Principles of Economics by Carl Menger Chapter 6A - Use Value and Exchange Value

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What’s the difference between use value and exchange value—and why does it matter? In this video, we break down Carl Menger’s Principles of Economics, Section 6A: Use Value and Exchange Value.
In early societies with no trade, people had to produce everything themselves. A good only had value if it could directly satisfy their needs. This is what Menger calls use value—a good is important because it serves an immediate, personal need. Think of a fur coat for a lone hunter—it keeps him warm, so it has value.
But once trade enters the picture, something changes. A person can now own goods not for their direct use, but because they can exchange them for other things they need. This is exchange value—a good has importance because it helps us meet our needs indirectly through trade.
Menger explains that both use and exchange value arise from the same core principle: we value goods because they help us satisfy needs. The only difference is how they do that—directly or indirectly.
Understanding this distinction helps us grasp how economies evolve. In advanced markets, many goods are valued not for what they do, but for what they can be traded for. This section gives us the foundation for understanding prices, markets, and the entire structure of economic exchange.

❓ Questions This Video Answers:
-What is use value?
-What is exchange value?
-How does trade affect the value of goods?
-Why is a fur coat valuable to a hunter and a trader?
-Can a good have value without direct use?
-How does economic development change how we value goods?
-What connects use value and exchange value?
-Why is this distinction important in economics?
-How do we measure a good’s importance in trade?
-What is the core reason any good has value?

00:00 - Introduction to Use Value and Exchange Value
00:11 - Early Stage of Economic Development
00:57 - The Value of a Good in Different Contexts
01:38 - Use Value vs. Exchange Value Explained
02:11 - Definitions of Use Value and Exchange Value
02:30 - Outro

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