizing that value is not determined by individuals who choose between the whole class of abstract stuff, like all the water in the world versus all the diamonds in the world. Instead, the acting individual is confronted with a choice between a certain amount of goods, and the choice made by the actor is determined by which the good of the specified quantity will satisfy the highest individual subjective rating preference, or the most desirable end.
Criticism
Marxist political writer and social revolutionary Paul Mattick argues that the theory of subjective values ​​leads to circular reasoning. He argues that prices should measure the "marginal utility" of commodities. However, prices are asked by consumers to evaluate how best to maximize their satisfaction. Therefore, subjective value "clearly rests on a circular reason.Although trying to explain the price, the price is needed to explain marginal utility". Mattick denies the connection between the human mind and the outside world proposed by Carl Menger and modern subjectivism. However, in Austrian economic schools, prices are not intended as quantification of marginal values. Instead, the buyer will only buy good if he subjectively appreciates the better than the price he should pay, and these subjective benefits will tend to decrease with each unit of goods purchased by the buyer.
See also
- Marginalism, the theory of marginal values ​​
- The intrinsic value theory
- Work value theory
- Value power theory
- Economic behavior
References
Source of the article : Wikipedia
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