Some market anarchists endorse the labor or cost theory (LTV) of value while others have come to the conclusion that the subjective theory of value (marginalism) has more descriptive power. The (market anarchist) LTV stipulates that labor or the costs of inputs is the primary determinant of price and that deviations from this “natural price” is the result of state action or scarcity rents occurring due to imperfect competition. Marginalists see price as ultimately reflective of marginal utility, or how much the individual market actor in question values one additional unit of a product at a given time.
The theory of marginal utility, which is based on the subjective theory of value, says that the price at which an object trades in the market is determined neither by how much labor was exerted in its production, as in the labor theory of value, nor on how useful it is on a whole (total utility). Rather, its price is determined by its marginal utility. The marginal utility of a good is derived from its most important use to a person. So, if someone possesses a good, he will use it to satisfy some need or want. Which one? Naturally, the one that takes highest-priority. Eugen von Böhm-Bawerk illustrated [marginal utility] with the example of a farmer having five sacks of grain. With the first, he will make bread to survive. With the second, he will make more bread, in order to be strong enough to work. With the next, he will feed his farm animals. The next is used to make whisky, and the last one he feeds to the pigeons. If one of those bags is stolen, he will not reduce each of those activities by one-fifth; instead he will stop feeding the pigeons. So the value of the fifth bag of grain is equal to the satisfaction he gets from feeding the pigeons. If he sells that bag and neglects the pigeons, his least productive use of the remaining grain is to make whisky, so the value of a fourth bag of grain is the value of his whisky [sic]. Only if he loses four bags of grain will he start eating less; that is the most productive use of his grain. The last bag of grain is worth his life.
Virtually all economists are marginalists. Our own Kevin Carson doesn’t see them as two separate theories however. He has written extensively in the first part of Studies in Mutualist Political Economy that the insights of marginalism should be integrated as an additional component of classical political economy (LTV) and not as a standalone doctrine. He claims that the truth is akin to scissors: the top blade is marginal utility, which is the most influential short term factor, and that in the long run competition is always driving price toward cost with the bottom blade, never reaching it though due to the fluid nature of economic equilibrium. Which blade of the scissor is actually doing the cutting is hard to know for certain.
Others have responded at length and in criticism of this alleged synthesis in the Journal of Libertarian Studies, such as our adviser Dr. Roderick T. Long and The Mises Institute’s Robert Murphy. The Anarchist FAQ also addresses the question at length. We encourage you to read up on the literature impartially before making a decision; suffice it to say though that there are market anarchists who support different theories of value.