Ostentation-Value and Demand

Insofar as there is gratification from the response to a display of the use of an object, the object can be said to have Ostentation-Value, e. g. diamonds, anything to the use of which Veblen's 'Conspicuous Consumption' applies, etc.  Now, such Ostentation is deliberate, so among the admirers of the display is the displayer themselves.  Thus, a factor in Ostentation-Value is a self-image that is approved in some respect.  But that approval can be enjoyed virtually as well as actually, i. e. in private as well as in public, e. g. in front of a mirror, or even in one's imagination.  In other words, merely fantasizing about wearing diamonds can incorporate Ostentation-Value.  Accordingly, one of the goals of some advertising is to cultivate the Ostentation-Value of a product, i. e. to portray the use of it as approved behavior in some respect.  In other words, one of the aims of such advertising is that Demand be influenced by Ostentation-Value.  An obvious example of that influence is buying a house simply because doing so realizes the 'American Dream', while a more subtle example is buying a bottled beer for home use after viewing an ad for the drinking of it in a bar.  The apparent advertising anomaly in the latter case--the ad would seem to be for a bar--is explained by its appeal to the Ostentation-Value of merely purchasing the beer, i. e. scene in the bar signifies that drinking the product even alone at home is socially approved behavior.

Price and Value

The ultimate aim of most theories of Economic Value is to explain why people pay what they do for something.  Accordingly, implicitly or explicitly, Exchange-Value is preeminent in them.  However, there are cases in which Price itself has value.  For example, the price of diamonds usually reflects their scarcity and the difficulty in the Supply process.  But, as has been previously discussed, people pay that price in order to signify simply that they can afford it, whereby it thus functions independently as a status symbol.  Thus, Price-Value has Prestige-Value, which either exceeds the limits of standard Value-Theory, or, if classified as a type of Use-Theory, undermines the preeminence of Exchange-Value.

Prestige and Utility

Prestige-Value is the Utility of social status, i. e. the Pleasure of being admired by others.  So, the relative Utilities of diamonds and water that some Economists find paradoxical are plainly those of their respective Prestige-Values.  Equally plainly, the ranking of the two in their studies is contingent, i. e. might be very different under drought conditions, or in a society in which greed or ostentation were generally disapproved of.  Furthermore, their attention to what is a superficial comparison distracts from deeper problems--the nature of Prestige-Utility, and its relation to Vital-Utility.

Marginal Utility and Conspicuous Consumption

The fundamental premise of Marginalism is that the Utility of a commodity diminishes as the vitality of the need that it meets decreases.  Thus, the Utility of water diminishes as it is used to quench thirst, to cook with, to clean with, to comb hair with, etc.  But, then the method of evaluation to diamonds is inapplicable, except in an industrial context.  For, as is explained by the concept of Conspicuous Consumption, the Utility of diamonds consists in the achieving of some social staus.  Now, if Marginal Utility applies, that Utility is marginally greater or marginally less than that of some other use that diamonds serve.  But, there is usually no such second use, so, Marginal Utility is inapplicable to diamonds, and, hence, to the relation of its price to that of water.  Instead, the application of Conspicuous Consumption does explain that relation: the possession of diamonds signifies a more rarefied social status than does the possession of water, and that rarefied status is what some are willing to pay correspondingly more for.  So, Marginal Utility only distracts from a more fundamental problem--the relation between Social Utility and Vital Utility.

Paradox of Value and Empiricism

Beginning with Smith, Economists have studied an example that they characterize as a "paradox": that water is vital need, but people pay much less for it than for diamonds, for which there is no vital need.  One influential solution offered has been on the basis of what is called the Marginal Utility theory of Value, according to which a commodity that has multiple uses diminishes in Value, and the price that someone is willing to pay is in part determined by the least of the sequence of values.  So, because of a combination of plentiful supply and the inessentially of the use to which water is put once vital needs are satisfied, e. g. to comb one's hair, its Marginal Utility is much less than the difficult to get and usually single-use diamonds.  Indeed, based on the adequacy of this solution, some have elevated Marginal Utility to the status of best theory of Value in general.  Regardless, a different explanation dissolves the paradox.  According to this explanation, the inconsistency between Price and Value is one between, perceived Use-Value and actual Use-Value, between Appearance and Reality, between Belief and Knowledge, a distinction proposed by, notably, Aristotle and Spinoza.  However, most Economists of this tradition cannot recognize any such distinctions, since, like Smith, they are Empiricists, and, hence, accept Appearance as Reality.  Likewise, they cannot even begin to entertain the Rationalist diagnosis according to which much of what they study is, especially when there are disposable resources available, ignorant or foolish behavior, i. e. their concept of 'rational behavior' is unacceptable to Rationalists.  So, Smith's "paradox" is, according to this alternative explanation, a symptom of a fundamental methodological flaw--on the basis of which the irrationality of paying a lot for diamonds, with respect to which the value of water is irrelevant, is interpreted as 'rational', thereby creating an only apparent paradox.

Reflective-Value and Utility

Corresponding to the Personal-Value component of Labor-Value, previously discussed, is a potential component of Use-Value that can be called Reflective-Value.  The latter is the enjoyment derived from the use of a product of one's own making, including the mere contemplation of it, e. g. that of the deity of Genesis 1 at the end of the passage.  Likewise, Reflective-Utility could be a factor in a Utilitarian calculus.  However, any commitment of Utilitarianism to Consequentialism, e. g. Mill's, precludes the possibilty of that contribution.  For, as Mill insists, the process by which some object of experience is produced is irrelevant to its Utility.  Thus, so, too, is that one is oneself the agent of that process.

Labor-Value and Personal-Value

The Labor-Value of a commodity is generally conceived to be an objective property of the commodity.  However, the concept of Exploitation, according to which, that Value belongs to the Laborer whose exertion is its source, thus entails that that objective property includes components that transcend the commodity itself.  Now, insofar as the Labor that is embodied in the commodity is produced by some impersonal mechanical process, e. g. pressing a button on a machine, that additional component is similarly impersonal.  But, the more skilled the process, the more personal that component becomes.  So, just as part of a child is parental genetic factors, and a work of Art can reflect the distinctiveness of its creator, a constituent of Labor-Value can be what can be called Personal-Value.  Indeed, once that possibility is taken into consideration, Labor-Value in general can be conceived as including Personal-Value, of which an instance of apparent detachment of Labor-Value from subjective contribution is actually a special case.