The first question is what is the source of value? For utility has an objective dimension (e.g., a weapon has the objective utility of hurting someone, enforcing our body strength) and a subjective dimension (goods with many different utilities). And work also has an objective dimension (e. g., if it is harder or demands more abilities) and a subjective dimension. Theoretically, it is easy to take one with exclusion of the other, but not in praxis. "Objective value" has a table, known by everyone, as a referential. "Subjective" belongs to the individual appreciation. Then, we can ask "what is creating value"?
Hello Ricardo, I like your idea of relating objective/subjective value to utility. However, the problem lies in the determination or judgment of the utility, which side of the line O/S value falls on.... It is a tough question.
There is a great discussion on what is the source of value. When someone says that it is utility, just like J. B. Say and Austrian School, then comes the determination of what could be "useful". Utility, in Economics, means ability to satisfy necessities. Others say, just like David Ricardo and his rebel son, Marx, that work is the source of value. I do not relate value only to utility, for, sometimes, it does not explain how we can avaliate some goods.
'Value' is a multi-perspective and/or multi-meaning concept. There are other dichonomies of value such as instrumental vs. terminal value; use vs. exchange value; and intrinsic vs. extrinsic value. But I would like to further understand how others think about objective vs. subjective value. Utility is a common factor particularly in instrumental and use value mentioned above....
For me there isn't something as 'objective value'. A value is always subjetive, because needs a person (and a set of preferences) that 'give value' for an object or a service. From my point of vue, what people use as 'objetive value' is price.
Thanks Amadeo, I agree with you. you have enlighten me. Yes, almost everything requires judgment and hence they are subjective. Only the few things that are almost absolute and conrete that we categorize them as 'objective' (or should be) .
Judgement is subjective, even when there is a referential table. We could say there are more subjective values and less subjective values, maybe.
I guess in the case of subjectivity vs objectivity, there is no absolute. There is much debate in the past, however, I think it is a matter of degree within the spectrum. There is no absolute 'objectivity' since it is dependent on human judgment, as such I would call it "relative objectivity". It depends on the judgment and agreement of majority. Like in the movie 'Matrix', how do you know what you observed/perceived is real...even if majority if not all perceived it the same way!?
Interesting question.
Value is the importance that we attach to things. In this sense, all values are subjective.
The basis of valuation however, can be objective or subjective. For instance, there is a school that believes that the labour used directly or indirectly for the production of things is the basis of valuation. Others pin this burden on the marginal cost of production. THese approaches that explain valuation from the supply side, or production process stress an objective basis of valuation.
On the other side, valuation is explained by the psychological state of the final consumer: marginal utility, Marginal Rate of Substitution, and the like. Since the basis of valuation in these approaches lies in the mind of consumer, these approaches favour the subjective as the basis of valuation.
In reality, both approaches overlap, and final values in the economy reflect both.
Those who speak of 'creation' of values, generally focus on the supply side or the production side approach to valuation of goods and commodities.
Recent insights... objective vs subjective value make more sense when we look at them in object vs subject orientation/perspective i.e. the focus is on the object being evaluated or the subject evaluating.
When we look at an object/event/phenomenon we look at their properties, attributes, functions and/or functions. The observations would most likely be agreeable as they are consistent amongst observers (relative objectivity)
However, when we look at the subject evaluating the object/event /phenomenon and ask what it means.Subjectivity sets in. The focus now is on the subject. Each and everyone of us are pretty unqiue in our perspectives because of our diverse experiences and up-bringing...
This also sheds light to the issue of intrinsic vs. extrinsic value. It falls into the same trap of confusing object vs sbject orientation.
Value must be subjective. Kurt Vonnegut explains it better than I. In one of his books, he describes an apocalyptic world. In this world, people used to believed that pieces of paper with pictures and numbers on them had value, and one could exchange them for food and clothing. One day the stopped accepting these pieces of paper in exchange for food and other goods and these pieces of paper became worthless. It is the same with gold and silver, When people want to horde gold and silver, they are worth something. If they are not in demand, they have no value.
Value is actually subjective as it involves the discretion of the Valuer, however Valuer in using his discretion must be objective so that the margin of error will be reasonable and within an acceptable limit
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