Skip to main content

Value, Objective

Value, Objective

OBJECTIVE VALUE IN ECONOMIC THEORY

OBJECTIVE VALUE AS A CULTURAL PHENOMENON

BIBLIOGRAPHY

Within the social sciences, the concept of value was initially associated with the discourses of classical political economy, modern economics, and the Marxist critique of capitalism, and was later extended to refer to ideas of what is morally or ethically right or important in social life and in individual behavior. Thus, value can refer to both economic values and cultural valuesthat is, to the valuation of goods and services being bought and sold in the market, as well as to the ideals, principles, and goals that people define for themselves as they pursue the good life and the good society. An objective value is a value that has a universal, transhistorical, or transcultural foundation. As such, it is a concept in opposition to the notion that values are always subjective and relative, and reflect the predilections, choices, and preferences of individual social or economic actors.

OBJECTIVE VALUE IN ECONOMIC THEORY

The idea that a good or service produced for sale in the market possesses a value that is distinct from its price is fundamental to all theories of economic value. All such theories proceed from the assumption that a commoditys value is in some sense the center of gravity around which its price generally oscillates. For the physiocrats, this center of gravity was the productivity of agricultural labor; for the Smith-Ricardo classical school, the labor expended in the commoditys production; for Marx, the abstract labor required for the commoditys reproduction as measured by socially necessary labor time; for John Stuart Mill, the commoditys costs of production; and for the marginalists, its marginal utility to a prospective buyer.

Prior to the marginalist revolution in modern economic thought, the concept of value was treated invariably as an objective one. The value of a commodity was conceived as the sum of the value of the objective inputs to its production (living labor, raw materials, energy, and fixed capital depreciation). Sometimes these inputs were subsumed under one or another version of the labor theory of value and sometimes under a cost of production theory. But it was generally taken for granted that an intimate connection existed between the objective value represented by, or embodied in, a commodity and its market price.

The most important theorist of objective economic value was Karl Marx, who recognized the revolutionary implications of the idea that value exists as a definite (objective) quantitative magnitude that sets parametric limits on prices, profits, and wages. Transforming the classical labor theory of value, Marx argued that living labor was the sole source of new value and that the contradictions inherent in the law of value were at the heart of the laws of motion of the capitalist mode of production. As living labor is displaced from commodity production as a result of technological innovation and capitalist competition, the capitalist system deprives itself of the social substance (labor value) that is its lifeblood, and the rate of profit falls, setting the stage for capitalist crisis and ultimately social revolution. Hence, Marxs understanding of the objectivity of economic value as rooted in historically specific relations of production is integral to his account of the decline of capitalism and its supersession by a new socialist society that will be liberated from the tyranny of the law of value.

If Marxs theory represented the logical outcome of the classical schools commitment to a theory of objective economic value, it is unsurprising that economists committed to the perpetuation, reform, or fine-tuning of modern capitalism were eager to abandon it. The marginalist school of Carl Menger, William Stanley Jevons, and Léon Walras transformed the concept of economic value into an essentially subjective one, insisting that a goods value is determined solely by its marginal utility and that value is merely a psychological relation between a commodity and a potential purchaser.

OBJECTIVE VALUE AS A CULTURAL PHENOMENON

Friedrich Nietzsche was the first modern thinker to project the concept of value outside the sphere of economics (and mathematics) to the sphere of culture, arguing that individuals were motivated less by the virtues celebrated by classical philosophy than by values that reflected their own interests, proclivities, and tastes. His subjective concept of value was to deeply influence the social theory of Max Weber, for whom the subjective value orientation of individual social actors was a fundamental starting point of sociological analysis.

The concept of objective cultural or moral values developed in reaction to the relativism and subjectivism of Nietzschian philosophy and Weberian social theory. Both liberal-democratic and Marxist-socialist versions of the concept have been elaborated, but they are united by the idea that some core human values transcend location, time, and culture and that these values therefore possess an objective character.

SEE ALSO Economics, Classical; Labor Theory of Value; Marginalism; Marx, Karl; Mill, John Stuart; Ricardo, David; Smith, Adam; Value; Value, Subjective

BIBLIOGRAPHY

Clarke, Simon. 1982. Marx, Marginalism, and Modern Sociology: From Adam Smith to Max Weber. London and Basingstoke, U.K.: Macmillan.

Himmelfarb, Gertrude. 1995. The De-Moralization of Society: From Victorian Virtues to Modern Values. London: Institute of Economic Affairs.

McLellan, David, and Sean Sayers, eds. 1990. Socialism and Morality. London: Macmillan.

Smith, Murray E. G. 1994. Invisible Leviathan: The Marxist Critique of Market Despotism beyond Postmodernism. Toronto: University of Toronto Press.

Murray Smith

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Value, Objective." International Encyclopedia of the Social Sciences. . Encyclopedia.com. 25 Sep. 2018 <http://www.encyclopedia.com>.

"Value, Objective." International Encyclopedia of the Social Sciences. . Encyclopedia.com. (September 25, 2018). http://www.encyclopedia.com/social-sciences/applied-and-social-sciences-magazines/value-objective

"Value, Objective." International Encyclopedia of the Social Sciences. . Retrieved September 25, 2018 from Encyclopedia.com: http://www.encyclopedia.com/social-sciences/applied-and-social-sciences-magazines/value-objective

Learn more about citation styles

Citation styles

Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).

Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.

Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:

Modern Language Association

http://www.mla.org/style

The Chicago Manual of Style

http://www.chicagomanualofstyle.org/tools_citationguide.html

American Psychological Association

http://apastyle.apa.org/

Notes:
  • Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
  • In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.