An Essay on Economic Theory

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Home | Mises Library | 1.10. The Price and Intrinsic Value of a Thing, in General, is the Measurement of the Land and Labor, which enter into its Production

1.10. The Price and Intrinsic Value of a Thing, in General, is the Measurement of the Land and Labor, which enter into its Production

An Essay on Economic Theory by Richard Cantillon

Tags Monetary TheoryValue and Exchange

12/01/2014Richard Cantillon

Intrinsic value can be measured by the quantity of land and laborers, taking into account the quality of land and labor. Some goods are produced almost entirely with land, others solely from labor. In the garden example, intrinsic value is both the direct expenses of the garden and the foregone value of land. Intrinsic value of a choice never changes, but market prices vary according to demand. Cantillon’s construction of “intrinsic value” should therefore be understood as the concept of opportunity cost, not the essential nature of a thing.

From Part 1: Production, Distribution, and Consumption. Narrated by Millian Quinteros.

Author:

Richard Cantillon

The honor of being called the "father of modern economics" belongs not to its usual recipient, Adam Smith, but to a gallicized Irish merchant, banker, and adventurer who wrote the first treatise on economics more than four decades before the publication of the Wealth of Nations. Richard Cantillon (1680s–1734) — a proto-Austrian — is one of the most fascinating characters in the history of social or economic thought.