How can the labour theory of value

[jaddaok]

Just wondering if you marxists could give me an explaination of how this fits in the labour theory of value:

1. Sertain objects have value even tho there hasnt been invested any labour in it (for instance real estate)

2. Objects increasing in value even tho there hasnt been invested any more labour in it (like a bottle of wine becomming more valuable after some years, or a worthless desert area becomming worth billions after someone discover oil there.)

3. An objects posission in time and space can affect its value (like mentioned oil in a desert is a valuable resourse that increases the lands walue, while oil in a farmer's field is a hazard and will lower the value of the field)

[KC]

"Price is the money-name of the labour realised in a commodity. Hence the expression of the equivalence of a commodity with the sum of money constituting its price, is a tautology, [14] just as in general the expression of the relative value of a commodity is a statement of the equivalence of two commodities. But although price, being the exponent of the magnitude of a commodity’s value, is the exponent of its exchange-ratio with money, it does not follow that the exponent of this exchange-ratio is necessarily the exponent of the magnitude of the commodity’s value. Suppose two equal quantities of socially necessary labour to be respectively represented by 1 quarter of wheat and £2 (nearly 1/2 oz. of gold), £2 is the expression in money of the magnitude of the value of the quarter of wheat, or is its price. If now circumstances allow of this price being raised to £3, or compel it to be reduced to £1, then although £1 and £3 may be too small or too great properly to express the magnitude of the wheat’s value; nevertheless they are its prices, for they are, in the first place, the form under which its value appears, i.e., money; and in the second place, the exponents of its exchange-ratio with money. If the conditions of production, in other words, if the productive power of labour remain constant, the same amount of social labour-time must, both before and after the change in price, be expended in the reproduction of a quarter of wheat. This circumstance depends, neither on the will of the wheat producer, nor on that of the owners of other commodities.

Magnitude of value expresses a relation of social production, it expresses the connexion that necessarily exists between a certain article and the portion of the total labour-time of society required to produce it. As soon as magnitude of value is converted into price, the above necessary relation takes the shape of a more or less accidental exchange-ratio between a single commodity and another, the money-commodity. But this exchange-ratio may express either the real magnitude of that commodity’s value, or the quantity of gold deviating from that value, for which, according to circumstances, it may be parted with. The possibility, therefore, of quantitative incongruity between price and magnitude of value, or the deviation of the former from the latter, is inherent in the price-form itself. This is no defect, but, on the contrary, admirably adapts the price-form to a mode of production whose inherent laws impose themselves only as the mean of apparently lawless irregularities that compensate one another.

The price-form, however, is not only compatible with the possibility of a quantitative incongruity between magnitude of value and price, i.e., between the former and its expression in money, but it may also conceal a qualitative inconsistency, so much so, that, although money is nothing but the value-form of commodities, price ceases altogether to express value. Objects that in themselves are no commodities, such as conscience, honour, &c., are capable of being offered for sale by their holders, and of thus acquiring, through their price, the form of commodities. Hence an object may have a price without having value. The price in that case is imaginary, like certain quantities in mathematics. On the other hand, the imaginary price-form may sometimes conceal either a direct or indirect real value-relation; for instance, the price of uncultivated land, which is without value, because no human labour has been incorporated in it."
-Karl Marx, Capital Vol. 1, Ch. 3, Section 1

[ComradeRed]

Tossed to Learning.

[jaddaok]

So if I get you right, real estate has no value, just a price, according to marx? If so, why do communists oppose private ownership of land? Whats wrong with someone owning something thats worthless?

[Faceless]

Hi Comrade. Those were good questions and I don't know how useful "quoting scripture" is to you, so here, I will have another stab at answering your points one by one. Here the points you made:



1. Sertain objects have value even tho there hasnt been invested any labour in it (for instance real estate)
Ok, I have already written one reply to this but the window closed. When it comes to land, there is only a limited amount of it in a capitalist and almost every last acre has been distributed amongst various big landowners. This is the only way that the peasants could originally be kicked off the land with no prospect of just moving onto some unused land. As such there is a monopoly in the land.

