Front Page Titles (by Subject) Book III, Chapter VIII: Subjective Exchange Value - The Positive Theory of Capital
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Book III, Chapter VIII: Subjective Exchange Value - Eugen von Böhm-Bawerk, The Positive Theory of Capital 
The Positive Theory of Capital, trans. William A. Smart (London: Macmillan and Co., 1891).
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Book III, Chapter VIII
Subjective Exchange Value
We are now ready to consider a concrete application of what has just been said, and one that lies at the root of a very widespread phenomenon. Hitherto we have mostly had before us cases where a commodity, in virtue of some technical adaptability peculiar to it, becomes susceptible of being employed in various ways. Quite apart from any such special assumption, however, the existence of an organised system of exchange gives almost every good a second kind of employment—that of being bartered for other goods. It is customary to put this against, and in opposition to, all other kinds of employment, and to associate this opposition between "Use" and "Exchange" with a division of value into "Use Value" and "Exchange Value."
Understood in a certain sense, to which in this place we shall adhere, both of these—exchange value as well as use value—are kinds of subjective value. Use value is the importance which a good obtains for the welfare of a person, on the assumption that it is used immediately in furthering his wellbeing; and, similarly, exchange value is the importance which a good obtains for the welfare of a person through its capacity to procure other goods by way of barter. The amount of use value is measured, according to rules already known to us, by the amount of the marginal utility which the good in question brings its owner when used by himself. The amount of (subjective) exchange value, on the other hand, obviously coincides with the amount of the use value of the goods got in exchange. When I employ a good by bartering it I procure for my welfare exactly what the goods I get in exchange procure for me in utility. The amount of the good's subjective exchange value, therefore, is to be measured by the marginal utility of the goods got in exchange for it.
Now nothing is more common than that the use value and the exchange value of a good to its owner are of unequal amount. To a scholar, for instance, the use value of his books would, as a rule, be considerably greater than their exchange value, while to the bookseller the contrary is likely to be the case. The question now recurs, Which of the two values in such cases is the true one?21
Here we have only to deal with a special case out of a group for which we have already laid down the general rule. Employment in personal use and employment in exchange are two different ways of employing one good. If the good affords a different marginal utility in each employment, it is the higher utility that gives the standard for its economical value. If, therefore, the use value and the exchange value of a good are different in amount, the higher of them is its true value. We recognise this principle in practical life. We always employ our goods in that which corresponds to the higher and the true value. The scholar keeps his books; the bookseller sells his. Or, if the scholar gets into reduced circumstances, he also sells his books; but in this case, while the use value and also the objective exchange value of the books remain unaltered, their subjective exchange value to him has risen. That is to say, there are now more urgent wants of other classes clamouring in vain for satisfaction, and the possibility of satisfying these other wants through the sale of the books acquires for him an increased importance, and an importance that easily outweighs the use value of the books.
The recognition that there is a subjective exchange value, and that this is something entirely distinct from what is usually called exchange value (that is, objective exchange value), is of fundamental importance in guiding us among the phenomena of value. It may be advisable, on that account, to devote a little more attention to the subject. The illustration of the scholar is enough to convince us that the subjective importance, based on the possibility of barter, may take a different direction from that taken by the objective power-in-exchange and price of goods. For, price remaining unaltered, the subjective exchange value of the goods may rise. But the two exchange values may even move simultaneously in opposite directions. Take the case of a poor student, whose last and sole possession—the only thing he can call his own—is a Jubilee sovereign. There is no doubt that this sovereign will have a high subjective importance for the satisfaction of his own wants; and there is no doubt that this importance is an exchange value, for sovereigns have no use value. Now suppose that our student falls heir unexpectedly to a fortune of ten thousand pounds, while, simultaneously, on account of the limited number issued, the sovereign goes up from 20s. to 40s. How is it now with the "exchange value" of the sovereign? Here the difference between the two conceptions becomes manifest. The objective exchange value, the current value of the coin, has gone up from 20s. to 40s.; but the importance which it has for the satisfaction of its owner's wants, the subjective exchange value of the sovereign, has, owing to the changed relations between the student's wants and his resources, unquestionably fallen. Yesterday our student would have lamented the loss of the sovereign as the loss of his last defence against extremest hunger and misery; to-day, perhaps, he gives it away with a light heart to a friend who collects coins. In spite of its increased current value it has become a mere bagatelle to him.
This fundamental and real difference between the two conceptions of exchange value is the principal reason why we cannot accept the ordinary division of Use Value and Exchange Value as the ultimate division of the total phenomena of value. To do so would be to separate related things, and to mix up matters which are really so heterogeneous that it is scarcely possible to find a common definition for them. Obviously, subjective exchange value is much more nearly related to subjective use value than to objective exchange value. If we wish to find our way with certainty among those phenomena to which the name of "value" has been attached, it is advisable to do as we have done: place objective exchange value by itself on one side, and subjective value on the other side, and afterwards separate the latter into subjective use value and subjective exchange value.22
[21.]It is easy to see that we can only speak of two values in the same loose way as we spoke above of several "alternative marginal employments," for, naturally, a good can never have anything but one value to a person. Value is the importance which a good has for the wellbeing of a man, and this importance cannot be at the same time great and small, higher or lower. But we do now and then use this rather inaccurate way of thinking and speaking, and, therefore, I have here, as on the former occasion, adapted my formula to it.
[22.]Notwithstanding the objections of Diehl (P. J. Proudhon. Seine Lehre und sein Leben, vol. i., Jena, 1888, p. 109), who approves of the "traditional distinction of Use Value and Exchange Value," I must hold by everything I have said above.