## Intrinsic Value Theory The idea that goods have intrinsic value— value contained within the good — seems rather appealing on the surface, but it runs into some severe logical problems. Does a hammer have the same value when being used as a paperweight as it does when it’s being used to pound nails? **Intrinsic Value Theory** would say the hammer always has the same value. But does that really make sense? Despite its fundamental flaws the idea of intrinsic value lies at the heart of many other value theories. [[Intrinsic Value - Source]] [[Intrinsic Value - Measure]] # Intrinsic Value Many other value theories start with the basis of intrinsic value. Any good or service has intrinsic value as a part of its nature. It has that value before it’s owner even offers it for exchange. The problem with intrinsic value originates with the source. People buy and sell goods not because of their nature but for their utility. A carpenter who uses a hammer to make his living might value of hammer a lot more than a homeowner who wants to use it as a doorstop. Likewise, if a good always has a certain intrinsic value, it would always trade at the same price (in terms of goods or money). Anyone with the smallest familiarity with commodity markets would recognize that the same good frequently does not have the same value at different times in different places.