Value doesn't come from labor?

[Unclebananahead]

I just came across this bit of piffle whilst scouring the cyberscape:


If labor created value, then society (and all of its members) could get rich by having everyone use their bare hands to dig large holes in the desert and then fill them back up. After all, this would be extremely hard work of a very physical nature. However, this would create no wealth for society—in fact, it would represent a destruction of wealth (imagine what the laborers could have actually produced if they were not hired to complete this task). Generally, this destruction of wealth takes place in the form of an absence of economic activity which would have otherwise occurred.

The value of a product does not come solely from the labor of the workers. The value of a product is measured subjectively; a product is essentially worth what people are willing to pay for it.

A laborer in turn receives payment for his services based on the value that his work adds to the product or service. A janitor in a shoe factory adds relatively little value to the shoes that are being created. There is likely more value being added by the designer who designs the shoes, by the worker who sews the shoes together, and by the person who manages the distribution network which allows for the shoes to be sold in thousands of stores around the world. These workers add more value to the product, despite the fact that the janitor undoubtedly exerts more physical effort to do his job.

From this inane website: http://americanlyyours.com/2011/05/12/why-ceos-earn-more-than-janitors/

Thoughts?

[RNL]

What determines the value of a commodity is the quantity of labour-time socially necessary to produce it under given conditions of production.

The theory is a theory of commodity production. It's not intended to explain why a particular painting sells for €100 and not €120. The irony, of course, is that marginal utility theory is incapable of explaining that either. Marxists and marginalists agree that the prices at which things like paintings and antiques exchange is determined 'subjectively'. Marginalists leave it at that; marxists add that these subjective valuations take place within objective historical parameters - a money society, for instance, and so a society dominated by commodity production, which leads us to the need for value theory. Marginalism makes no distinction between fungible, industrially produced use-values (commodities) and non-fungible use-values, so they have no need of value theory.

The typical mistakes are made: 1) of assuming an identity of price and value, and 2) of semantic confusion over the meaning of the word 'value'. 1) Price and value are not identical, and prices systematically diverge from values. Price is the expression of exchange-value mediated through the money commodity. The expression is indirect because we don't actually use the money commodity (gold) in exchange, the expression is further mediated through the state-finance nexus (fiat money, credit money, symbolic money), so there is a lot of room for flexibility and divergence. Use-values that embody no value can fetch a price, or can fetch a price that is completely unrelated to whatever value they do embody (like when a common commodity is sold as a novelty or an objet d'art - like the 'possessed rubber ducky' that was sold for $$$$ on eBay a few years ago, its price has nothing to do with the labour-time socially necessary to produce rubber duckies). 2) Marx's use of the word is in a technical sense, value is an objective, immaterial magnitude embodied in commodities. Marginalists use the word in its ordinary senses, as both a noun and a verb, so the value (noun, and by which they mean price) of a 'good' is determined by the extent to which the buyer values (verb) it.

It is correct that a janitor in a shoe factory adds no value to the shoes. Both the janitor and the CEO perform unproductive labour.

[Unclebananahead]

So, essentially, the author of the aforesaid misses the point that the labor theory of value pertains to the production of commodities, not value created by virtue of sheer physical exertion (e.g., barehanded hole digging out in the desert)?

[ArrowLance]

So, essentially, the author of the aforesaid misses the point that the labor theory of value pertains to the production of commodities, not value created by virtue of sheer physical exertion (e.g., barehanded hole digging out in the desert)?

It is also possible the author actually unwittingly understands the ltv while he consciously plays against it. How can value be destroyed by valueless labour if that labour in no way created value to begin with?

[Hoipolloi Cassidy]

All Marx is saying (in KapI, anyhow), is that human labor is the necessary (not the only, not the exclusive, just the necessary) precondition for the production of value. As opposed to the Physiocrats, who thought value came out of the ground; as opposed to A. Smith, who thought it came from the circulation of goods. As not opposed to Ricardo, who.... etc.

So the capitalist is also "producing" value, not because he digs or doesn't dig holes, but because he works mighty hard at persuading other idiots that sitting on his butt collecting checks is hard work. Like the idiot whose statement started this whole thing.

[LevDavidovichBronstein]

" dig large holes in the desert and then fill them back up"

to me that sounds like a very poor attempt to create a problem out of something that isnt a problem

[RNL]

So, essentially, the author of the aforesaid misses the point that the labor theory of value pertains to the production of commodities, not value created by virtue of sheer physical exertion (e.g., barehanded hole digging out in the desert)?
Yeah. It stems from the two misunderstandings, of the theoretical distinction between price and value (marginalists don't make this distinction), and of the technical theoretical use of the word 'value' by Marx.

You can see this in the way the argument is usually framed. We constantly see the discourse framed as "the labour theory of value versus the subjective theory of value". But when we realise that the word 'value' is being used in totally different senses in these two phrases, we can see that this way of framing the debate is highly ideological. It implies that the two theories (or bodies of theories) are intended to explain the same things, when they're not at all. In fact, I'd argue marginal utility theory isn't intended to really explain anything, it's intended to prove that there's really nothing much to explain, that things are the way they are and that's because that's the only way they could ever be. So I think the false equivalency should be resisted by socialists, we shouldn't think in terms of "LTV vs STV", we should think in terms of value theory vs marginal utility theory. That way it becomes a lot clearer that this is a political, ideological struggle over intellectual hegemony much moreso than a question of competing scientific theories attempting to explain the same phenomena.

