# Subjective Theory of Value - Described Summary::The core theory for the Austrian method. Derived by reason Scheduled::Yes ```todoist name: Subjective Theory of Value - Described filter: "#Obsidian Projects & Search:Subjective Theory of Value - Described" show: [due,labels] ``` --- ## Notes I argue that this theory provide the fundamental principle upon which The Austrian School bases its methodology. --- In short, the Subjective Theory of Value says that the subjective judgment of individuals provides the only source of economic value. Without looking at motivation, psychological inclination, or other influences, only individuals can determine value. The measure of value, which cannot be quantified, comes from the preferences of those individuals. ## Subjective Value Only the subjective theory of value remains consistent as to source and measure. This theory establishes that always and everywhere individuals provide the source and the measure of value. Individuals provide the source because the judgment as to value comes from nowhere else. Individuals provide the measure because only an individual can establish the relative value of one good over the other. And no one, not even the individual making the value judgment, can quantify that relative value. Keep this important point in mind. The subjective theory of value proves difficult for many people to either comprehend or internalize. Some people reject the theory entirely because they have blindly accepted other theories of value. Many others seem to know and comprehend the subjective theory of value but they fail to understand and internalize it. I frequently read articles by people who can give a clear and concise definition of the subjective theory of value, but in the next sentence, they make a statement that attributes value to a source outside the individual. One must remember that **always and everywhere** value the individual provides the source of value and measures it by his relative preferences. In order to compare and contrast socialism, free-market capitalism, and whatever mixed system operating in the United States, I must use the only consistent value theory — the subjective theory of value. I cannot deny the importance of labor and land in the creation of marketable goods and services. But, it makes no sense to use labor, which varies in its consistency, and land of variable quality as the sources of value in economic transactions. ### Subjective Theory of Value The elegance of the **Subjective Theory of Value** lies in its 1) simplicity and 2) ubiquity. 1. Economic value has only one source: the subjective judgments of individuals. 2. This source applies to all economic goods in all situations at all levels of production. The subjective theory provides the only consistent “measure” of value in any place at any time. That measure consists of the relative preferences of the individual judging the value. In the mind of any individual one economic good always has relatively more or less value than any other economic good. No objective measure exists for economic value. It is only in the process of exchange, in the revealing of price, that any hint of that relative value becomes exposed. # Publications There are three references to "subjective theory of value" on ***The Free Market Center*** Consolidate them here and online. [subjective-value theory](https://www.freemarketcenter.com/lexicon/index.html#subjective-value%20theory) [value, subjective theory of](https://www.freemarketcenter.com/lexicon/index.html#value,%20subjective%20theory%20of) [subjective theory of value](https://www.freemarketcenter.com/lexicon/index.html#subjective%20theory%20of%20value). - Journal [Brief Summary of Subjective Value](https://freemarketcenterjournal.com/2023/04/20/brief-summary-of-subjective-value/) - Substack [Brief Summary of Subjective Value](https://clearthinking.substack.com/p/brief-summary-of-subjective-value) [Subjective Value](https://clearthinking.substack.com/p/subjective-value) ---