Value Theory According To Important Figures Of Society

Value theory according to important figures of society

While it is true that there are many theories, regarding everything that surrounds the economic issue, the theory of value shines for its complexity. More than, being analyzed and exhibited in the studies of several illustrious figures of the classical economy such as: Adam Smith, David Ricardo and including Karl Marx.

The value theory is guided by being that economic explanation about the exchange value or price of any good or service. In the same way, that the way in which the goods and services are valued is questioned, the value that those must possess and also the correct price they should have. Since being a theory studied by these great representatives, what would be the notion of value and work of the aforementioned exponents?

The objective of this essay is to expose the different perspectives of the theory of Adam Smith, David Ricardo and Karl Marx (which can be mentioned does not belong to the Classical School of the Economy, but is relevant in terms of his criticism and study and studyon value theory);to later analyze its importance, ends, foundations, efficacy and relevance that persists in the modern world.

It is for this reason that the following texts will be used as a guide: the richness of the Nations of Adam Smith, the richness of Alessandro Roncaglia’s ideas, History of economic thought of Harry Landreth and David C. Colander, Marx capital guide of David Harvey and theory of value and distribution from Adam Smith ideology and economic theory of Maurice Dobb.

In the first instance, Adam Smith’s concept about value theory will be analyzed. To get to the point you have to know in part, who is one of the greatest exponents of the classical economy. Adam Smith, who was born in Scotland in 1723 and in life was a philosopher and economist, is considered the father of modern economy. His contributions regarding economic theories are perfectly related to history, philosophy, psychology, ethics and others. And it is not an occasional fact that they have revolutionized the economic notions of their time, at the same time, that formed the basis of the economic systems that we have today.

Adam Smith in two of his books: the richness of nations and theory of moral feelings;He brought the concept of man’s selfishness to the economy, that is, that he supported the idea that the individual is a being that first watches his own interests, almost regardless of the others. However, he has the ability to recognize the need to provide and accept help. Therefore, it does not bother you to cooperate with others, as long as you get a benefit in response whether moral, spiritual or material.

As for the theory of value, there is a type of laws by which people exchange goods for money or other goods, Adam Smith stable the following:

It should be noted that the word value has two different meanings. Sometimes it expresses the usefulness of some particular object, and sometimes the purchasing power of other goods conferred by the property of said object. You can call the first "use value" and the second "exchange value". Things that have a great use value frequently have little or no exchange value. There is nothing more useful than water, but with it you can hardly buy anything;Almost nothing will be obtained in exchange for water. A diamond, on the contrary, has hardly any use value, but in exchange for it you can generally get a lot of other goods. 

As Smith exemplifies with water and diamonds, about the different types of use and change value, we can observe that this situation lasts in our times. This shows the bases that I leave exposed in their theories. Continuing with the theory of value, it is here that the concept of work is exposed, which Smith defines: "The work is thus the real measure of the change value of all goods¨”. It is in this way, that the true price of all objects, cost the process and effort that its creation supposes. What entails, that in the exchange for an object or service you have to pay with the work of our body. However, there is a difficulty in work and value, Smith expresses:

But although work is the real measure of the change value of all goods, it is not the measure with which its value is usually estimated. It is often difficult to discern the proportion between two different amounts of work. The time invested in two different types of work will not always suffice on its own to determine that proportion. We will also have to take into account the diverse degrees of supported effort and dexterity deployed.

In other words, it is not an easy task to estimate the value of work since this would lead to a tangle in terms of time, skill and effort;It would not be the same to pay in a specialized job than in a fast and common one. On the other hand, it is necessary. This approximate match does not end up being precise, even so, it is still used in economic activities. Another substantial part is the action of the exchange of goods, when this process is established, they tend to compare them with others. Subsequently, it would be estimated to estimate the value of the change merchandise by some other merchandise.

Regarding money, following the example of butcher, baker and brewer of Smith it is established that:

And so it happens that the change value of all merchandise is usually estimated according to the amount of money obtained by it, and not according to the amount of work or some other merchandise obtained in exchange for it.

We have already mentioned that Smith’s thought brought a before and after for the economy, in his time, of course it should be noted that his method was more historical;This can be evidence. David Ricardo Guiasto in much of Smith’s thought decided to give the theory a value of the value a more pragmatic approach, which I will present in the following paragraphs.

David Ricardo, was one of the influential economists of the modern classical economy, was born in the United Kingdom in the year of 1772. Of Jewish Sefardí origin, at first he was a stock market agent until he dedicated himself to the economy. Among its main contributions we find: the Public Treasury, the Law of Decreasing Recreasing, International Trade, the theory of Income, the comparative advantages and mainly for this essay the theory of value-work, with the origin that:

Most value theories try to explain the forces that determine the relative prices existing at a given time of time. However, according to Ricardo, the main problem of a value theory is to explain the economic forces that cause the variations of relative prices over time.

