Ayn Rand and Böhm-Bawerk on Value
27 June, 2012 Leave a comment
I am currently reading Eugen von Böhm-Bawerk’s Basic Principles of Economic Value (first published in German in 1886), and I was struck by how close his thinking on “value” is to Ayn Rand’s thinking.
To recapitulate: Ayn Rand claimed that value is neither “intrinsic” nor “subjective”; a value does not reside in an object as apart from the valuing subject; neither does it reside only in the subject as apart from the object valued; it denotes a relationship between the valuing subject and the object that is valued. In her own words:
There are, in essence, three schools of thought on the nature of the good: the intrinsic, the subjective, and the objective. The intrinsic theory holds that the good is inherent in certain things or actions as such, regardless of their context and consequences, regardless of any benefit or injury they may cause to the actors and subjects involved. […] The subjective theory holds that the good bears no relation to the facts of reality, that it is the product of a man’s consciousness, created by his feelings, desires, “intuitions,” or whims, and that it is merely an “arbitrary postulate” or an “emotional commitment”. […] The objective theory holds that the good is neither an attribute of “things in themselves” nor of man’s emotional states, but an evaluation of the facts of reality by man’s consciousness according to a rational standard of value. […] The objective theory holds that the good is an aspect of reality in relation to man – and that is must be discovered, not invented, by man. Fundamental to an objective theory of values is the question: Of value to whom and for what? (Capitalism: The Unknown Ideal, p. 21f in the paperback edition.)
And here is what Böhm-Bawerk has to say on the same subject:
[E]conomic value is neither an objective quality inherent in goods, nor is it a purely subjective phenomenon that resides in the inner self of man. Instead, it is a particular relationship between an individual and an object. If I call this concept “subjective value”, I do not mean to deny the existence of objective factors. (P. 15.)
The only thing that might be misleading or confusing here is that Böhm-Bawerk talks about “an objective quality inherent in goods”, for something that Ayn Rand calls intrinsic. But this is merely a semantic difference, not a difference in substance.
I should mention that I had some quotes from this book, even from the same chapter, in my essay Objectivism versus “Austrian” Economics on Value; but I completely missed this paragraph. I guess I owe Böhm-Bawerk a belated apology for having missed this important and very true point.
Böhm-Bawerk died in 1914, when Ayn Rand was only 9 years old; had he read the quote from Ayn Rand above, I think he would have grasped the point and agreed with her.