Three elements are fundamental to defining the value of a product or activity: scarcity, usefulness and the precise working time required to generate a product or perfect a skill. It is very unusual for something to acquire value for only one of these elements, the three or at least two of them are the ones that give value to a thing. The value is also determined by the context; for example, water will always have a high utility but its value will depend on its scarcity, on whether we are in a desert or a lake city.
Scarcity is essential to determining the value of something. Some precious stones have practically no objective usefulness, but if they are rare to find they quickly acquire a subjective value precisely because of their rare and unknown. Almost any uncommon and rare object or product can be endowed with subjective value as a symbol of social prestige or a way of accumulating monetary value. Thus, for example, shells or gold are easily transformed into jewelry or money if in the context in which we move these products are scarce. In a world where the soil instead of being made of sand is made of diamonds, these would have no value.
The scarcity also explains the exorbitant salaries of elite athletes. Anyone can kick a ball but few can handle it with the skill and strategic sense of famous football players like Messi or Cristiano Ronaldo. Although an architect may perform an activity that is objectively more useful than an athlete, it is also true that there are more average architects than excellent football players. Logically, the value of the activity carried out by the sportsman is not only scarce but also has a subjective value in our society, we can say that such activity is socially valuable as a means of entertainment. Although certain abilities are scarce, this does not mean that they are endowed with value; if someone is capable of wielding a sword with special skill, the value of that activity will be strongly influenced by the usefulness of that skill in a given environment. We understand this by the example of the football player, in a society where the predominant sport is different from football, the value of a top player will decrease enormously.
Another factor to add value to things is utility. There are things that have an objective usefulness such as water, air, food... and others that have a more subjective degree of usefulness; which activity is more objectively useful that of the farmer and the farmer or the renowned concert performer? For the satisfaction of primary needs, the former is undoubtedly more useful, but the monetary value that our society gives to a farmer's activity is much less than that of an exceptional cellist. But the value of the latter is not only based on objective utility but also on a social value; in addition, there are many people capable of working as day labourers and few capable of playing an instrument with high mastery, this brings us back to scarcity as an element to consider in order to weigh the value of the activities of the primary sector worker and the distinguished musician.
The idea that utility is a factor that determines the value of an activity or product has been rejected by many economists, especially those that do not belong to the Austrian school of Economy. Certainly the concept of utility is highly evanescent and some people call it metaphysical, nonetheless, they do not take into consideration the fact that the economy is a social science, meaning that men are the ones that establish the parameters according to their needs, therefore the value is subjugated to the point of view of every person in an economic system. Nothing is more valuable than air, but who values it? Men, What's the price? Objective value, utility and monetary value become confused and do not lead us to any clear conclusion, especially if we bear in mind that except for the things that satisfy the most primary needs such as hunger, thirst, breathing, maintaining body temperature and some others, most useful things have a strongly subjective character. In any case, if today's air has value it is, as we said, for its usefulness and if it is not valued it is, precisely, for its abundance and ease of access.
Finally, according to the supporters of the labor-value theory, the value of a commodity or activity is measured by the time invested in it. A jewel may have a certain degree of subjective usefulness and be made of scarce material, but what makes it so worthwhile is the time invested in it. Working time is not only the time the jeweller has spent in making it, but also the time it has taken to find the precious material, extract it and transport it. The most ardent supporters of this theory assume that scarcity and utility are accidental or irrelevant in determining the value of an object. If the water is scarce, it has to be brought in from farther away, which means working time in its manual transport or working time in the form of engineering works and infrastructure maintenance. Air has no economic value because no work is needed to enjoy it.
Some professions have a higher value and better pay for a variety of reasons, as discussed above, but also because learning them requires more or less preparation time. A mason's pawn and an engineer are equally necessary for the construction of a bridge; but while the engineer needs a long period of study and preparation to become one, the pawn does not. Lifetime spent in being able to develop an activity, such as a profession, or to generate a product, would, therefore, be essential elements in determining its value.
Scarcity, usefulness and working time seem to be the elements that determine the value of something. We cannot establish the value of an activity, commodity or raw material with just one of the three. Why is oil worth what it is today? If it is scarce it will be worth more, if it is necessary and useful to carry out productive tasks it will be the same, finally, the more time and effort it takes to extract and transport it, the more valuable it will be. In short, even when context and social subjectivity influence the value of something, it is also true that practically any product or activity acquires value through the factors analyzed.
