1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar

The Ludwig von Mises Institute

Advancing Austrian Economics, Liberty, and Peace

Advancing the scholarship of liberty in the tradition of the Austrian School

Search Mises.org

Previous Section | Next Section
Table of Contents


Use Value and Exchange Value

THEODOR BERNHARDI (VERSUCH EINER Kritik der Gründe die für grosses und kleines Grundeigenthum angeführt werden, St. Petersburg, 1849, p. 79) says that it has frequently been noted in recent times that Aristotle had already mentioned the difference between use value and exchange value in his Politics (i. 6.), and that Adam Smith distinguished between the two concepts independently of the Greek philosopher. Against this, it must be said that the greater part of Adam Smith’s famous passage (An Inquiry into the Nature and Causes of the Wealth of Nations, Modern Library Edition, New York, 1937, p. 28) coincides almost word for word with a passage in John Law’s Money and Trade Considered, London, 1720, p. 4. Moreover, A.R.J. Turgot (“Valeurs et Monnaies” in Oeuvres de Turgot,ied. by G. Schelle, Paris, 1913–23, III, 86–93) not only makes a sharp distinction between use value and exchange value (valeur estimative and valeur échangeable) but goes into the matter in considerable detail. Also of interest for the history of doctrine is a passage in the work of the Scottish moral philosopher Francis Hutcheson, the famous teacher of Adam Smith, in which a differentiation between use value and exchange value can be found, although not in the terminology employed by Smith (F. Hutcheson, A System of Moral Philosophy,London, 1755, II, 53ff.; see also John Locke, “Some Considerations of the Consequences of lowering the Interest and raising the Value of Money,” in The Works of John Locke,London, 1823, V, 34ff.; and G.F. Le Trosne, De l’intérêt social, Paris, 1777, pp. 7–8).

     More recently, several writers mentioned in Appendix D (pp. 298)—Friedländer, Knies, Schäffle, Roesler—who have made the theory of value their special subject, have dealt at length with the difference between use value and exchange value. Others that should be mentioned are Otto Michaelis, “Das Kapitel vom Werthe,” Vierteljahrschrift für Volkswirthschaft und Culturgeschichte, I (1863), 1–28; A. Lindwurm, “Die Theorie des Werthes,” Jahrbücher für Nationalökonomie und Statistik, IV (1865), 165–218; Julius v. Soden, Die Nazional-Oekonomie, Leipzig, 1805–10, I, 38ff. and IV, 23ff.; Gottlieb Hufeland, Neue Grundlegung der Staatswirthschaftkunst, Wien, 1815, I, 95ff.; Henri Storch, Cours d’économie politique, St. Petersbourg, 1815, I, 57ff.; J.F.E. Lotz, Handbuch der Staatswirthschaftslehre, Erlangen, 1837, I, 21ff.; Karl Rau, Grundsätze der Volkswirthschaftslehre, Heidelberg, 1847, pp. 73ff.; Theodor Bernhardi, op. cit., pp. 67ff.; Wilhelm Roscher, Grundlagen der Nationalökonomie, Twentieth Edition, Stuttgart, 1892, pp. 9–16; Karl Thomas, Theorie des Verkehrs, Berlin, 1841, p. 11; and L. Stein, System der Staatswissenschaft, Stuttgart, 1852, I, 168ff.

     Perhaps nothing reveals the German tendency toward philosophical penetration of economics and the practical sense of the English better than a comparison of the treatments given the theory of value by German and English writers. Like Adam Smith, David Ricardo (Principles of Political Economy and Taxation,ed. by E.C.K. Gonner, London, 1891, pp. 361–369), Thomas Robert Malthus (Principles of Political Economy, London, 1820, p. 51, and Definitions in Political Economy, London, 1827, p. 234), and John Stuart Mill (Principles of Political Economy, ed. by W.J. Ashley, London, 1909, pp. 436–437) employ “value in use” as synonymous with “utility.” Indeed, Robert Torrens (An Essay on the Production of Wealth, London, 1821, p. 8) and J.R. McCulloch (The Principles of Political Economy, London, 1830, p. 4) even employ the term “utility” instead of “value in use.” Among recent French writers, the same thing is done by Frédéric Bastiat (Harmonies économiques, in Oeuvres complétes de Frédéric Bastiat, Paris, 1893, VI, 141). Lord Lauderdale (An Inquiry into the Nature and Origin of Public Wealth, Edinburgh, 1804, p. 12) and N.W. Senior (An Outline of the Science of Political Economy, London, 1836, pp. 6ff.) recognize utility as a prerequisite of exchange value, but not as use value, which is a concept they repudiate altogether. What is understood in England by the concept exchange value is best illustrated by the following passage from John Stuart Mill (op. cit.,tp. 437): “The words Value and Price were used as synonymous by the early political economists, and are not always discriminated even by Ricardo. But the most accurate modern writers, to avoid the wasteful expenditure of two good scientific terms on a single idea, have employed Price to express the value of a thing in relation to money; the quantity of money for which it will exchange . . . the value or exchange value of a thing, [we shall, therefore, understand] its general power of purchasing; the command which its possession gives over purchaseable commodities in general.”

[1]To Chapter VI. See note 2 of Chapter VI.—TR.

Previous Section | Next Section
Table of Contents