Value is a “dangerous word” because it can be and has been defined in many different ways. The current definition of value, according the Merriam-Webster, is “usefulness or importance.” Something that has importance or usefulness is related to a commodity with utility because a commodity doesn’t have value without utility. Value is a “dangerous word” according to Jevons because the term, value, can hold many underlying meanings that are not always supposed to be used. Three of these underlying meanings are value in use, urgency of desire, and the ratio of exchange. Jevons uses the third meaning because, to him, it is the most economically correct meaning. This ratio of exchange is the same as purchasing power which is, determined by the
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Jevons is very insistent that value is determined by utility and so he focuses on elaborating on this term rather than value. He says, “Repeated reflection and inquiry have led me to the somewhat novel opinion, that value depends entirely upon utility” (Page 434, The History of Economic Thought, A Reader). Utility is the single most important element to value and it is has two dimensions, duration and intensity. Essentially anything that a person is will to labor for and desire for must have some utility because it must be creating some type of pleasure for that person at a given time. Humans will eventually reach a point where having more of a commodity will yield less utility and, therefore, less value. Utility is very important in exchange value because commodities being exchanged at sufficient quantities and at the correct time allows for the best value. Exchange value for a divisible commodity, as mentioned by Jevons in The History of Economic Thought, A Reader, is mainly decided by the final degree of a commodity’s utility rather than its total utility. A simple assumption about humans is that they will never give up something they desire more for something that they would desire less. Perhaps one of the most revelations by Jevons is that “Labour affects supply, and supply affects the degree of utility, which governs value, or the ratio of exchange” (Page 459, The …show more content…
Ricardo and Smith agree that both the quantity of labor invested and scarcity determine value in an object. However, Marx and Jevons will direct people to believe that utility is the true determinant of value in which labor plays a role. Marx believes that labor based on intensity and duration linked with labor power determines how much utility is in a commodity. To Jevons, labor affects supply of a commodity which influences the degree of utility, and this degree of utility determines value or the ratio of exchange. Smith, Mill, Marx and Jevons agree the value in exchange is determined by the quantity of one commodity receives for the quantity of another commodity. Labor is the benchmark component of value, but utility is the cornerstone of
Jevons is very insistent that value is determined by utility and so he focuses on elaborating on this term rather than value. He says, “Repeated reflection and inquiry have led me to the somewhat novel opinion, that value depends entirely upon utility” (Page 434, The History of Economic Thought, A Reader). Utility is the single most important element to value and it is has two dimensions, duration and intensity. Essentially anything that a person is will to labor for and desire for must have some utility because it must be creating some type of pleasure for that person at a given time. Humans will eventually reach a point where having more of a commodity will yield less utility and, therefore, less value. Utility is very important in exchange value because commodities being exchanged at sufficient quantities and at the correct time allows for the best value. Exchange value for a divisible commodity, as mentioned by Jevons in The History of Economic Thought, A Reader, is mainly decided by the final degree of a commodity’s utility rather than its total utility. A simple assumption about humans is that they will never give up something they desire more for something that they would desire less. Perhaps one of the most revelations by Jevons is that “Labour affects supply, and supply affects the degree of utility, which governs value, or the ratio of exchange” (Page 459, The …show more content…
Ricardo and Smith agree that both the quantity of labor invested and scarcity determine value in an object. However, Marx and Jevons will direct people to believe that utility is the true determinant of value in which labor plays a role. Marx believes that labor based on intensity and duration linked with labor power determines how much utility is in a commodity. To Jevons, labor affects supply of a commodity which influences the degree of utility, and this degree of utility determines value or the ratio of exchange. Smith, Mill, Marx and Jevons agree the value in exchange is determined by the quantity of one commodity receives for the quantity of another commodity. Labor is the benchmark component of value, but utility is the cornerstone of