ABSTRACT: The subjective theory of value is one of the central tenets of Austrian Economics—but what of its status under Objectivism? As we know, there is no room for subjectivity under Objectivism. How are the two to be spliced? I am here to provide the integration of the Austrian’s subjective theory of value under Objectivist principles.

Here is a summary of the categories of property used in this Tangy:

1. The subjective theory of value is central to the Austrian Economic tradition.
   a. It contrasts with the labor theory of value, asserting that value is based on human preference rather than intrinsic to the object.

2. Subjective, as per Carl Menger, refers to value being mind-dependent and variable based on individual preferences.

3. The notion of subjectivity implies a false dichotomy between subject and object.
   a. Consciousness is an attribute of an entity, not a separate entity itself.
   b. Rejecting the mind-body dichotomy clarifies the nature of consciousness and its relation to objects.
   c. Consciousness is dependent on an entity and cannot exist independently.

4. The Austrian School critiques the Classical School's labor theory of value.
   a. Value is anthropogenic, born of man, and integrated with his nature.
   b. Value is tied to human action, with means being reason and the ultimate end being alleviation of unease.
   c. Value scales are established through action, reflecting objective preferences.
   d. Price reflects relative scarcity, not intrinsic value, and does not measure subjective valuation.

5. There is no dichotomy between economic and ethical values; both study what man acts to gain and/or keep.

6. The Austrian theory of value emphasizes its relation to man and his actions.

7. Proposed names for the theory include the Austrian Theory of Value or the Anthropogenic Theory of Value.

The subjective theory of value is one of the most important building blocks of the Austrian Economic tradition. The question of value in the science of economics has been long fought, we may split it into two major factions. The first faction states that value is based on the amount of labor needed to produce it, and is intrinsic to the object at hand^[1] (the labor theory of value). The second faction states that value is based on human preference—that value is dependent on a valuer to value it in the first place^[2] (the subjective theory of value).

Why the labor theory of value is incorrect is a discussion for another day, but what is essential is what is meant by ‘subjective’ in this context. Subjective, according to the Austrian School of Economics is to mean: a personal or individual sense in which an action^[3] is mind-dependent. Per Carl Menger^[4]:

When I discussed the nature of value, I observed that value is nothing inherent in goods and that it is not a property of goods. But neither is value an independent thing. [...] The measure of value is entirely subjective in nature, and for this reason a good can have great value to one economizing individual, little value to another, and no value at all to a third, depending upon the differences in their requirements and available amounts. [...] Hence not only the nature but also the measure of value is subjective. Goods always have value to certain economizing individuals and this value is also determined only by these individuals.

Here, we see Menger address two points of value. (1) Value is extrinsic—value is dependent on a subject (with the capability of valuing) to give the object any value in the first place. (2) The measure of value is subjective, dependent on the valuer (human-action). We can understand what is meant by subject by analyzing the essential characteristic of the labor theory of value, which states value is intrinsic to the action of labor, and therefore the object created by the labor. The subjective theory of value therefore states value is extrinsic to the object and dependent on a subject—a subject then means a conscious entity with the capability of valuing.

This is the first and primary definition of subjective everyone knows and comes to know—mind-dependant—while objective is to mean object-dependent. But there are inherent issues implied by this definition—this being that a subject is an object. If an object is to mean any material entity that exists and has a particular identity that differentiates it from another material entity that exists and has a particular identity, then the subject must be an object.

What would it mean for the subject to not be an object? We would never know, because all conceptualizable things must be a particular nature to even be conceived of.

A concept is an integration of two or more units to create an integrated whole^[5]. Even a unicorn, while not actually having any form of concrete referent, is based on real existing objects that have a particular nature. For one to even conceptualize a unicorn, one must know what a horse looks like, then a horn, then the color white, etc. The concept of a unicorn, while not having concrete referent^[6], is still based on an integration of real-world objects—of two or more units^[7]. What would it mean to conceptualize of an entity based on no integration of objects at all? It destroys the entire point of a concept. This is even worse than just a mere floating-abstraction—it is an attempt to conceive of an object while rejecting the proper means to even conceptualize and denying an integration of objects altogether. This means that there is an erroneous false dichotomy that pervades the realm of not just economics, but of objectivist epistemology and metaphysics. This dichotomy evades the task of defining just what exactly differentiates a subject from an object.

We have established that a subject is an object—that there is no dichotomy—what of the status of consciousness then? Consciousness is a non-material existent—is it an object? This question requires a fundamental understanding of Objectivist metaphysics.

Objects—or entities—are that which are independent, self-sufficient existents. Picture a simple brick: this is a self-sufficient existent—it can exist independently as its own object. In a linguistic sense, a brick may be called a noun—it is an independent entity that would be classified as a ‘thing’. Of course, it would be nonsensical to state ‘This wall is so brick’—this is because brick is not an attribute of the entity that is a wall—it is a noun.

