What Is Subjective Value? - Learn Liberty 

There's an opportunity here for some entrepreneur. I really, really, really want that Milton Friedman t-shirt.

Che Guevara became popular through Capitalism, lovely!

I'd prefer a Mises or Rothbard shirt ;)

Not just different values for different things, but different value for the same things at different moments, at different locations, and even by the same individual. Now please explain this to Ben Shapiro.

Very much enjoyed this video, Don. In my quest to find my own Friedman iron-on, I found a shirt @ Zazzle-dot-com with a classic quote from Milton that I had not heard before. It reads: "If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand."

I took his class last year.

One correction to the video: Subjective value is not just for human beings. Non-human animals can value experiences, too. This is relevant for some parts of economics, e.g. industries that would inflict suffering (or induce pleasure) on non-human animals. A more fundamental ethical theory like utilitarianism would integrate those forms of subjective value as well.

This theory is so simple and yet so mind blowing.

I found this video because i wanted a Milton Friedman t-shirt. You learn something everyday

The very phrase "value is objective" is a logical contradiction. What is value? Value by definition is the perceived importance, significance, relevance etc. of something by an individual or a group. The categorization of something as "valuable" thus depends on the *subjective* ends or perceptions of the individual. Value by definition is thus subjective.

I have seen the two T Shirts on sale, and they both cost the same. The fact that Guevara is more popular means they can sell more of them, which is why they produce more of them.

@davekeays That quote by Locke says to me that he also didn't quite get subjective value - to say that a peach has no value until it is picked has the relationship wrong-way-round - the peach is picked BECAUSE it has the ability to satisfy a want or need of the picker, i.e. it is picked because it has value (or can be traded for something else the picker values more.) To say that the picking of the peach is what gives it value is essentially adhering to the labor theory of value.

Alex prices are dictated by supply and DEMAND.... Demand IS preference... In a market exchange between two individuals, value and therefore price is immediately subjective. I either want your product at the price you're offering it, or I want it at a lesser price, or it's worthless to me entirely. If the product has no subjective value at all to me, the price I'm willing to pay for it is zero dollars. Therefore it's value to me, in an exchange of two individuals, is zero dollars. This easil

If value is subjective and I say there’s more value in the labor theory of value then you can’t say I’m wrong

They should do a video on sociology vs. economics. That would be hilarious.

I looked up prices for frieman and che shirts and they sell for about the same price given what website youre on and what material its made from etc. So this doesn't seem to be an issue for labor theory of value at all

I subjectively value the shirts equally.

2:20 "Economists didn't understand subjective value until the middle of the 19th century, when particularly Carl Menger of the Austrian School, realized that people pay for things only because they want those things." Really, Professor Boudreaux? This is what Luis Saravia (one of several scholastics who wrote in the 16th century, 300 years before this claim) had to say about the subject: "Those who measure the just price by the labour, costs, and risk incurred by the person who deals in the merchandise or produces it, or by the cost of transport or the expense of traveling...or by what he has to pay the factors for their industry, risk, and labour, are greatly in error.... For the just price arises from the abundance or scarcity of goods, merchants, and money...and not from costs, labour, and risk.... Why should a bale of linen brought overland from Brittany at great expense be worth more than one which is transported cheaply by sea?... Why should a book written out by hand be worth more than one which is printed, when the latter is better though it costs less to produce?... The just price is found not by counting the cost but by the common estimation"

♥️ I have just realized that my pricing problems was due to my unconscious marxist value framework. Thank you! Virtual hugs from Moscow ))

What price would you be selling them for? Same price?

what the value or price at which the T-shirt is kept in the store that value Put by the Producer is and ought to be labour value [

@Fredfiness I'm no expert but yes, I think so.

