Editing Value

'''Value'''in economics refers to the worth or importance of a material object, or of a service or a financial claim.  There are various theories as to what determines the value of a [[commodity]]. An early prominent theory was the [[labour theory of value]], which was formulated by the classical economists (including [[Adam Smith]]). This theory, as used by the classicals, took the value of the commodity to be the same thing as its [[price]], and stated that the price is determined by the amount of labour necessary to make the commodity.

Marxian theory distinguishes three kinds of value, called `value', `exchange value', and `use value':
# Value is a social relationship between producers exchanging their products. It depends on labour time and is determined by the Marxian labour theory of value which is a  refined version of the labour theory of value used by the classical economists.
# Exchange value is the proportion in which a commodity exchanges with other commodities (X amount of iron can be exchanged for Y amount of cotton, etc.). Exchange value is closely related to [[price]].
# Use value is the actual usefulness of the commodity for fulfilling people's wants and needs. It is the same thing that modern procapitalist (neoclassical, Keynsian, etc.) economists call `utility'. It causes people's wellbeing or `welfare'.

The first of the above definitions is the most theoretically important, and is the one  considered in the [[#Marxist theory]] section below. Exchange value and use value may be the subject of separate articles.

{{Quote| ... [value] is only a representation in objects, an objective expression, of a relation between men [sic.], a social relation, the relation of men [sic.] to their reciprocal economic activity.|Karl Marx|Theories of Surplus Value|vol. III, p 147|(Moscow, 1971|}}

{{Quote|Value is ultimately a set of power relations (class) in which the power can easily disappear into what appears to be purely quantitative relations between things.|Robert Albritton|Economics Transformed|p 95|London, England; 2007; Pluto Press}}

==Marxist theory==
A formal definition of value is: ''value is a social characteristic of things which manifests itself in the relations between producers when they equate one commodity with others in the process of exchange.'' 

Value in this sense exists only in a commodity economy (that is, a market or capitalist economy).  It is a characteristic of all commodities, but not a physical characteristic such as height, weight, or colour; it is a social characteristic: a characteristic that expresses the object's role or position in society. Value expresses the relative strength of the object in the exchange relations of society. In Marx's view, the fact that commodities exchange in ratios that are not simply random or accidental -- that is, that their values are predictable -- meant that they must have some common characteristic that enables them to be compared; and he believed that this common characteristic is that they are all products of human labour.  Thus he embraced the position that had also been held by the classical economists, which is that the value of a commodity depends on the amount of human labour required to produce it. In other words he held that people will tend to exchange their products in proportion to how much of their labour time they put into making the product and how much of the labour time of previous producers they had to pay for to obtain the materials and tools needed. This is a ''labour theory of value.'' Unlike the classical economists, however, who had treated value and exchange value as being the same thing, Marx distinguished between the two, treating value as being a fundamental and relatively constant quantity which underlies exchange value, which is more variable. Exchange value depends on value but is subject to other influences as well, which cause it to deviate from value.

The Marxist version of the labour theory of value (LTV) is as follows: ''the value of a commodity is determined by the quantity of socially necessary abstract labour time needed for its production and reproduction." (For convenience, socially necessary abstract labour time is abbreviated by some authors as SNALT.)

An equivalent statement of the Marxist LTV is this: ''the value of a CD is determined by the number of hours of labor, of average skill and intensity, that are required to produce the CD under normal conditions of production.''<ref>University of Massachussetts, Econ. 708, Slide 3B: "Use Value, Exchange Value, Value, and Labor" [https://courses.umass.edu/econ708/Slides3B.pdf umass.edu] Archived [https://web.archive.org/web/20220224001929/https://courses.umass.edu/econ708/Slides3B.pdf here] and [https://web.archive.org/web/20041229235152/http://courses.umass.edu:80/econ708/Overheads3B.doc here] and [https://comun.ourproject.org/documents/umass_slides/ here]</ref> (CD stands for commodity.)

==Notes==
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[[Category:Political economy]] [[Category:Value]]