Intrinsic Value and Effective Value are concepts derived from John Ruskin (1819-1900) with some modification.
Intrinsic Value relates to the output side of the economy. The term applies to final products only, not to natural resources or to intermediate products which are not directly consumed. A final output’s Intrinsic Value is positive to the extent that its consumption has a positive impact on the physical, mental, and emotional health of humankind, when considered over the long run. Its Intrinsic value is negative to the extent that it has negative impact on the physical, mental, and emotional health of humankind when considered over the long run.
The Intrinsic Value in a final output becomes Effective Value when the output is consumed in such a way that its potential is realized. The degree of this realization is the amount of Effective Value created.