Adjectives—or attributes—are that which are dependent upon an entity—that is, they are dependent upon the entities of which they are an attribute of. To demonstrate further, an entity may exist justifiably as an independent absent of attributes to describe it. Attributes are those that describe entities. These are only justifiable in relation to the entity at hand (on-fire, red, the color, and smooth). Entities are the primary, and attributes are secondary. If we were to state ‘This wall is so hard’ it would justifiably make sense. To put this into perspective, we are saying ‘This [entity] is so [attribute of entity]’. When we state that something is hard, we are referring it in relation to an entity. This means we are unable to say just ‘Hard’ in a vacuum—hard in relation to what? Stating *‘Hard’ without referring to what it is hard would beg the question ‘Hard? In relation to what?’ It is because adjectives are dependent entities that they must be in relation to something.

How does this answer the question of consciousness? Consciousness is an attribute of an entity. To put this in perspective: consciousness is the attribute of being aware—consciousness cannot exist independent of (1) someone to be conscious, and (2) something to be conscious of—of some entity. To dispute this would be to imply a consciousness conscious only of itself—per Ayn Rand^[8]:

If nothing exists, there can be no consciousness: a consciousness with nothing to be conscious of is a contradiction in terms. A consciousness conscious of nothing but itself is a contradiction in terms: before it could identify itself as consciousness, it had to be conscious of something. If that which you claim to perceive does not exist, what you possess is not consciousness.

This is to say, consciousness fills all the qualifications for an attribute—it cannot exist on its own, it is dependent on an entity to possess it and an entity to be perceived. Consciousness too begs the question of ‘conscious of what?’ because of consciousness’ dependent nature.

We can now say that consciousness is an attribute of an entity, or, in the layman's terms, the subject is an attribute of an object^[9]. I am then here to attempt to state what the Austrian School of Economics is referring to is rather an attribute of an object, which the object is able to conceptualize & evaluate. A consciousness is an attribute of something—this being man, who is an object—an entity with a specific nature. What would it mean to say that the subject is not an attribute of the object—that the subject and the object are two separate entities that may be separated? This is known as

the mind-body dichotomy—that there is some sort of dichotomy between the mind and the body. Ayn Rand dubs these the mystics of spirit and the mystics of muscle^[10]:

[T]he mystics of spirit and the mystics of muscle, whom you call the spiritualists and the materialists, those who believe in consciousness without existence and those who believe in existence without consciousness. No matter how loudly they posture in the roles of irreconcilable antagonists, their moral codes are alike, and so are their aims: in matter—the enslavement of man’s body, in spirit—the destruction of his mind.

The enduring dualism of mind and body rests upon a shaky foundation, obscuring the true nature of consciousness. We can readily recognize the fallacy of attributing independent existence to an attribute. Redness, for instance, cannot exist in isolation; it requires a substance to embody its quality. Similarly, to posit consciousness as a self-sufficient entity, divorced from the physical entity that enables its very existence, is conceptually unsound. Can we truly imagine thought occurring in a vacuum, untethered to the fundamental object that underpins it? Such a claim bears the same illogicality as asserting the independent existence of redness without an object to display it.

So, to summarize, man is an object, such an object contains an attribute known as consciousness—the attribute of being aware. The attribute of consciousness is an attribute of an entity and cannot exist independently of it. It is not merely mind-dependent, nor is it merely object-dependent—instead, value is in relation to man as an integrated figure. What makes up man is many things, the brain, and it’s attribute consciousness is one of the many attributes that make man what he is—his heart, his lungs, his senses. There is just as much a dichotomy between mind and body as there is heart and body, or lungs and body.

It should now be clear that whatever the Austrian School of Economics is referring to, it is not subjectivity. What is it that Carl Menger was attempting to point out here was what exactly the Classical School of Economics was attributing the origin of value to in their Labor Theory of Value. As stated earlier, the Classical School of Economics states value is intrinsic to the entity of value, rather than intrinsic to the entity that is performing the act of valuing in the first place—it is putting the cart before the horse.

What the Austrian School of Economics did not benefit from, however, does not come from any improperness in the theory itself, but the proper philosophy to analyze just what subjective, and objective truly means in relation to a proper philosophy^[11]—what the terms imply. As I have demonstrated, what the chosen terminology means in relation to objectivism shows a grave fallacy that must not be overlooked for the sake of a fully integrated system of science and philosophy. So, what is the solution?

Value is value qua man, and is anthropogenic. Let us break down what this means. Anthropo, as derived from the Greek word anthropos (man)—genic, as derived from the Greek word génos (born). This is to mean that values are man-born^[12] or man-produced. When we refer to man, we refer to him as an integrated creature—this is to say, we refer to man as the full sum of what he is. Man is his body and his mind, and all of the rest of the organs he possesses. Just as value cannot be valued without a mind to value, a mind cannot exist independent of this body—as we have discussed in great detail about.

