Mike Fakelastname
13th June 2004, 04:04
First off, a little history behind the Labor Theory of Value. Karl Marx was the first one to put it into some kind of organized thought. He goes into great detail with specific mathematical examples of the LTV in Das Kapital. The LTV was Marx’s main contribution to modern economic theory, and is for the most part widely accepted among modern economists.
The principle behind the LTV is that the value of a commodity is directly related to the labor required to produce it. An example would be how a gold chain is worth more than a plastic chain. The gold must be mined, melted, refined, shaped, and sold to the consumer. As you can see, producing a gold chain involves much more labor than producing a plastic chain. Other factors can be attributed to the gold chain being more valuable than the plastic one, such as the fact that gold is more rare. But, the overriding factor that influences the high value of gold is the amount of labor required to produce it. Other factors of a changing value other than labor and rarity include consumer demand and the practical application of the commodity (you can put as much labor as you want into producing a horse and buggy cart, but it ain’t gonna be worth much in the gasoline powered automobile age), these factors are called use-value.
S = C - W
S = Value of the surplus labor
C = Value of the commodity
W = Value of the worker's wage
When we look at the LTV deeply though, we see several other principles. The foundation of capitalism rests entirely on the fact that labor costs can never exceed the price of the commodity. Let's say that a worker in a baseball glove factory earns $10 per hour, and he/she works 9 hours a day. The labor costs of that worker are 90$ per day. The worker works the whole day, and produces $600 (subtracting the production costs, like cost of materials, electricity, etc) worth of baseball gloves; the surplus value of his or her labor (600-90) is $510. Let me state this again, while the worker produces $600 worth of the commodity, he/she is payed only $90, thus the surplus labor is worth $510.
The proletariat is forced to sell the only thing they can possibly offer to survive, their labor. Obviously, they will sell to the highest bidder. Unfortunately, as we've seen in the previous example, the capitalist class fucks the working class out of a whole lot of money. If you're reading this, you're probably already inclined to believe that this spark that causes the capitalist fire to burn can be stomped out, but how?
The principle behind the LTV is that the value of a commodity is directly related to the labor required to produce it. An example would be how a gold chain is worth more than a plastic chain. The gold must be mined, melted, refined, shaped, and sold to the consumer. As you can see, producing a gold chain involves much more labor than producing a plastic chain. Other factors can be attributed to the gold chain being more valuable than the plastic one, such as the fact that gold is more rare. But, the overriding factor that influences the high value of gold is the amount of labor required to produce it. Other factors of a changing value other than labor and rarity include consumer demand and the practical application of the commodity (you can put as much labor as you want into producing a horse and buggy cart, but it ain’t gonna be worth much in the gasoline powered automobile age), these factors are called use-value.
S = C - W
S = Value of the surplus labor
C = Value of the commodity
W = Value of the worker's wage
When we look at the LTV deeply though, we see several other principles. The foundation of capitalism rests entirely on the fact that labor costs can never exceed the price of the commodity. Let's say that a worker in a baseball glove factory earns $10 per hour, and he/she works 9 hours a day. The labor costs of that worker are 90$ per day. The worker works the whole day, and produces $600 (subtracting the production costs, like cost of materials, electricity, etc) worth of baseball gloves; the surplus value of his or her labor (600-90) is $510. Let me state this again, while the worker produces $600 worth of the commodity, he/she is payed only $90, thus the surplus labor is worth $510.
The proletariat is forced to sell the only thing they can possibly offer to survive, their labor. Obviously, they will sell to the highest bidder. Unfortunately, as we've seen in the previous example, the capitalist class fucks the working class out of a whole lot of money. If you're reading this, you're probably already inclined to believe that this spark that causes the capitalist fire to burn can be stomped out, but how?