Theories of Value

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  • 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


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?

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