We have established the nature of a valuer—this being man as an integrated creature, but this prompts are more fundamental question: what is value? Well, values are that which man acts to gain and/or keep—let’s unpack that. We understand the fundamental axiom of praxeology is human-action—that man acts. A fundamental characteristic of all human-action is that all human-action is directed towards some end—action means the employment of means for the attainment of ends^[13]. Per Ludwig Von Mises^[14]:

Human action is purposeful behavior. Or we may say: Action is will put into operation and transformed into an agency, is aimed at ends and determined by ideas. It is the adjustment of the conditions of the universe to the ends of man. The incentive that impels a man to act is always some uneasiness. A man feels uneasy. He imagines a more satisfactory state, and his action aims at transforming the former into the latter. As long as he believes that this more satisfactory state can be attained by some action on his part, he acts.

Mises asserts that the fundamental axiom of praxeology (the study of human action) is that humans act. In other words, humans are not passive beings but are constantly engaged in purposeful behavior. Human action is always directed towards achieving some end. Every action taken by an individual is a means to an end, where individuals consciously aim at specific ends and goals. Unlike reflexive or involuntary responses, human-action involves conscious decision-making and deliberate effort towards achieving desired outcomes. Whenever man chooses his desired course of action, then, he must first be aware of the ‘why?’ In particular, he must focus on a particular end to be satisfied. To validate this, we need merely to introspect our own thought processes.

A fundamental characteristic of both action and values is uneasiness. Man, as a rational being, acts to achieve goals through the manipulation of entities and their attributes. This pursuit stems from a fundamental urge to eliminate disvalue and attain a state of ultimate ease. Reason, the faculty that identifies and integrates the material provided by man’s senses^[15], becomes the primary means to achieve this end—it is the ultimate means. Such a faculty leads him toward a life guided by rational self-interest and the pursuit of happiness.

To summarize, man acts, man's action is purposeful behavior, man's means are reason and his end is easiness. Value is demonstrated through the fundamental choices of a volitional being—it is demonstrated through action. Man may value many entities of desire, but his ultimate end—alleviating unease—is gained and/or kept through his ultimate means—his reason. The root of uneasiness is scarcity—he cannot immediately satisfy his ends so willy-nilly. If scarcity did not exist, there need not be a code of ethics to guide him in utilizing the ultimate means to the ultimate end. Man possesses the unique ability to envision a vast spectrum of desired outcomes (ends). However, the scarcity prevents him from pursuing all these ends simultaneously, or even experiencing them within his finite lifespan. This necessitates the principle of trade-offs: to maximize his life-satisfaction (easiness), man must prioritize certain ends over others based on their relative value.

We call this prioritization of one end over another a value-scale. Value-scales are also demonstrated through action. When man utilizes a specific entity of means toward a specific end, he has established an objective preference—he objectively values one end over another as established through action. This value scale is ordinal^[16], to what extent man values one of his desired ends over another is not only immeasurable but an invalid question. That value is ordinal does not make it subjective either—objectivity does not rely on all things having a tangible nature that can be measured^[17]. Ordinality does not state that there is a subjective measurement to be had in relation to what extent man values a desired end over a less desired end, rather, it states the question of ‘to what extent?’ is invalid to be asked. Asking how much the color red weighs.

Price is also not an attempted measurement of value, instead, it is a medium of exchange, facilitating trade by reflecting the relative scarcity of goods and services. Imagine bartering: you might trade 10 apples for a pair of shoes, but the price of 10 apples for the shoes does not measure the extent to which you value the shoes over the 10 apples. To demonstrate how preposterous this is, we must ask the question ‘to what extent do you value the end over the price?’ Just like the length of a shadow tells us about the position of the sun, not the sun's size, price tells us about relative demand and supply, not intrinsic value.

A final point to make is that value is value—A is A—there is no “Economic value” and “Ethical values”, only value. These two sciences study different aspects of the same coin. Values, whether we are referring to praxeology or ethics, is always that which man acts to gain and/or keep. Praxeology, and its daughter-science Economics, study human action as it is—it does not tell us the properness of our ends, this is the task of Ethics. Ethics tells us the properness of our ends/values. A concrete understanding of this is in the case of a man's choice to check the mail. Praxeology tells us his end he acts to gain and/or keep (to check the mail), his means (him walking down the street to the mailbox), and his preferences (his value of checking the mail over the negation of checking the mail). Ethics tells us if his desired end he acts to gain and/or keep is proper (if he ought check the mail)—it is the correctness of the action at hand. But, at the end of the day, Praxeology and Ethics are still both studying the same thing—that is what man acts to gain and/or keep—there need not be any dichotomy between Ethical values and Economic value.

It should be clear now that what the Austrian School of Economics is referring to when they state value is subjective is that it is in relation to man. Our last question would be ‘what is our theory of value now?’ And while I am not a connoisseur in naming things, two ideas come to mind. Since this is an Austrian theory, it should very well be named the Austrian Theory of Value, as to attribute the modifier to the School of Economics who discovered the theory. But if you’d like a modifier that has less to do with who made the theory and more with what the theory entails, the Anthropogenic Theory of Value is a mouthful, but it sure does make you sound quite intelligent.

from An Anthropogenic Theory of Value, written by Stratino Lampino