Objectivist theory of value

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Part of the Philosophy series on Objectivism
Important groups Objectivist movement Ayn Rand Institute Nathaniel Branden Institute The Atlas Society Important figures Ayn Rand Nathaniel Branden Alan Greenspan Leonard Peikoff Harry Binswanger Peter Schwartz Yaron Brook David Kelley George Reisman Chris Sciabarra Special topics Neo-Objectivism Libertarianism Related Capitalism
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Note: This is not to be confused with theories of economic value, which seek to explain why things have different market prices.

The Objectivist theory of Value, as proposed by Ayn Rand, explains the worth of goods and services as a relationship between intrinsic, observable attributes in nature, human knowledge of such attributes, and how such attributes can satisfy the subjective needs of humans. The Objectivist theory of value holds the following:

Reality exists independently of perception:

see Objectivism

Reality exists independent of human perception. If humans did not exist, reality would still exist. Reality has some properties that cannot be changed; but humans can observe, learn and know what these properties are. These properties are said to be intrinsic to reality.

Humans have unique needs :

By virtue of being alive, humans have needs, which may be unique to each individual. Humans do not exist outside of reality, and have wants and needs to continue living. Some needs may be universal, like water; some needs may be individual, like hearing aids. Needs are subjective because they may change from individual to individual.

Humans survive by reason :

Unlike other animals, humans do not satisfy their needs by instinct (other than the most basic needs), but by accumulating knowledge about facts and properties of reality, and applying that knowledge to satisfy its needs.

Value is an objective relationship:

Consider the following example of a caveman in need of meat:

The caveman has a need for fresh meat.
The caveman observes that a rock falling on an animal kills it.
After many such observations, the fact that a rock has the property "kills animals", becomes part of the caveman's knowledge of reality.
Because of this knowledge, rocks become valuable to the caveman as a tool for getting fresh meat.

The value of the rock as being able to kill animals, requires both the intrinsic and the subjective to be present:

The intrinsic property of the rock of being both hard and heavy have to be present. A piece of pumice will not work.
The subjective need for meat has to be present. A hard and heavy rock will be of no value to a vegetarian (although the rock may be of value as a grindstone to such a person).

Therefore value is not a quality contained solely in the object, or solely in the mind of the human, but is a relationship between the intrinsic facts of reality, and the subjective needs of humans. The value is said to be objective because for one particular human, under one particular set of circumstances, the value of an object will always be the same to that human.