Principles of Economics by Carl Menger Chapter 3 2B - The Value of Goods for Individual Needs

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Why does a bucket of water sometimes have no value—and other times mean life or death? In this video, we explore Carl Menger’s powerful explanation of how the value of goods is tied to the needs they help satisfy. This is Chapter 3.2B of "Principles of Economics", rewritten in simple language for anyone curious about how value really works.
You’ll learn why value is never fixed, and why it’s wrong to think that goods are valuable on their own. Instead, Menger shows us that value depends on context—how urgent our needs are, and how much of the good is available. Whether we’re talking about grain, water, or gold, their value comes from the importance of the last need they fulfill.
Through thought experiments with island survivors, farmers, and shipwreck victims, this chapter explains the subjective nature of value and introduces the core idea of marginal utility—a concept that would become central to all of Austrian Economics.
Whether you're new to economic theory or deep into the Austrian School, this breakdown will help you understand the real meaning of economic value in a way that's both practical and profound.
📚 Based on Carl Menger’s Principles of Economics, this is essential viewing for anyone who wants to know why value is not in things—but in the needs they help meet.

❓ Questions Answered in This Video
-What determines the value of a specific good?
-Why do some goods lose value when we have more of them?
-How is value connected to human needs?
-What is marginal utility and how does it work?
-Why can water be worthless in a city but priceless in a desert?
-How do changes in supply affect the value of goods?
-Can luxury goods have more value than necessities?
-What makes one unit of the same good more valuable than another?
-How does Austrian Economics differ in its theory of value?
-Why is the value of goods always subjective?

00:00 - Introduction to Dependence of Individual Needs on Specific Goods
00:15 - Value of Goods
00:56 - Needs and Goods
01:30 - Importance of Grain
02:04 - Value of a Good
02:27 - Value of Water on an Island
03:06 - Needs and Value
03:36 - Bread on a Shipwreck
04:10 - Supply and Demand
04:22 - Value in Society
04:48 - Conclusion
05:22 - Value of Water
05:46 - Outro

#SubjectiveValue #CarlMenger #AustrianEconomics