The austrian critique of Marx has always had these errors at its core. This is because they've always failed to recognise that there's no such thing as "the labour theory of value". Marx's value theory differs enormously from Ricardo's value theory. Socialist value theory never became the dominant school of thought in academia or politics, it has always been suppressed. So when the 'marginalist revolution' took place in the 1870s, all the marginalists had to do was debunk Ricardo. Then, by conflating the theories of Ricardo with the theories of Marx (and of the other socialist political economists) under the homogenous banner of "the labour theory of value", they could claim victory over all variations of this theory merely by poking holes in an already outmoded Ricardian version of it.

[Ocean Seal]

Let's take a look at the question. I would suppose that in the event that for whatever reason one would need to dig a hole and fill it back up, it would be valuable. Suppose a pirate needed to bury treasure. And someone offered to dig a fairly large hole and fill it back up. The person who performed such a task would be offered pay based on the social-average of labor time that it takes to dig a hole and fill it up. What the author is trying to do is trying to say that labor value isn't worth anything if the product isn't worth anything to an individual. If my home already has plates and someone offers to sell me plates, I wouldn't buy them because they are necessary and if I did I would probably want a price less than their value, because I don't need them. But they still have value.

[Rooster]

The first part is basically the mud pie argument.

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[syndicat]

If labor created value, then society (and all of its members) could get rich by having everyone use their bare hands to dig large holes in the desert and then fill them back up. After all, this would be extremely hard work of a very physical nature. However, this would create no wealth for society—in fact, it would represent a destruction of wealth (imagine what the laborers could have actually produced if they were not hired to complete this task). Generally, this destruction of wealth takes place in the form of an absence of economic activity which would have otherwise occurred.

The value of a product does not come solely from the labor of the workers. The value of a product is measured subjectively; a product is essentially worth what people are willing to pay for it.

A laborer in turn receives payment for his services based on the value that his work adds to the product or service. A janitor in a shoe factory adds relatively little value to the shoes that are being created. There is likely more value being added by the designer who designs the shoes, by the worker who sews the shoes together, and by the person who manages the distribution network which allows for the shoes to be sold in thousands of stores around the world. These workers add more value to the product, despite the fact that the janitor undoubtedly exerts more physical effort to do his job.

this is standard neoclassical economics, that is, capitalist ideology. value is in relation to how people desire things to be produced. that is fair enough. but even if something is desired by some people, it won't be produced if it costs too much relative to its usefulness. if someone proposes a very complicated pencil sharpener that costs $100, it won't be produced because people won't pay that much for a pencil sharpener. they might pay that much for a pair of shoes, on the other hand.

so why things are produced is also dependent on their costs of production. and the labor theory of value was a theory of the prices of commodities (and thus their market value) in terms of their costs of production.

the bit about the janitor contributing less value to the product than the designer and that's why they are paid less is pure poppycock. they are paid less because their bargaining power is less in the labor market. people with the skills and experience to do fashion design are relatively scarce. their skills mean they get a certain level of discretion or control in their work, and thus they have more power over production.

it's not really feasible to sort out how much each person's labor contributes to the value of the product because production is a social process. and the skills of the workers are also a social product. they are influenced by their family background, their genetic endowment (e.g. how large and muscular is someone), the schooling they have received, the equipment they work with, the personal relationships with the people they work with. all those things affect productivity.

[Vladimir Innit Lenin]

Value is a tricky word to pin down and define, and what separates Marxian academics from bourgeois academics, is that Marxists are able to pin down an exact and materialist definition of value and its characteristics.

Value is derived from labour. However, value does not equal labour (necessarily). This pretty much explains the faux pas of the author the OP is describing.

Value is created by labour. Inherent value, which is different to exchange-value. This is somewhat a bone of contention. True value, to me (and I think this point was made in Capital, though i've not read it all), is inherent value. Exchange-value (the 'price), is not true value at all, since 'exchange value' or 'price', in a free-market system, does not have to equal the intrinsic value of the product. There are many such examples, too numerate to list here, but we can all think of similar products priced differently, faux-'luxuries' and so on.

Moreover, this 'exchange value' is even more of a paradox when you consider, as a Marxist does, that the interests of employers and employees are not the same. Thus, the value of labour and the use value do not converge, and so where supply and demand meet (the equilibrium price) is not in fact a satisfactory convergence for employee, employer and buyer, in almost all market conditions.

[RNL]

Value isn't inherent in commodities, it's apparent in their exchange ratios. The value of one commodity is only measurable as a magnitude in quantities of other commodities. This is why value only exists in a society of generalised commodity production.

[S.Artesian]

I just came across this bit of piffle whilst scouring the cyberscape:



From this inane website: http://americanlyyours.com/2011/05/12/why-ceos-earn-more-than-janitors/

Thoughts?

This bit of piffle is lifted, almost verbatim, from Keynes. What Keynes and his opposite "free marketeers" ignore his is the essential interconnection between use value and exchange value that makes up value and production of and for value.

Indeed, some people do get rich by having other people dig holes, aggrandizing the surplus labour time in the holes which is realized if and when there is a social necessity for the holes.

No social necessity, then no socially necessary labor-time, and the time so expended is valueless despite its exploitation.