The Ochlophobist has rendered us a great service by introducing us to an Orthodox doctoral student in economics at Purdue University, Jeffrey Michler. I've never been to Purdue, but one of my professors earned his economics doctorate there. Although my professor didn't subscribe to the Austrian School of Economics, I remain grateful for his respect and encouragement as I pursued my work on an important Hayekian.
Jeffrey is a Marxist and not an Austrian, but if my professor is any indication, Jeffrey will find Purdue to be a receptive and treasured home.
In particular, I am interested in something that Jeffrey wrote:
The value an individual ascribes to a good is personal/subjective in that they get to decide what they think that good is worth (this has never been doubted by any economist I have read/met). However, if we want a theory of value that has any content, it must be generalizable and comparative. To compare individuals and their personally assigned values, we need to develop some universal good as a benchmark. Thus, in economics, we usually normalize one good to be either unitary (a single unit of that good) or let one of the goods be money.
An object's value is measured by what an acting individual gives up to get it, not by a universal benchmark. If I value a pen and give up a pencil to get it, a pen "costs" a pencil (in an accounting sense), but the pen is not valued equally with a pencil. Likewise, if I pay $10 for a pen, I valued the pen more than I valued $10.
A valuing individual never knows what precise value he places on anything, but he knows what he'll give up to get it. There is no cardinal measure of value. Valuing is a process of ranking, not measuring.
There is no "comparison," no "generalization". Man is sui generis and cannot be deconstructed into any "universally recognizable" valuing component or faculty.
Just as the labor theory of value seeks to deconstruct the mechanism for man's recognizing and achieving his goals and purposes into a universally recognizable benchmark, the subjective theory of value regards man's desires as given and as the starting point of value theory and of economic theory generally.
Which theory accords man more dignity?