Economic theory — from all schools — incorporate the concept of value. Most schools believe that the source of value comes from the good itself. Based on that belief they device them horribly inconsistent descriptions of how value affects economic decision-making.

The Austrian school alone has discovered the real source of economic value — the subjective judgments of individuals. This principle applies at all levels of the structure of production. No good has value not given to it by one or more individuals.

This principle, along with the principal of methodological individualism, turns a standard economic theory on its head. It puts the source of economic power squarely in the hands of consumers — as I will discuss under consumer sovereignty.

Only the subjective theory of value provides a consistent explanation for all value in an economic system.