chapter  2
76 Pages


A theory of value concerns what creates, and measures, worth and good. Capitalist theories look to consumers to establish value (Table 2.1) by exchanging goods and services in a market place. When capitalist economics talks of value it therefore means exchange value. That which satisfies the ‘wants’ of most people has most value. What is most and least wanted is signalled (in theory) by price-high price denoting high demand in relation to supply. Marxist theory is producer-oriented, seeing the principal source of value as human labour-the more labour invested in products and services, the more valuable they tend to be-especially if they meet ‘needs’ rather than ‘wants’. Here the latter are regarded as partly artificial: created by advertising, for instance, in consumer society. Socialist economics, then, do not focus on the process of exchange to establish value, but emphasise social usefulness. In capitalism, socially useful goods and services may not be provided to the poor because the poor cannot signal that they value them, by paying high prices.