When the capitalist starts production, he has to put his money towards machines and labour power but also renting the land or the building. Each month he has to do this, and because he can not simply build new land is forced to go to the landowner every month to pay the rent and renew his right to use the land a little longer. But what then dictates the price? You are quite right, the land in itself doesn't have value. The question is impossible to answer if we do not see past the denominations of "rent", "profit" and "wages". Marx saw that if you invest a certain amount in the machines, and a certain amount on labour power and then sell the produce, you get a surplus value. This surplus is not the same as profit, but also includes the interest the capitalist has to pay on loans, and the rent on the land. The landlord has not "produced" value. He has merely extracted a portion of it based upon his monopoly at the expense of the capitalist's profit.


2. Objects increasing in value even tho there hasnt been invested any more labour in it (like a bottle of wine becomming more valuable after some years, or a worthless desert area becomming worth billions after someone discover oil there.)
You make two seperate points here which are caused by different things. The first is similar to monopoly in land. A young wine can be produced according to demand and supply goes up and down according to demand. The price then will on average correspond to the value. However, wine which has aged has a unique flavour and as such a disproportionate demand to supply. It is a monopoly. The price therefore only has an upper limit determined by the amount a person is willing to pay for it.

"worthless desert" however has a very high value when infact a huge amount of labour goes into searching for oil. When someone just gets lucky, this land takes on the "average value" determined by the socially necessary labour involved in seeking out the land.


3. An objects posission in time and space can affect its value (like mentioned oil in a desert is a valuable resourse that increases the lands walue, while oil in a farmer's field is a hazard and will lower the value of the field)
I am not sure what you are getting at here. Carbon has different value depending upon the position it's in. Consider a diamond. A huge amount of labour goes into finding and mining them. However carbon in coal is easier to extract and requires less labour.

[ComradeRed]

Just to add a point...


3. An objects posission in time and space can affect its value (like mentioned oil in a desert is a valuable resourse that increases the lands walue, while oil in a farmer's field is a hazard and will lower the value of the field) No, the value of the land goes up because there is oil there.

The farmer will possibly lose money because the crops are ruined (they lose their use-value), however the oil in the field when extracted has a value which would probably be more than the value of the crops.

As far as the value of an object "depends on its position in time", well that's science fiction.

For it "depends on its position in space", it takes labor to move it from place to place which would change it's value (more specifically add to it).

[Issaiah1332]

Originally posted by [email protected] 10, 2007 10:54 pm
Just to add a point...


3. An objects posission in time and space can affect its value (like mentioned oil in a desert is a valuable resourse that increases the lands walue, while oil in a farmer's field is a hazard and will lower the value of the field) No, the value of the land goes up because there is oil there.

The farmer will possibly lose money because the crops are ruined (they lose their use-value), however the oil in the field when extracted has a value which would probably be more than the value of the crops.

As far as the value of an object "depends on its position in time", well that's science fiction.

For it "depends on its position in space", it takes labor to move it from place to place which would change it's value (more specifically add to it).
Red, do you have any degrees in economics?

You seem to know alot about it...or do you just do your own reading?

[ComradeRed]

Originally posted by Issaiah1332+April 10, 2007 04:22 pm--> (Issaiah1332 @ April 10, 2007 04:22 pm)
[email protected] 10, 2007 10:54 pm
Just to add a point...


3. An objects posission in time and space can affect its value (like mentioned oil in a desert is a valuable resourse that increases the lands walue, while oil in a farmer's field is a hazard and will lower the value of the field) No, the value of the land goes up because there is oil there.

The farmer will possibly lose money because the crops are ruined (they lose their use-value), however the oil in the field when extracted has a value which would probably be more than the value of the crops.

As far as the value of an object "depends on its position in time", well that's science fiction.

For it "depends on its position in space", it takes labor to move it from place to place which would change it's value (more specifically add to it).
Red, do you have any degrees in economics?

You seem to know alot about it...or do you just do your own reading? [/b]
I've been studying economics for over 8 years now on my own, reading everything I could get my hands on dealing with the subject (and I mean everything).

It's probably because I'm a physicist and thus savvy at math that I can see through marginalist mathematical bollocks.

I'm such a nerd :lol: If only beautiful women were attracted to me because of it :(

[phoenixoftime]

In reply to ComradeRed
I am very interested in economics but am hopeless at math. Although I study it in my spare time, is all hope lost for me becoming a good economist? I considered trying to find a university where I could study Marxian economics, but abandoned the idea when I found I would have to go overseas to study a subject I might fail at horribly.

