Post by RS Davis on Oct 18, 2003 23:40:55 GMT -5
[glow=red,2,300]Gene Callahan wrote:[/glow] The problem with all such efforts to conceive value as dependent on some "objective" factor is that they are viciously circular. If the value of a flute depends on the labor that went into constructing it, then how do we determine the value of that labor? If the value of a head of lettuce depends on the value of the land that produced it, then how do we explain the value attached to that land?
Marx himself recognized, but didn't resolve, this difficulty. He understood that someone who labored all day vigorously smashing chairs could not expect the same pay as someone who worked building them. He declared that it was only "socially useful" labor that determined value. But how in the world could we characterize "socially useful" labor other than by the fact it produced "socially useful" things? In other words, we are still stuck in a circle, explaining the value of goods by the labor that went into them and the value of that labor by the goods it produces.
It was perhaps the Austrian economist Carl Menger who was most responsible for diverting economics from this barren path, although certainly he must share credit with William Stanley Jevons and Léon Walras, who arrived at similar conclusions as Menger almost simultaneously.
Despite his intellectual roots in Aristotlean thought, Menger was wise enough to see that Aristotle had erred in regards to exchange. One can make no sense of the relationship of value to market prices if one regards value as a property of goods themselves. Since the properties posited as "inhering" in goods, such as land and labor, are themselves traded on the market, such explanations must always beg the question as to how those "determinants" of value are priced.
Menger's breakthrough insight was to realize that "value is… nothing inherent in goods, no property of them, but merely the importance that we first attribute to the satisfaction of our needs... and in consequence carry over to economic goods as the… causes of the satisfaction of our needs." (Principles of Economics)
Marx himself recognized, but didn't resolve, this difficulty. He understood that someone who labored all day vigorously smashing chairs could not expect the same pay as someone who worked building them. He declared that it was only "socially useful" labor that determined value. But how in the world could we characterize "socially useful" labor other than by the fact it produced "socially useful" things? In other words, we are still stuck in a circle, explaining the value of goods by the labor that went into them and the value of that labor by the goods it produces.
It was perhaps the Austrian economist Carl Menger who was most responsible for diverting economics from this barren path, although certainly he must share credit with William Stanley Jevons and Léon Walras, who arrived at similar conclusions as Menger almost simultaneously.
Despite his intellectual roots in Aristotlean thought, Menger was wise enough to see that Aristotle had erred in regards to exchange. One can make no sense of the relationship of value to market prices if one regards value as a property of goods themselves. Since the properties posited as "inhering" in goods, such as land and labor, are themselves traded on the market, such explanations must always beg the question as to how those "determinants" of value are priced.
Menger's breakthrough insight was to realize that "value is… nothing inherent in goods, no property of them, but merely the importance that we first attribute to the satisfaction of our needs... and in consequence carry over to economic goods as the… causes of the satisfaction of our needs." (Principles of Economics)
- Rick
