Marxist Theory of Labor

[Drace]

I got into an argument with a free market anarchist and after many bla blas, he got to a point saying that there was no such thing as a 'fair' trade.

He explained it by saying if we both thought the trade was equal, there would be no reason to trade.

The topic is not about how dumb he is. He was trying to just make a side note. This is just about my view of the theory.

Anyway, I mentioned Marx's theory of labor and he said that it was incredibly flawed and that many modern day Marxists themselves discard it.

I thought of this after our convo.

A fair trade could be calculated on the basis of the labor it took to produce a product. An individual may prefer a less valuable item(in terms of amount of labor for its production). I know this as 'use value' which is differentiated among individuals, but on a larger scale, say the market, things are of value according to the labor consumed for the production of the item. So some fool can value a tennis ball more then a car. If such a trade is made, then the fool is still ripped off, because say if the car took 4000x times the labor, he could of had 4000 tennis balls instead!
This is undeniable, since all it does is recognize a factor which plays the role of the ultimate factor in production, labor.

You cannot mention resources as an alternative, because they themselves are a product of labor.

Is my understanding of the theory correct? I have never really looked at Marx's works on this, so its only a guess.

[Yehuda Stern]

I was writing an answer, and then I realized that you do know about use values, so now I'm asking - what's your question? It's pretty difficult to calculate exactly how much labor it takes to produce an item. In Marxist writings people always talk about items taking this and that amount of time to produce, but in reality, we need to factor in the production of their parts, moving around, etc. Money is exactly meant to serve the purpose of comparing the exchange value of two items. Still, though, I don't really get what you were asking.

[Drace]

Just asking if what I mentioned was Marx's theory of labor.

And to justify his claim that Marxists this day discredit it.

[Yehuda Stern]

If indeed someone needs a tennis so badly that he is willing to trade a car for it, it's entirely possible that he will do so. But this is the same is bourgeois economists trying to figure out how much a person in the desert would be willing to pay for water - it's ridiculous to try to analyze a mode of production by means of a relationship between two individuals. The key to analyzing capitalism is to analyze the way in which the labor of the workers is exploited and turned into a commodity (commodified).

[JimmyJazz]

I got into an argument with a free market anarchist and after many bla blas, he got to a point saying that there was no such thing as a 'fair' trade.

He explained it by saying if we both thought the trade was equal, there would be no reason to trade.

This would only be true if every person could make anything he wanted, with the only limitation being how much time he was willing to invest. But I couldn't make myself a car from scratch if I had an entire lifetime.

The reason to trade equal goods is because most goods that people want, in a post-industrial society, require a huge division of labor to produce. One person cannot make them on his own. Thus you do what you are best (i.e. most efficient) at and trade for the rest.

[Schrödinger's Cat]

If you have time, read this article about the labor theory: http://mutualist.org/id70.html

[mikelepore]

A fair trade could be calculated on the basis of the labor it took to produce a product.

Values are usually the levels about which prices fluctuate due to supply and demand.

The law of value, explained by Marx, says that the values of various commodities are proportional to the amounts of socially necessary labor time required for the production of each kind of commodity.

However, it's not because people believe that this is what's "fair" when the products get traded.

It's because, when average prices occur in any other proportions, the capital invested by producers migrates from one economic sector to another to obtain an advantage, until this migration of capital destroys any further advantage.

For example, suppose a newly invented machine were to make it possible to build a house in ten minutes. Then a lot of capital would rush in to produce houses. This would increase the supply greatly. Due to the increased supply, a house would have considerably less value. Conclusion: less necessary labor, less value.

*******

"You would be altogether mistaken in fancying that the value of labor, or any other commodity whatever, is ultimately fixed by supply and demand. Supply and demand regulate nothing but the temporary fluctuations of market prices. They will explain to you why the market price of a commodity rises above or sinks below its value, but they can never account for that value itself." -- Marx, _Value, Price and Profit_

*******

"The value of commodities is determined by the labour required for their production. But now it turns out that in this imperfect world commodities are sold sometimes above, sometimes below their value, and indeed not only as a result of ups and downs in competition. The rate of profit tends just as much to balance out at the same level for all capitalists as the price of commodities does to become reduced to the labour value by agency of supply and demand." -- Engels, preface to the first German edition of Marx, _The Poverty of Philosophy_