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Like Steven Horwitz, I'm also puzzled by the recent turn of this 
discussion.  His own contribution, separating utility from value, puzzles 
me.  He claims that, "Utility is just the economic actor's judgment of an 
object as having the capacity to help her achieve some end.  Value is what 
happens when utility meets the economizing decisions of human actors."  
This from the language of Carl Menger.  Why aren't the explanations of Adam 
Smith and David Ricardo much clearer and more helpful? 
 
Adam Smith says, "The word VALUE ... has two different meanings, and 
sometimes expresses the utility [usefulness or worth] of some particular 
object, and sometimes the power of purchasing other goods which the 
possession of that object conveys.  The one may called 'value in use' 
[i.e. utility]; the other 'value in exchange' [i.e. price when a good is 
exchanged for money]."  Because value in use or utility is subjective and 
difficult to measure, Smith goes on to devote his efforts to explaining the 
determination of value in exchange (or price) by supply  
and demand.  However, in that explanation, utility or value in use is still 
fundamental; it underlies the demand. 
 
David Ricardo echoes Smith's explanation when he writes: "If a commodity 
were in no way useful -- in other words, if it could in no way contribute 
to our gratification -- it would be destitute of exchangeable value, 
however scarce it may be, or whatever quantity of labour it might be 
necessary to procure it."  Again, Ricardo points out, "Possessing utility 
[usefulness], commodities derive their exchange value [price] from, two 
sources: from their scarcity, and from the quantity of labour required to 
obtain them." 
 
Of course, individuals may reveal their own assessments of the utility or 
worth of objects by assigning money values to them.  This is what underlies 
the notion of a demand price, which is different from a supply price or the 
market price. 
 
I find the Smithian explanation much clearer and helpful than the Austrian 
(Mengerian) attempt to distinguish utility from value, as Horwitz suggests. 
 
James Ahiakpor 
 
 
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