What is "value"?

[Prinskaj]

When i first heard the term "value" being used in the economic sense (In books and here on this site), I merely thought that it was another word for price. But I have heard the words, price and value, being uses differently, so I would like to know, what does it really mean?

[Nothing Human Is Alien]

http://www.marxists.org/archive/marx/works/1865/value-price-profit/

[Prinskaj]

It would be nice with a simplified answer, as it would most likely be easier to remember.

[Rooster]

A value is just a quality of a thing. Use-value has the value of being useful or not and in different degrees but it must have the "value" of being "useful" in the Marxist sense when talking about commodities. Of course, it can also have the "value" of "not useful" but that wouldn't really make it a commodity. You also have exchange-value which is a relative value or magnitude; this number of sprockets equals this number of wedges. Price is another value that an object can have and it's closely related to exchange-value.

[Firebrand]

Of course, it can also have the "value" of "not useful" but that wouldn't really make it a commodity.

Then why are brussels sprouts considered commodities. They make no sense, no-one likes eating them and yet for some reason they are persistantly served with christmas dinner. Its like some kind of compulsion. You're going through the shops grabbing the ingredients and for some reason you always pick up the brussels sprouts even though when you think about it you remember that everyone hates them. Ok completely pointless tangent rant over. Go on with your proper discussion.

[citizen of industry]

Price is the exchange value expressed in monetary terms, because labor is paid in wages, not products, and nobody wants to exchange sprockets for wedges to exchange wedges for milk. The value of the object is deteermined by the amount of labor put into it. Supply and demand being equal, you can see this. Discrepencies in supply and demand change the price, though the tendency of supply and demand is to equalize.

[cenv]

When i first heard the term "value" being used in the economic sense (In books and here on this site), I merely thought that it was another word for price. But I have heard the words, price and value, being uses differently, so I would like to know, what does it really mean?
Value is contextual.

Value in the context of an object's actual function as a particular kind of object is use-value. Use-value is qualitative.

Value in terms of a commodity's relationship to other commodities is exchange value. It's an abstract equivalence. Exchange value is quantitative.

Use-value is how an object is used in people's actual experience while exchange value is an economic representation of an object.

It's important to recognize both kinds of value because the tension between use value and exchange value is a key characteristic of capitalism.

[Nothing Human Is Alien]

It would be nice with a simplified answer, as it would most likely be easier to remember.

So see the link, which has a simplified answer and a simplified explanation of it.

Unfortunately it's not all cut and dry, short twitter-sized answers. If you really want to figure out what's going on, it takes some work.

Value, Price and Profit is a good place to start.

See also: http://www.marxists.org/archive/marx/works/1859/critique-pol-economy/ch01.htm

[citizen of industry]

I think it also important to note here that historically money is used to exchange commodities and realise a use value, as we proletarians do today, exchanging our commodity labor power for money, which we use to purchase commodities. Capitalists use money to purchase labor power, then exchange commodities for money, the opposite. Hence money is fetishized.

[Die Neue Zeit]

A value is just a quality of a thing. Use-value has the value of being useful or not and in different degrees but it must have the "value" of being "useful" in the Marxist sense when talking about commodities. Of course, it can also have the "value" of "not useful" but that wouldn't really make it a commodity. You also have exchange-value which is a relative value or magnitude; this number of sprockets equals this number of wedges. Price is another value that an object can have and it's closely related to exchange-value.

For the OP: use-value is similar if not identical to the more mainstream concept of economic utility.

[Zealot]

Exchange-Value (http://www.marxists.org/glossary/terms/e/x.htm#exchange-value)

Exchange-value is the quantitative aspect of value, as opposed to “use-value (http://www.marxists.org/glossary/terms/u/s.htm#use-value)” which is the qualitative aspect of value (http://www.marxists.org/glossary/terms/v/a.htm#value), and constitutes the substratum of the price of a commodity (http://www.marxists.org/glossary/terms/c/o.htm#commodity). “Value” is often used as a synonym for exchange-value, though strictly speaking, “value” indicates the concept which incorporates both quantity and quality.
Exchange-value differs from “price (http://www.marxists.org/glossary/terms/p/r.htm#price)” in two ways: firstly, price is the actualisation of exchange-value, differing from one exchange to the next in response to a myriad of factors affecting the activity of exchange; secondly, price is the specific value-form (http://www.marxists.org/glossary/terms/v/a.htm#value), measuring the value of the commodity against money (http://www.marxists.org/glossary/terms/m/o.htm#money).


