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Value and market value are different, and it is unfortunate that they are often thought of as the same thing. In fact, it hurts your business and career thinking about the world in terms of only market value. Menger was very clear on value already in 1871: it is the direct
experience of satisfaction of a want, or, to use Mises' term, the relief from a felt uneasiness. It follows that value is purely subjective and must be experienced. This experience is what economists call consumption: it is through the use of goods, services, etc. that we are
able to become better off on our own terms. This may include easily recognizable needs such as food, water, shelter. But this is only a sub set of what we find valuable. And, to be clear, we don't actually have a want for food, but for what food provides us: survival, relief from
hunger and so on. But value is attained by whatever makes us feel better, that calms our minds, makes us feel stronger, fitter, more beautiful etc. Value is only in the eyes of the individual, but this doesn't mean it cannot be influenced by others: we often like and want things
for cultural, community, religious reasons. Many things affect what we value, but the point is not to explain value but to recognize that value is what people see it as. And as such it cannot be measured; it can only be directly experienced. Market value is different, since it is
measured using the medium of exchange - money. The market value of something is easily recognizable in the dollar amount it brings, that money in exceeds money out. But this is not value per se, but the social abstraction of numerous individuals' valuations through market
exchange. That's what prices are about - they help businesses and entrepreneurs to figure out what is the better us of resources. Better on what terms? Better in terms of satisfying people's wants: create *value*. Were it not for the use of some common unit for the exchanges
of goods and services, and especially their production, we couldn't figure out what is the higher-value use of scarce resources. And then we would be hopelessly inefficient as a society (and as socially embedded individuals). We would also lack the means to identify what is real
value to people. It is through the social cooperation and interaction in the market place that we generate prices and can socially estimate which is the better course of action. This is not because we have money per se, because the importance is not in the dollars and cents
themselves, but in what they *mean*. And they mean something for the simple reason that in order to have money - the ability to 'command' goods from others through exchange - one has to provide value to others. We gain purchasing power because we have provided others with
satisfaction (value). And to the degree that we have done this, we have gained the ability to satisfy our own wants (create value for ourselves) by purchasing goods and services from others. For entrepreneurs, who are in the business of producing for the satisfaction of wants,
market value is the only indication of whether they're doing something right (providing value to people by satisfying their wants) or, if suffering losses, doing something wrong (meaning others are doing it better). Market value can be achieved by providing consumers with real
value, on the consumers' terms. It is possible, at least in the short term, to maximize market value without considering consumers' subjective value (their satisfaction). But it is really a fundamental error to do so. A sustainable profitable business, which means it has high
market value, is focused on and does a good job providing the means for consumers to experience value on their terms. Proper entrepreneurship cannot neglect what consumers value, whatever it may be. It should embrace it.
