Value is a word used in a number of senses. It is in current, use for both moral and economic degrees of appreciation. It is frequently confused with price, which is very similar, but the latter denotes a measure of value quoted in some acceptable medium of exchange, generally money. In economics, the theory of value is held to be the central doctrine of the science, but it has been so variously defined, and has been the subject of so much controversy, that its special importance has fallen into the background and its usefulness disputed. The labour theory of value, initiated by Sir William Petty, was developed by Locke and Adam Smith, and ultimately defined by Ricardo. The term labour as originally used was intended to cover all efforts and sacrifices involved in the production of goods, and with this qualification labour under primitive production accounted for and roughly measured the amount of value in any given object. It implied some utility and some scarcity, but looked predominantly to labour-cost of production as the chief constituent of value.
The surplus-value theory was originated by William Thompson, an Irish socialist, and the term surplus was used by Malthus in connexion with profits and rent. It waa the product of the factory system, which appropriated the term labour to the hand-work of the wage-earning classes. It was a perversion of the labour value theory of Ricardo, asserting that the revenues accruing in rent, interest, and profits were obtained by exploiting the labour of the poor, who were the sole creators of value.
The demand theories of value envisage the problem from the side of the buyer rather than of the producer. The English school (Jevons and Marshall) took a common-sense but not scientific view, that value was determined by final or marginal utility - that is to say, the desirability of the last object of a series sold to a last remaining buyer in the given market at a given price. This theory is descriptive but not explanatory. As Cassel has pointed out, the term marginal utility itself is a mistaken attempt to combine in one expression the two incompatible ideas of scarcity and desirability, the latter being a quality of the object in question, the former an outside circumstance. The Austrian school of economists have carried the analysis of the mental attitude of the buyer to an extreme point.
Micro-economic theory shows that in a well-functioning market system, the price of an item reflects the value of the last unit sold and bought. Value added by a firm is that part of the gross value of its output that has been created by the firm in question. In other words, it represents revenue minus the input costs of raw materials, bought-in services, and semi-finished items. *Vertical Integration
Vertical integration is an industrial structure involving unified ownership or control of two or more stages of production. Complete vertical integration means that a company controls a production process from start to finish: from the extraction of raw materials to the final retail sale. Vertical integration may be achieved through organicgrowth, or through merger or take-over. There may be significant economies of scale from vertical integration, but it may also lead to monopoly power. Well- known historical examples of vertically integrated firms were the major multinational oil companies such as BP, Exxon, and Shell, before the 'OPEC' revolution of 1973 to 1974 deprived them of control over major sources of crude oil. Research Value
Voting shares are shares in a company that entitle their owner to vote at the annual general meeting and any extraordinary meetings of the company. Shares that carry voting rights are usually ordinary shares, rather than A shares or debentures. The company's articles of association will state which shares carry voting rights. Research Voting Shares
The Probert Encyclopaedia was designed, edited and programed by
Matt and Leela Probert
Abbreviations
Money
Research Value
