Theories of Value

Basics

• In order to calculate pay, price, and many other things in a system, there needs to be some sort of way to determine the objective "value" of something
• This is a debated issue in economics, and this page goes over the various proposed theories
• Actual Economist Help/Review Would Be Appreciated, If Reading This

List

Intrinsic theory of value

• Essentially what it takes to make something / the utility it provides once created
• Kind of calculated in LCAs
• Doesn't entirely potray reality, but it's a "good place to start"

Labor theory of value

• This determines the value of something based off how many hours of work go into it
• This was the main model used in traditional communist theory by Karl Marx etc
• This isn't very effective in modern times, mainly due to Mechanization of Labor and now the emerging Automation of Labor (See Post Scarcity )

Exchange/Monetary/Power Theories of Value

• Essentiall what it equals in another good, a currency, or political power (that last one is odd, need to find a good explanation or remove it? (assuming it means government control / propping up of indistries etc, but seems like a minor part of the whole picture/irrelevant?) )
• May provide some good data points?

Subjective theory of value and marginalism

• Kind of like "Truth is what the state says? but for value?
• Essentially value is whatever the consumer thinks is valuable
• Explains Fads / Artificial scarcity to a certain extent, but otherwise seems not too useful?

Internal Links

• Open Pricing Standard
• Open Budgeting Standard

External Links

• The Wikipedia Page on Theories of Value
• A Tedx Talk at TEDxCrenshaw by "Areva Martin" Titled "What's the Profit in Nonprofits?" (It mainly is covering the "societal profit" vs a pure economic profit)