Use-Value (http://www.marxists.org/glossary/terms/u/s.htm#use-value)

Use-value is the qualitative aspect of value, i.e., the concrete way in which a thing meets human needs:


“The utility of a thing makes it a use-value. But this utility is not a thing of air. Being limited by the physical properties of the commodity, it has no existence apart from that commodity. A commodity, such as iron, corn, or a diamond, is therefore, so far as it is a material thing, a use-value, something useful. This property of a commodity is independent of the amount of labour required to appropriate its useful qualities. When treating of use-value, we always assume to be dealing with definite quantities, such as dozens of watches, yards of linen, or tons of iron. The use-values of commodities furnish the material for a special study, that of the commercial knowledge of commodities. Use-values become a reality only by use or consumption: they also constitute the substance of all wealth, whatever may be the social form of that wealth. In the form of society we are about to consider, they are, in addition, the material depositories of exchange-value.” [Capital, Chapter 1 (http://www.marxists.org/archive/marx/works/1867-c1/ch01.htm#S1)]

[Misanthrope]

http://www.marxists.org/archive/marx/works/1865/value-price-profit/

For the drunk and lazy:

Value is the subjective value that is placed upon a product and service by human kind. It's completely subjective. A miller high life might be 50 cents to me but it might be of 5 bucks to you at a ball game.

subjective figure calculated by humans and the "market" whatever the fuck that is

Value is a capitalist concept, pre-scarcity.

[Luís Henrique]

Value is the amount of labour that it takes to produce a given commodity.

Price normally gravitates around value, but is immediately determined by supply and demand.

Luís Henrique

[Luís Henrique]

For the drunk and lazy:

Value is the subjective value that is placed upon a product and service by human kind. It's completely subjective. A miller high life might be 50 cents to me but it might be of 5 bucks to you at a ball game.

subjective figure calculated by humans and the "market" whatever the fuck that is

Value is a capitalist concept, pre-scarcity.

Totally wrong.

Luís Henrique

[citizen of industry]

For the drunk and lazy:

Value is the subjective value that is placed upon a product and service by human kind. It's completely subjective. A miller high life might be 50 cents to me but it might be of 5 bucks to you at a ball game.

subjective figure calculated by humans and the "market" whatever the fuck that is

Value is a capitalist concept, pre-scarcity.

This is a marginalist argument. But again, the tendency of supply qnd demand is to equalize. If everyone is overpaying at the ball game and miller is reaping profits, coors and bud will undercut miller in an attempt to increase market share. Or, investors will pour money into miller and baseball and flood the market, creating an oversupply and drop in prices. In either case, the price tends towards the actual value, determined by the cost of materials and amount of labor in the product. Of course, there are things like price fixing and monopoly, and thats what we see at sports events, where spectators cant buy beer elsewhere and are prohibited from bringing it in.

[ComradeRed]

None of the answers I've read was really satisfactory, let me try to answer this...

When i first heard the term "value" being used in the economic sense (In books and here on this site), I merely thought that it was another word for price. But I have heard the words, price and value, being uses differently, so I would like to know, what does it really mean?
The short answer: value quantifies "exchange-ability".

Consequently, when we discuss value, it has to have some context. There is no abstract unit measuring value, so we have to give definite quantities of distinct commodities and state "These commodities have the same value."

For example, 1 pig has the same value as 2 tons of iron.

Price expresses a given quantity of a given commodity's value in terms of money, but it is not identical to "value".

For example, 1 pig is worth $10, and 1 ton of iron is worth $5.

This definition of price and value is the same, more or less, in any school of economic thought.

Schools disagree as to how value comes about. There are basically two camps: the "Ricardians" (Marx included, hence quotes) who argue it's from the production process, and the Marginalists that argue supply and demand determine price.

The marginalists use inconsistent mathematics, and do not really answer the question: why does supply and demand work?

Recently, there has been a new school (the "complexity" school of economics) which argues that "supply and demand" emerges from interaction from individuals...but it does not resemble predictions from the marginalist school.

If we want to be rigorous about defining "value", we could describe it using abstract mathematics.

A mathematician would say value is used to describe an "equivalence relation" between different commodities.

What does this mean? Well, when we state things like "1 pig = 2 tons of iron", this is not an identity (a pig is not a synonym for 2 tons of iron).

What do we mean by this? We mean "1 pig may be exchanged for 2 tons of iron."

Or "1 pig has the same value as 2 tons of iron."

[ckaihatsu]

Value is contextual.

Value in the context of an object's actual function as a particular kind of object is use-value. Use-value is qualitative.

Value in terms of a commodity's relationship to other commodities is exchange value. It's an abstract equivalence. Exchange value is quantitative.

Use-value is how an object is used in people's actual experience while exchange value is an economic representation of an object.

It's important to recognize both kinds of value because the tension between use value and exchange value is a key characteristic of capitalism.


This is probably about as formal as anyone can get, since tracking "actual" / "pure" precise values for specific items / commodities in an anally-retentive way would take more meticulousness and effort than it would be worth. This is why the market-exchange system prevails for the time being, since it defines an almost out-of-time, singular point of transaction, with all other secondary considerations being left up to the respective parties that meet at the table.

A way of illustrating the chaotic complexity of all of this is to look at the 'value' of an individual person -- since we *are* all commodities under capitalism. Could one *really* trace back and adequately quantify all of the work and social inputs that have gone into building up one's 'value' -- ? Probably, to *some* degree of accuracy, but obviously the value inputs are myriad for any of us, and may not necessarily be convincing to a counter-party at the table, anyway, even if they *could* be delineated and described, each and every one of them. Thus the politics of economic exchanges fills the gap, for better or for worse.

