John B. Davis
Value in economics in the most familiar sense is the marketable worth or price of something given up in exchange for a quantity of goods, services, or money. Historically, there have been different views of what constitutes the basis of value and different explanations of why things have value. In early nineteenth-century Great Britain, classical economists (or political economists) Adam Smith (1723–1790) and David Ricardo (1772–1823) regarded labor as the basis for value; things had value because of the amount of labor they commanded or contained. In early twentieth-century neoclassical economics, utility was the basis of value; things had value because of the amount of utility they provided. In contemporary neoclassical economics, value does not depend on a single factor, but depends jointly on technology, resources, or endowments; and on individuals' preferences in a supply-and-demand framework that treats value as equilibrium market price. Price is determined in perfectly competitive individual ...