Labour Theory of Value

[TheTickTockMan]

I understand the basic principle of this theory. In a nutshell, it is that, in order for the capitalist to make profit, he must sell the product, produced by the labour of the worker, for more than the value of work put into the product by the worker. Hence, the capitalist feeds fat off the working-class by profiting off the difference between apparent prices and the input of labour, having put in no labour of his own due to his owning of capital.

My question is: How does this theory apply to a modern information and service-based First World economy?

For example: online businesses, selling a certain intangible service or nonphysical product, such as software, which may or may not have been designed or produced by the capitalist himself.

Or investment or financial firms? These bodies would appear to do nothing other than trading in information and seem to profit by pushing paper-money (stocks, options, futures, what have you) around in artificial markets.

How do these capitalists exploit the working class?

?~TTTM

[Luís Henrique]

Originally posted by [email protected] 29, 2007 02:36 pm
I understand the basic principle of this theory. In a nutshell, it is that, in order for the capitalist to make profit, he must sell the product, produced by the labour of the worker, for more than the value of work put into the product by the worker.
Not quite.

Capitalists sell commodities for a price that revolves around their value, and the value is given by the amount of labour embodied in each commodity. They also buy labour power by its value, wich is also given by the amount of labour embodied in it.

That is to say, the use of labour power produces more than its own value. Reducing it to a very simplistic one-commodity model, a worker needs to eat one bushel of corn to produce two bushels of corn. The additional bushel is thence "free" for the capitalist; unpaid labour.


Hence, the capitalist feeds fat off the working-class by profiting off the difference between apparent prices and the input of labour, having put in no labour of his own due to his owning of capital.

Whether they put in labour of their own or not is immaterial (some of them in fact kill themselves through overwork). But they surely have the option to put it or not, which workers don't.


My question is: How does this theory apply to a modern information and service-based First World economy?

No difference that I am aware of.


For example: online businesses, selling a certain intangible service or nonphysical product, such as software, which may or may not have been designed or produced by the capitalist himself.

Those products or services are no different from material products or services, in respect to their economic value, prices, etc.


Or investment or financial firms? These bodies would appear to do nothing other than trading in information and seem to profit by pushing paper-money (stocks, options, futures, what have you) around in artificial markets.

How do these capitalists exploit the working class?

Indirectly. They get a share of the global surplus value, because their activities are necessary for the reproduction of capital, even though their workers produce no value at all.

Be careful not to slip into the "producerist" position (according to which there is a "good" capital that after all produces things, and an "evil" capital that is parasitical). Capitalism cannot exist without such "evil" capital, which is absolutely essential to its functioning.

Luís Henrique

[TheTickTockMan]

So the LTV is simply that "labour is a commodity"? Interesting! Thanks for clarifying that, that was very helpful.

!~TTTM

[Luís Henrique]

Originally posted by [email protected] 29, 2007 03:06 pm
So the LTV is simply that "labour is a commodity"? Interesting! Thanks for clarifying that, that was very helpful.

!~TTTM
No, labour is not a commodity. Labour power is. When you work for a wage, you do not sell your labour, you sell your labour power. That is indeed the difference: the capitalist pays you for your labour power, and keeps your labour.

Luís Henrique

[TheTickTockMan]

No, labour is not a commodity. Labour power is. When you work for a wage, you do not sell your labour, you sell your labour power. That is indeed the difference: the capitalist pays you for your labour power, and keeps your labour.

Luís Henrique

Ah, I see. I think I understand now.

!~TTTM

[blackstone]

Also realize that the industrial capitalists do not allocate all of the surplas value for themselves. They cannot realize profit without first selling these commodities! Even with the value of a commidity being 2,000 dollars, they will not see profit, with it sitting on their warehouse shelves! The commerical capitalists(online businesses, retailers,etc) buys all or some of the production from the industrial capitalists at an agreed price and sells these at a higher price. This means at a price agreed upon the industralist and middle men, the commodity only realizes PART of its surplus value. Part of which is appropiated by the industrialist and part of which is appropiated by the commercialist, who see profit, only once the commidity is sold.

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