[Demogorgon]

Originally posted by [email protected] 11, 2007 07:12 am
In reply to ComradeRed
I am very interested in economics but am hopeless at math. Although I study it in my spare time, is all hope lost for me becoming a good economist? I considered trying to find a university where I could study Marxian economics, but abandoned the idea when I found I would have to go overseas to study a subject I might fail at horribly.
Well I'm not ComradeRed, but I can try to answer your question. In the past, you could study economics without a great deal of mathematical knowledge. My economics teacher at school could barely count fractions! He was of course a product of 1950s and 60s economics where the emphasis was on the non-mathematical side of things.

These days there is a much greater emphasis on mathematics, and branches of the discipline such as econometrics are gaining in favour which are very mathematical indeed. That said, the Universities do appreciate that not everybody studying economics is going to be a maths genius and they do provide help in that side of things to those who didn't get much further than their times tables.

BTW, do you really have to go abroad? I notice you are in New Zealand, as I understand it, students are actually coming from overseas into New Zealand to study economics, so it must be fairly appealing to do your work there.

[ComradeRed]

I don't know.

I mean, you don't need a great deal of math to learn Marxist economics.

However if you are serious about it you will run into vulgar economists of all colors that use math up the yin-yang to "prove" that "KAPITALIZM IS TEH GAWD!!!4". Their math is of course bollocks!

If you didn't know math you might be intimidated by their use of calculus.

Also, the New School and the University of Massachusetts at Amherst are two schools that still teach Marxist economics. It is my bias as a programmer though that you either know the shit or you don't, and saying "Well I took a course on it once..." does not equate to knowing your shit.

[Issaiah1332]

Originally posted by [email protected] 11, 2007 02:16 pm
I don't know.

I mean, you don't need a great deal of math to learn Marxist economics.

However if you are serious about it you will run into vulgar economists of all colors that use math up the yin-yang to "prove" that "KAPITALIZM IS TEH GAWD!!!4". Their math is of course bollocks!

If you didn't know math you might be intimidated by their use of calculus.

Also, the New School and the University of Massachusetts at Amherst are two schools that still teach Marxist economics. It is my bias as a programmer though that you either know the shit or you don't, and saying "Well I took a course on it once..." does not equate to knowing your shit.
I have studied much on the subject of physics and mathematics; I know a great deal on the subjects, but I just cant find a good book or site to give me unbiased knowledge on economics.

[ComradeRed]

Originally posted by [email protected] 11, 2007 08:46 am
I have studied much on the subject of physics and mathematics; I know a great deal on the subjects, but I just cant find a good book or site to give me unbiased knowledge on economics.
There is no unbiased source of information on economics.

Bourgeois economists will tell you that supply and demand is how capitalism (indeed every economic system) works.

There are some serious flaws with this approach, and there are critics like Piero Sraffa or Steve Keen that make very valid arguments against such a supply and demand scheme.

Naturally, bourgeois economists simply ignore such criticisms and assume that there is no problem :lol:

But the only real way to get in to economics would be to look at some of the critics of bourgeois economics and then look at the bourgeois economics itself (supposing you wish to become a critic of bourgeois economics).

There is a wealth of alternatives to supply and demand out there under the flag of "heterodox economics" which are particularly interesting (e.g. institutional economics, Neo-Ricardian economics, and so forth).

They are what I would recommend someone to study. Unfortunately because they are unorthodox, there is no good "introductory texts" out there.

Such is life.

[Demogorgon]

Originally posted by [email protected] 11, 2007 04:46 pm

I have studied much on the subject of physics and mathematics; I know a great deal on the subjects, but I just cant find a good book or site to give me unbiased knowledge on economics.
Well as Comrade Red says, you aren't going to find unbiased work in such a contentious subject, and it is difficult to find introductory texts to economic theories outside what is currently considered orthodox. Your best bet is to have a look at universities that offer courses in such economic theories (a lot of European ones still do) and hope they provide their material for introductory sources to non students.

You would be surprised how many iniversities do allow anyone to access their respurces online, but it is up to the individual faculties whether to restrict it or not, and I am not sure how many economics departments are that generous.

[Issaiah1332]

Thanks ComradeRed and D...