The 'Intuitive' Labour Theory of Value is Counterintuitive

The labour theory of value appears to have intuitive appeal, appeal which has infected personal, interpersonal, and social discourse, and also underlies much public policy. In this article, we trace the history of value from More, Hobbes, and Locke to Smith, Marx, and George culminating in the views of the late Milton Friedman. Then we give two counterexamples to the labour theory of value, which should demonstrate even to skeptics that the correct theory of value is the subjective theory put forward by the Austrian School. We also identify the source of the fallacy in a careless understanding of causality as first defined by David Hume. (Following 2007, when most journals began electronic versions, a decision was reached, even when copyright was owned by this author and even in the absence of an agreement to the contrary not to compete with my publishers, except in special circumstances.)