Value is subjective. This is one of the cornerstones of modern economics. What’s known as the “marginal revolution” of the late 19th century was responsible for bringing the axiom from intellectual musing to orthodox dogma. Three economists – Leon Walras, Stanley Jevons, and Carl Menger – each independently came upon the breakthrough known formally as the theory of marginal utility. As Menger wrote in his Principles of Economics,
[V]alue is therefore nothing inherent in goods, no property of them, but merely the importance that we first attribute to the satisfaction of our needs, that is, to our lives and well-being
While these three thinkers developed a systemized method of understanding individual value, it was an extension of the decades-old thinking of French statesman Anne Robert Jacques Turgot. Previous to Turgot’s assertion, earlier economists such as Adam Smith and David Ricardo struggled with the concept of utility in relation to preference. The diamond and water paradox (the evidential truth that diamonds entail a higher price than life-sustaining water) was reasoned through as a disparity in labor costs. The preeminence of subjectivity in the mind of the purchaser solved the peculiar dilemma, laying the groundwork for a more methodological framework for analyzing market economies.
Ludwig von Mises would take the ideas of Menger and develop a larger, more encompassing theory of economic activity as a subset to the larger science of human action, dubbed praxeology. By reasoning that all men act to achieve ends, and that those ends are necessarily subjective, Mises was at the forefront of establishing a framework that adequately accounted for why markets come about as they do. This new line of thinking about human interaction purposefully disregarded normative judgements of resource functionality.
Mises, in line with the wertfreihei teachings of social thinker Max Weber, thought all science should be value-free. As he wrote in Theory and History, assertions of “truth and falsity” must not “be confounded with judgments of value.” This was a strange claim in itself, as it’s essentially an “ought to be” statement on science. It’s similar to the doctrine of scientism that postulates only the empirical method of testing is adequate to determine verity, even though the credo rests upon the deduced logic of evidence being truth.
Economics in the Austrian tradition postulates that deductions be free of value judgments. The science is to be descriptive rather than prescriptive. In his advocating for free markets and the minimal state, Mises was an adherent of utilitarianism – that policy is best which generates the most wealth for society. He firmly rejected any contention of natural law, arguing that “[I]t is useless to emphasize that nature is the ultimate arbiter of what is right and what is wrong.”
In a word, he was wrong. Or at least I disagree, along with a whole host of thinkers (most notably Murray Rothbard) who regard economics as normative-free but see objectivity in ethics. But if value is subjective, doesn’t that also mean “good” and “bad” are subject to the same personal whims? I would argue no.
Reality and humanity exist, and certain laws can be deduced using man’s inherent reason. Everything has a nature which defines its existence. As Aristotle understood, “[T]hings have a nature which have a principle of this kind. Each of them is a substance; for it is a subject, and nature is always in a subject.” Nature is discoverable in different things, of which some aspects are self-evident. Because man is endowed with the capacity for understanding self-ownership and the very ability to conceive of possession, he has a right to his body and those objects he may appropriate to himself. This is rationally deduced through inquiry into humanity’s specific nature.
Man also has the natural cognitive ability to differentiate between what is good and bad – not just from a material perspective but also morally. For instance, theft, which must presuppose ownership of goods in order to occur, is a blatant violation of another’s possessions. In the same vein, aggression is an affront on the Being of another. Logically, it must be asked why one person, in full realization of their human ability, is at all justified in physically assaulting another. Intuitively, it could be the case that such an act appears wrong. Yet if reactionary force were at all good and productive, mankind would still be wallowing in caves, living hand-to-mouth. Rationality does not just dictate that non-defensive coercion is wrong, but also that it breaches the boundary that separates humanness from that of the animal.
In his Groundwork of the Metaphysics of Morals, Immanuel Kant concludes through deductive, a priori reason that men have moral agency and must act in accordance with categorial imperative: that every action, if made law, is to be universal in nature. He uses the simple, isolated telling of a lie to demonstrate that if taken to its full extent, it would render all truth worthless and social interaction impossible. If men and women cannot be honest with one another, it becomes difficult for communities to thrive. This isn’t to say that dishonesty should be outlawed. Rather, it’s the wrong thing to do when your natural humanity recognizes the rift between honesty and deceit.
The systematic order of the world can be easily viewed within the physical sciences such as biology. Discovering the natural workings of humanity takes a great deal more effort, including careful introspection. From this soul-searching, universal law can be determined that applies at all times for man. The theory of natural law was best defined by catholic theologian George Weigel as, “the claim that…there is a moral logic built into the world and into us: a logic that reasonable men and women can grasp by disciplined reflection on the dynamics of human action.”
The bedrock of order is derived heavily from the apparent fact that individuals act with free will. Without this liberty in choice, the rights of man would fail to stand up under scrutiny. Logically, to behave wrongly for humans must also entail a less evil alternative.
In the more spiritual sense, God only released man from the Garden of Eden because the fall from grace was Adam’s choice. The free will bestowed upon man was given as a gift of God, and it is what allows humanity to act autonomously. As philosopher Frank Van Dun writes, “the expulsion was not so much a punishment for the sin of disobedience as the necessary and just price of coming of age and acquiring the power of moral discrimination.” Eating the forbidden fruit from the Tree of Knowledge of Good and Evil was ultimately a demonstration of the choice for all individuals – either follow the divine natural law or risk eternal damnation.
While it’s true that individual value is subjective in the end, adherents of natural law do not see “the good” as relying on the same kind of predication. Good and bad exist regardless of the choices people make. They can be followed or disregarded. For some, attaining virtue is preferred over deviousness. To others, unscrupulous behavior is a far better avenue to achieve satisfaction. The vast majority of mankind, I would argue, acts generally well to maintain stability in their livelihood, but fails at staying the course in terms of acting morally at all times. And of course, the acceptance of the state – the violently upheld monopoly of societal coercion – as a legitimate institution corrupts all notions of property ownership.
Though followers of the Austrian school of economics are quick to note the betterment of living standards under conditions of free market capitalism, this does not reflect a rampant materialism. There is more to existence than being the first to purchase the newest of high-definition televisions. And while having food, shelter, and your general health taken care of is a necessity of living a full life, the thirst for wealth risks devolving into solipsism – which can be more dangerous to society’s long-term flourishing than the threat of famine.