Any *linear* approach to this problem of valuation will be conventional and will depend heavily on 'First Cause' formulations, as in picking variables, just to define the *scope* of the problem.

A far better approach -- though still not necessarily "pure" -- would be to use complexity and connectionism theory, and a massive computational environment, to "just throw all the data into the mix", while enjoying a more artist-like command over the interpretation of the resulting overall mapping output. In this approach it's the *connections* among the various variables that matters more, and these could conceivably be readily better-defined, relativistically, rather than linearly attempting to get each variable correct upfront by the standard of objective reality.

[Revolution starts with U]

Value means a thing is useful or wanted for some reason. Whether use value, exchange value, or any other value, it means someone wants it for some reason.

"I value your support." "This piece is valued at $1500." "Buying at my store is a great value."
Notice in the first one that there is no (explicit) monetary value to "your support" (tho there may be an implicit). It is a use value. The second one is an exchange value. I suspect the third is as well, tho someone more knowledged could clear that up. It's kind-of both the use and exchange value at once. Her store is useful, because her prices are low.

[ckaihatsu]

"I value your support."




[In] the first one that there is no (explicit) monetary value to "your support" (tho there may be an implicit). It is a use value.








"This piece is valued at $1500."




The second one is an exchange value.








"Buying at my store is a great value."




I suspect the third is [an exchange value] as well [...] It's kind-of both the use and exchange value at once. Her store is useful, because her prices are low.


I think it's important to point out a *political* component / aspect for each -- or any other -- as well as the economic aspect indicated....

In the first example it's probably safe to infer that the protagonist is deriving some kind of material or economic benefit from the support being extended, as you've noted. But it's also obvious that there is also a *political* benefit conferred, as in increased visibility and added backing for the protagonist's set of politics and policies.

For the second example it could be said that the mere act of *participation* around monetary valuations is a kind of implicit political support for the activity of (capital-based) arbitrage -- the scenario seems to imply a devotion of a portion of someone's life to the practice of buying and selling, under the umbrella of implicit state sanction.

The third example is interesting because, unlike the first two examples, it is *not necessarily* a statement of plain fact. Rather, depending on the larger circumstances, it could be a statement of *marketing* -- attempted economic influence, going forward -- which is qualitatively *lesser* than plain information itself.

The statement *may* be factually correct, compared to a sampling of the leading edge of competitive pricing, but the seller also has little self-interest in actually *doing* that kind of market research in an attempt to prove empirical correctness.


Interpersonal Meanings

http://postimage.org/image/1d5a6d1c4/

[ckaihatsu]

*marketing* [...] is qualitatively *lesser* than plain information itself.


I'm going to indulge in a bit of editorializing here, to make an additional point on the topic of *qualitative* value....

In social relations -- in whatever context -- there's often a certain momentum, or pattern, established over time that sets the tone for the present, going onward into the future. Depending on the nature of the relation there may be substantial (labor) effort and/or material inputs involved, from both parties -- illustrated in 'Interpersonal Meanings' as a flat wooden "platform" supported to some qualitative "height" from two different "positions".

If, for example, there is a certain regular exchange of information between the two positions, that would come to be considered the 'norm' for that relation, and a pretty-much-level platform would symbolize that evenness of reciprocity. This could colloquially be termed "the high road".

Over time the temptation to materially decrease or qualitatively 'devalue' one's own input to the relation will inevitably arise, since the assumption is that the other party will nonetheless continue to maintain *their* own established pattern of labor / material input -- one would conceivably continue to benefit from the simple existence of the relation, especially in relation to other, external circles, while "getting away" with a lesser contribution to the relation. (This is illustrated as the relatively-right-wing position slipping from a quality of 'information' to one of 'marketing'.)

Depending on the situation this 'devaluation' may either be successful or it may not -- such an action risks the viability of the entire relation altogether, and the 'reputation' (perceived political capital) of one and/or both parties. It could be termed as going from the 'high road' to the 'low road'.


[19] Ideologies & Operations -- Dynamics 1 of 2

http://postimage.org/image/1czwohfk4/

[u.s.red]

Didn't some guy named Marx say that value was the amount of socially necessary labor contained in a commodity?

[ckaihatsu]

[23] A Business Perspective on the Declining Rate of Profit

http://postimage.org/image/35qexc278/

[ColonelCossack]

Then why are brussels sprouts considered commodities. They make no sense, no-one likes eating them and yet for some reason they are persistantly served with christmas dinner. Its like some kind of compulsion. You're going through the shops grabbing the ingredients and for some reason you always pick up the brussels sprouts even though when you think about it you remember that everyone hates them. Ok completely pointless tangent rant over. Go on with your proper discussion.

MotherCossack eats 40+ per day. She holds up the whole sprouts industry.