The best critique of the Labour theory of value is how few people actually understand it. Including this guy

Guess what? Symbolic exchange applies to symbols, but little else. Marx covered this with consumer fetish. Even so, maybe there is labour value in these symbols, Che put his life at risk fighting revolution, became an international icon of the revolution - whereas Milton Friedman was just some number cruncher who put little or no work into his popular image. So Che wins in the fame game. He puts more work into it. The odd thing about symbols, they do take a life of their own. They become almost like real flesh and blood people Legends, they don't come cheap. And this is something we will have to contemplate, as images become more open for manipulation. Are the dead being exploited?

@zilbiol Yes, but if you're buying something to sell it later, the value you will get from selling it is only derived from the seller who will buy it from you, from his/her subjective value, and likewise your subjective value when you buy the thing to sell it later is dependent on how much you think you can get for selling it later.

wanted to ask the same question

What most cons and libs always confuse about Marx is this: for Marxists, price and value are not the same thing. We do not deny that market mechanisms, supply and demand, or even branding will effect the price at which a given product is actually sold. But that price is not the same as the exchange value of the product.

Individuals may value things separately and subjectively from one another, but value in the aggregate means that an objective value at any moment’s time does in fact exist. If more individuals overall subjectively value a thing more than they do another thing, the former thing is objectively more valuable. The Labor Theory of Value is an aggregate measure of value in a population which is why the Subjective Theory of Value can coexist with it.

Excellent. I wonder if anyone - after watching this video - will still not get it. If such a person exists, he should be prevented from breeding.

ie: Ducati vs Harley Davidson

I value more T-shirt with Rothbard than with Fridman ;)

Wait, I don’t understand why the price of the two shirts would differ in the long term. If it costs the same to produce them, any price differential would be a signal to produce more of one and less of the other. The rising price of one shirt indicates, all else equal, demand outpacing supply for that shirt. The firm will raise prices in the short term to clear the market, but will produce additional shirts in the near future (expand supply) to the point where the two shirts are again at the same price. If not, there’s arbitrage opportunity for others to mop up some gains. This refutes the argument being put forth in the video.

as far as I'm concerned and I believe all of man kind there are some things that will always have value and be important. Such as food, water, and bullets. That's why it's very important not to have to pay for any of them if you can possibly manage that.

That's very correct, but should we sell or buy things depending on the subjective value of respective sellers / buyers or depending on the ratio between 'demand' & 'offer' ? Objective value of any product or service is the cost of it being made or produced, so shouldn't we always sell and buy for a fixed value that obeys the real costs? I think this is the only way to prevent things and services to being over/under valued over time which make sense to me. Correct me if I am wrong.

Boudreaux ! We almost have the same family name! I wonder if your from Louisiana because its a french name. Loved the video, concise and clear!

I really want to buy that exact t-shirt, could somebody please tell me where I can buy it? Thank you in advance.

well said

The labor theory of value isn't even from Marx. Not contesting the subjective value, but even then there's certain things whose the differentiation in subjective value between alternatives of the same class can decrease significantly, in the shirt example it would be similar shirts without such drastic difference in ideological appeal, but you can think of most "common goods." Different but not altogether different-tasting brands of foods, and so forth. With those the collective subjective valuation will tend to be pretty close to "the cheaper, the better," to the extent the lower price isn't associated with a perception of lower quality. And that in turn will tend to make the prices as in "market value" be much closer to production costs, with little margin gained from subjectivity on the consumer. That must be specially true for commodities such as raw materials and even labor itself.

How is this anything more than a retranslation of exchange value? It doesn't refute Marx's separation of use value from exchange value. In the example of the t-shirt, the use value is the same, the exchange value, being dependent on the market varies based on market demand. But this in no way is a counterargument to Marx's theory of value. If anything, there's a confusion between exchange value and price. Furthermore, there's a conflation of exchange and sign value, but this is going into Post-Marxism. I think it so naive to think such a simple observation could actually debunk one of the most important theory of the last centuries. I mean really? Come on, someone watching actually believes that's it, that's how simple it is to debunk Marx's Theory of Value. I mean that's a very very very low expectation. Jesus do really at the past and believe folks were just plain and stupid, and plain stupid, that they didn't even know that?!?! Really???

