One of Adam Smith’s few deficiencies as a thinker was that he held a labor theory of value. It was the better part of a century after Smith that Carl Menger and others popularized the subjective theory of value that economists use today. As it turns out, John Locke also held to a labor theory of value.
In his discussion of the origin of property rights in chapter 5 of his Second Treatise, Locke argues that land becomes your property when you labor upon it by tilling the soil or otherwise improving it. But then, in section 40 , he goes one step further:
For it is labour indeed that puts the difference of value on every thing; and let any one consider what the difference is between an acre of land planted with tobacco or sugar, sown with wheat or barley, and an acre of the same land lying in common, without any husbandry up on it, and he will find, that the improvement of labour makes the far greater part of the value.
I disagree. Under the subjective theory of value, the whole reason crop-producing labor creates value isn’t because of the labor. It’s because people value the crops, expressed by their willingness to pay for them. This willingness varies from person to person; that is why value is subjective. There is no objective standard.