ABSTRACT
Value is the utility of the object to the subject’s needs (which include the various transformations of these needs in the subject’s consciousness, such as the subject’s desires and purposes). This definition of the “utility theory of value” is a truth which is universally applicable. However, mistaking the “paradox of value”—such as “water is of great utility with low exchange value”—as an indisputable fact misled the likes of Smith, Ricardo, and Marx. They all deny the “utility theory of value” and embrace the “labor theory of value,” which holds that the “exchange value of commodity is not the utility of the commodity, but the labor congealed in the commodity.” In its great discovery that “use value is the marginal utility of commodity,” the theory of marginal utility shows that the exchange value of water is small because of its large quantity and small marginal utility. It proved that the “paradox of value” is untenable, ending the domination of the labor theory of value, and bringing us back to the utility theory of value that was inherited from Aristotle, namely that the value of a commodity is the utility of the commodity to human needs. However, while the “use value” of a commodity is the marginal utility of the commodity to consumption needs, the “exchange value” of a commodity is the utility of the use value of commodities to the exchange needs, and in the final analysis, is the utility of the “marginal utility” of the commodity to exchange needs.