I have a tshirt of Margaret Thatcher in the Che pose and hat. I wear it to troll my libtard friends :p

@davekeays i think you and gergenheimer said it well. Also, by claiming that all value is subjective you negate necessity of life and place all emphasis on subjective relations. This has many negative unintended consequences which Don talks about in an other video.

@Heretic696 might wanna reconsider comments like that. That's about a sentence away from supporting eugenics.

The value comes from the amount of labor however the exchange value can vary since other factors can affect the exchange value price. If the price of labor and labor value plays no role in the value of a product why fight against wage increase? Why bring in new machines to cut labor time? Labor transforms nature. John Locke. Modern Bourgeois thinkers think the can get around this essential fact with arguments like this fool with his supposed T shirt. Even here we are expected to take his word for it because he probable can't find the example so he made it up. It's like saying if you build an obviously defective product that took the same time to build you can't get the same price in the same market.

Labor theory of value debunked for five year olds

I kind of have a gripe with this analysis. I think the real value of the item is not subjective - it's determined by the free market. List both t-shirts in a widely viewed auction (say, on eBay) and see which one sells for more.

Great video - however, it seems odd that Milton Friedman, as a monetarist, should be used as tongue-in-cheek foil to Che in a discussion on subjective value. It seems to me that the monetarist position also betrays a significant lack of understanding of the importance of subjective value. Monetary manipulation, and its consequent distorting effects on the nexus of prices in the economy, ignores the importance of the price system in allocating resources according to subjective preferences.

@krakatoa0mikel People tend to perceive money as more worth if it's guaranteed with something. Paper money not backed by anything is only used because you have to pay taxes in it and establishing competing currencies is illegal.

Superman!

Value is created through marketing, propaganda, lies, talk points or rhetoric. People buy what they want, not what they need. Any good sales person adds value. The problem is when we value profit more than helping others.

Labour doesn’t create value.... that’s why we can just buy piece of land somewhere and not hire anyone to perform any degree of manual labour, nor ourselves perform any labour. Because the value wizard just materializes commodities before us. Yeah, it doesn’t make sense when you think about it.

@Heretic696 lol I'm almost tempted to agree with you but just because such a person has low genetic "value" in our eyes doesn't mean that someone else wouldn't place "value" on breeding with them.

Che Guevara and Milton Friedman t-shirts actually average out to exactly the same price.

it's called taste i learned it in economy...

@krakatoa0mikel Your hypothetical question isn't really about subjective value. Historically, no society has ever chosen an unbacked paper money voluntarily. The only reason it is valued by people is because of habit and laws that force us to use it. However, even if it were adopted voluntarily, unbacked paper money is still corrupt, because the money creators can fabricate claims to goods and services out of thin air, providing nothing but a piece of paper in return. This is a form of theft.

I thought this was supposed to be about free market values. Milton Friedman is a supply sider, shouldn't he equally be a scoundrel?

i want milton t shirt

So valuation is intersubjectively incomparable. That is the main reason why game theory is not about human action.

I want a milton friedman t-shirt

i thought facts were supposed to not care about your feelings.

You would make a fortune selling the MF shirts at colleges these days. One side would love to wear them and the other side would love to burn them.

Milton Friedman is much more valuable, subjectively of course. Although, on the other hand, if it states that Che Guevara is for figs.. ;)

Where can I buy one of those sweet Milton Friedman t-shirts?

The value over human life and the value of profit.... I guess if you are a multibillionaire or help run a corporation the value of human life just is not their. The superman cut was awesome though.

Not just the existence. ;o)

1:40 NERD POWER!!!

