Objective theory of value


An intrinsic theory of value (also called theory of objective value) is any theory of value in
economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interact ...

which holds that the value of an object, good or service, is
intrinsic In science and engineering, an intrinsic property is a property of a specified subject that exists itself or within the subject. An extrinsic property is not essential or inherent to the subject that is being characterized. For example, mass is ...
, meaning that it can be estimated using objective measures. Most such theories look to the process of producing an item, and the costs involved in that process, as a measure of the item's intrinsic value. Paradigmatically, money is supposed to be good, but not intrinsically good: it is supposed to be good because it leads to other good things, such as buying better teaching equipments at a local primary school. The explanation aims to differentiate the original meaning of intrinsic value from the actual physical benefit it has. The
labour theory of value The labor theory of value (LTV) is a theory of value that argues that the economic value In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), produ ...
is an early example of an intrinsic theory, which was originally proposed by
Adam Smith Adam Smith ( 1723 – 17 July 1790) was a Scottish economist, philosopher as well as a moral philosopher Ethics or moral philosophy is a branch of philosophy that "involves systematizing, defending, and recommending concepts of right and ...

Adam Smith
and further developed by David Ricardo and Karl Marx. Similarly, the physiocrats based their theory of value in the land.

See also

*Instrumental and intrinsic value *Marginalism *Socialist economics


* Theory of value (economics) {{Econ-theory-stub