Value

determined by the value of inputs (labour) and its difficulty to produce

Classical theory of value

A commodity must have use value for it to be produced but it is then the difficulty of production which determines value

Smith

Adding-up Theory issue in modern society?

circular problem

Ricardo’s addition to labour theory (general)

Scarcity, labour likely to be heterogenous, capital = embodied labour from the past

rent rises due to cultivation of inferior quality land

Ricardo on rents

What determines wages in Classical theory

Subsistence level

Marx’s addition to labour theory

Necessary and surplus labour

Issue with Marx’s analysis

Transformation problem

Marginal Revolution in a nutshell

Value depends on utility which is subjective

Relative prices equal relative utility

Menger

Utility at the margin which determines individual value

Menger

Prices paid to land, raw materials, capital, etc. reflect each respective contribution to production

Menger

MU = P, wage = marginal disutility, MC = P, diminishing marginal productivities

Marshall

Distribution theory taking on both a marginalist and classical stance

Marshall

Viewed land as the only source of value

Physiocrats

things could be classed as productive so long as they fetched a price

Marginalists

greatest happiness of the greatest number that is the measure of right or wrong, consequentialist view

Bentham