MARX IS RIGHT!!!!! 2:40 is so misleading, if supply and demand were in equilibrium for the Che and Milton Friedman t-shirts, then the exchange value of both t-shirts would be identical, since the same amount of socially necessary labor time went into producing them... So if people assigned a high utility value to the Che shirts and desired those shirts, then the producers of the shirt would meet the demand with a matching supply, and this results in the shirt being sold for its exchange value expressed in the price of the shirt, and the same thing would happen with the MF shirts, the producer would try to match the supply with the demand, which means the shirt is sold at its exchange value expressed through price, and because the supply and demand of the Che and MF shirts are in equilibrium and required an equal amount of labor to produce the shirts, their exchange values and their prices would be identical, regardless if more Che shirts are sold. The Che shirts would only cost more than the MF shirts if the demand of the Che shirts were greater than its supply--or if the shirt required more labor to be created--and also only if the supply of the MF shirt was greater than the MF's demand. Of course you could also have different people producing the shirts, which could result in different exchange values (or in this case prices) for the shirts when their supply and demands are in equilibrium, so the Che shirt could be more expensive than the MF shirt, but this would be a result of either the Che shirts being made in a way that required more socially necessary labor, or if the labor time were equal, then the MF shirt could be sold at a price that is less than it should be, and this can ultimately hurt the producer. So overall, Marx was right.

this doesn't debunk LTV...

hahahha this is brilliant!

I can't believe how much time humans waste obsessing about subjective value that there is even more than even 4 minutes of dialogue and science to this subject. It really proves what a scam supply and demand can be. Even though preying on the need of other peoples' sense of belonging is rather despicable in a sense, I really cannot say much good about those in the consumption seat either(regardless of shirt preference).

Che guevara was from argentina

Even for libertarians, this argument is amazingly stupid. Prices are not determined by what people are willing to pay for them. The seller sets the price, first of all, and the consumer decides whether to purchase it or not. So no, demand has nothing to do with the value of the product in question.

Is this same as saying that value is determined by demand? Clearly this cannot be the case. The price point is the equilibrium of supply and demand. Prices are dictated by demand and SUPPLY. If it costed me a certain amount of money to produce a shirt, why would I want to sell it for less than that amount? Even if 1/2 the population doesn't want to buy it at a price higher than my costs, the other 1/2 will and that's all that matters. It doesn't matter WHO is buying it, as long as there is a market for it.

Okay don't go apeshit on me but he really didn't debunk marx here.... Marx only talks about socially useful labor. So let's say you make 10 shirts for 10 people if 9 of them want shirt x and 1 of them want shirt y then you need to make 9 of x and 1 of y. This will give you the exact same price, making something people don't want makes it not socially useful. Actually companies know this, this is why when you walk into a store for a sports team, all the different hats for different sports teams are priced the same (although they have different demand).

That's just so disingenuous, and from a professor as well. The 'value' as labour is not just the labour that went into the production of each t-shirt nor even with the additional labour that went into the production of the technology that made them so cheaply. What about the labour that has been involved in mediating the image of Che as a commodified icon of communism (and therefore a frivolous and relatively benign representation of the man) that has ensured that youth culture and liberal poseurs alike can enjoy the perceived cultural capital as a result of buying and wearing the t-shirts? Marketing and promotional activity is also 'labour' that impacts on the 'value' or saleability of a commodity. His account was just utterly patronising.

Only rich people care about subjective value. I value a T- shirt because of it's utilitiy.

Why, according to subjective value theory, is water not more valuable that diamonds? I know someone is going to tell me that the marginal utility of the next diamond is higher than that of my next glass of water, but why is that? It's because water is readily available. Why is water readily available? Because it takes far less labour to get x amount of water into my house than the same mass of diamonds. Labour is the source of the high value of diamonds, and its lack is the source of the low value of water.

This is a poor representation of the classical notion of value followed by obvious statements about everyone having different wants, which in no way contradict the classical theory of value.

Strawman. When LTV or cost theory talks about 'value', it doesn't mean 'what individuals each prefer', it means prices. Also, wrong. The Che t-shirt will probably cost less because it's mass produced and distributed, whereas you'd have to go to a more specialist source to get a Friedman t-shirt.

Subjective value is a ridiculous concept. This is not value, it is price that you are talking about. Value is determined by cost of production and quality of manufacture, not by how much it costs. You can value things that don't have a price, as you can price things that don't have value.