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clarification of value theory

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I would strongly recommend the two books by Tara Smith, Viable Values and The Virtuous Egoist. Here is the really brief Cliff's Notes version. "Value" is possible only given a particular purpose, so by "value" we mean "good for me, in terms of my living". What things are good for you are good because of reality (poison is bad, food is good, and that's because of the nature of food and poison). It is objective because it is determined by reality, and not your personal desires (no matter how hard you wish, poison isn't good for you).

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That's interesting.

You say particular purpose, do you mean rational expectations or inherent quality? The chair in the room is an object that is picked up by the senses and then is subjected when it is called or thought of as a chair. It may have certain qualities that no other object has, but when it is labeled and measured, it is to the mind subjected.

It would make sense that if value is objective, then that could explain why the Austrian School’s theory of value works the way it does if one were to go down that avenue. But there is a part of human nature that subjects reality in order to measure it. For example, an entrepreneur cannot make the calculation that a certain product is bad or good, the entrepreneur just knows that there is a demand for one thing and not the other.

The more I think of this, the more it confuses me. I suppose this means there is something in this area that I do not understand.

This is interesting enough for me to look for those books!

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You say particular purpose, do you mean rational expectations or inherent quality?
No, this refers to the fact that because you have made the fundamental choice to live, then the concept "value" is possible -- it gives you a standard for evaluating actions. If some action is metaphysically good for your ultimate purpose (living), it is good.
But there is a part of human nature that subjects reality in order to measure it. For example, an entrepreneur cannot make the calculation that a certain product is bad or good, the entrepreneur just knows that there is a demand for one thing and not the other.
Anyone can calculate whether a product is good or bad: but being good or bad isn't a contextless absolute. It is good for someone, in terms of a goal. For example, a manufactured object may be spiritually good for the maker because of the high quality of the object and the skill required to make it, but not profitable. A good may be generally popular and profitable to make because very many people want one, but it won't be good for me because I don't want it. One of the most common mistakes people make (and Smith deals with it) is thinking that "value" is an absolute, and is a property inherent in the object.
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How do you know that value is objective, ...
Not sure what you mean by "objective" here. When an Objectivist says that values are objective, he means they are not intrinsic in the thing being valued (nor are they whimsical).

Some of the Austrians appear to say that values are whatever they are, and are causeless, whimsical and subjective. If one reads them as making philosophical statements, they're wrong. On the other hand, one could read them as claiming ignorance about Philosophy, and saying that as far as their particular subject matter is concerned, they are going to take people's values as an unquestioned starting point.

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To relate this back to economic theory, though, I am currently reading von Mises' Theory of Money and Credit. As far as I can tell, from page 90 of 400-some, the Austrian school does not require that all values be objective, but that they possibly be objective.

I'm curious what this question is in response to. I'm not exactly sure what to say, so providing context may help.

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  • 2 weeks later...
That's interesting.

The chair in the room is an object that is picked up by the senses and then is subjected when it is called or thought of as a chair. It may have certain qualities that no other object has, but when it is labeled and measured, it is to the mind subjected.

A chair in a room would be the object of one's consciousness, and one must be conscious of it in some form. One cannot be conscious of something without being conscious of it in a certain way. You are making the Kantian mistake of calling a man blind for having eyes. Consciousness does not "subject" objects; it identifies them.

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I just read this and thought it may be of some help:

"Objective exchange value, as it appears in the subjective theory of value [a la the Austria school of economics], has nothing except its name in common with the old idea developed by the Classical School of a value in exchange inherent in the things themselves. In the value theory of Smith and Ricardo, and in that of their sucessors, value in exchange plays the leading part. These theories attempt to explain all the phenomena of value by starting from value in exchange, which they interpret as labor value or cost-of-production value. For modern value theory their terminology can claim only a historical importance, and a confusion of the two concepts of exchange value need no longer be feared. This removes the objections that have recently been made to the continued use of the expression, 'objective exchange value.' " - von Mises, "The Objective Exchange Value of Money" The Concept of the Value of Money, Theory of Money and Credit

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