The beauty of entrepreneurship
By Neil Lock
I thought it might be good to offer something a little bit up-beat for a change.
I’ve been contemplating the so called “labour theory of value.” That is, the idea that the value of an individual’s work depends only on the amount (and, in some interpretations, also the quality) of the labour put into it.
Now I’m no economist, but even I can see that the labour theory of value is a crock. The argument I use is to adapt the well known proverb, “Beauty is in the eye of the beholder.” In my version, this becomes “Value is in the mind of the buyer.” That is to say, what matters isn’t the amount or even the quality of labour the seller has put into the product, but the value to himself which the potential buyer perceives in it. The greater this value, the more the buyer will be willing to pay.