David Ricardo, when he raised his theory he focused mainly on work, while trying to differentiate himself from what was expressed by Smith, and he mentions it in Ricardo (as cited in Landreth and Colander, 2002) in terms of his positionTheoretical expressed: the value of a merchandise, that is, the amount of any other merchandise for which it is exchanged, depends on the relative amount of work necessary for its production and not on the greater or lesser remuneration that is paid for that work.

Here two fundamental aspects are focused on the price, in terms of the price that products must have, which manifest in their theory as their shortage and the amount of work that is needed to produce it. In other words, Ricardo tends to declare that the value of goods depends on work and effort to produce a good, also on the difficulty of acquiring it. Karl Marx, a lot would be based on his theory of working value for his future jobs.

However, there are some problems regarding the value-work theory described by Ricardo, since there are goods that cannot be reproduced at all as is the case of wines, paintings, books, etc. Therefore, its value is independent of the amount of work that is needed to assess it. In the richness of ideas it is described as follows:

This means that there was in Ricardo (as there would be, even more extremely, in Marx) a metaphysical residue: the purely analytical problem of an exact measure of the value (and the possibility or impossibility of finding it) was mixed with the purely metaphysical problemto find the foundation, the ultimate origin (or, as Marx said, the "substance") of the value: and such ultimate origin cannot be found only at work. The confusion between the two problems would only be clarified by Sraffa, with its analysis of the pattern merchandise (Roncaglia, 2006, p.266).

Karl Marx, who in life was a Prussian communist, journalist, philosophy, economist, sociologist and intellectual. He was born in the year of 1818, without knowing that he would become the most important figures in our time, along with his great friend Friedrich Engels, they would be the first to give rise to scientific socialism, modern communism, Marxism, among others. In the same way, that they would write the communist manifesto, which mainly exposes the class struggle between workers and bourgeois;And another of the most famous posthumous works of him, as economics and others, is capital.

As in the development of Ricardo’s theory, Marx was slightly appointed, this is because Karl Marx was very based on this value-work theory (since he was Ricardiano) to carry out his theory was based on work andtime, which emphasized surplus value as explained in:

The theory of value he found in Ricardo was, for these purposes, obviously very adequate. This theory first places work, as a productive human activity and makes it the basis of the exchange value explanation. It is very natural to begin by exposing this theory of the value of surplus value in volume I under the assumption, according to which things are exchanged for their values (that is, work).

Marx also speaks of the merchandise in its theory of value and its importance in the exchange, such as: "It is its value that does all the commensurable goods, and that value is both hidden as a" ghostly objectivity ", andincorporated in the processes of merchandise exchange¨

In itself, Marx’s theory is specified in the value of work, adding the surplus value, which is that extra value that is achieved from a product and gives it a greater value. The problem lies, in which the worker is the one who does not benefit from the surplus value, since consequently the capitalist takes all the added value. This would generate an exploitation, in the capitalist system.

Another important element is alienation, which unfortunately produces the work in the worker, these consequences: the worker does not end up being the owner of what he generates, does not obtain the profits that are created, when part of a divided system cannot be felt that thePrudcto that I manufacture is a creation of his hands and in the end he does not feel part of the final product, so he will not feel satisfaction of the finished product.

In conclusion, you can identify how confusing that it can be to grant the value to the goods and services, this exposed based on the theories of these great figures of the economy. On the one hand, we had Smith with his value theory, which mentioned that there were two types of value one of use and another of change, while mentioning that the value of an object and its price was regulated in the market, delighting usWith a historical vision of the economic.

Instead, Ricardo was more pragmatic in his theory of value, giving importance to work. Marx, he guided his theory a lot to create the theory of value, adding the surplus value and exploitation to workers. If we put attention we continually continue this pattern of exchanging objects, using money, without seeing that complicated side that is the value of things. It becomes a mechanical process since we are accustomed to this system, something modified, however, everything used in these theories has served much for what we know today.

Bibliography

• Colander, h. L. (2006). History of economic thoughts . Madrid: Aravaca.
• Dobb, m. (1973). THEORIES OF VALUE AND DISTRIBUTION Since Adam Smith . Cambridge: Cambridge University Press.
• Harvey, d. (2010). Marx Capital Guide . Madrid-Spain: Akal .
• Roncaglia, a. (2006). The wealth of ideas . Zaragoza: Zaragoza university presses .
• Smith, a. (1776). The Wealth of Nations . Madrid: Editorial Alliance .