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the LTV is correct
The Labor Theory of Value seems IMO essentially correct. Exploitation is an objective observation re the nature of profit under conditions of wage labor and private property. The LTV explains the social relations of capitalism and how these relations take on concrete form; subjective value theory does none of these. All commodities have exchange value only b/c they are the product of labor.
I don't want to rehash arguments against Austrian theory of value, but ask rather: what happened to the LTV historically? And what are its implications?
Eppur si muove -- Galileo Galilei
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Is intellectual action a form of labor?
To speculate is human; to hedge, divine
Of course it is. IT workers are WORKERS.
Eppur si muove -- Galileo Galilei
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What about people like Bill Gates? Was his invention a form of labor?
To speculate is human; to hedge, divine
No, hes a scheming capitalist. He had a good idea and got rich from it? Shoot him. No more good ideas allowed in our Utopia.
Between production for profit and production for needs there is no contrast.
Ludwig von Mises, Socialism
The arguments that convinced me [that the LTV is wrong]: 1. Valuable paintings of dead artists go up and down in price. Why? Did the painter do more or less painting in the grave? 2. The house I live in is a small mansion, finely upkept, in a neighborhood gone seedy. I can't get back the labor expenses I put into it. Why not? 3. Walking down the beach today, I found a tin can and a diamond thrown up from the depths of the sea. I put the same effort into getting them both, bending down. And yet I can get much more for the diamond. Why? 4. Say a car company builds a model [The Grande Lemon] that nobody wants. It's been known to happen. They wind up having to sell it for less than their more popular models even though more labor was put into the Lemon. In fact it is technically superior in every way to every existing car. 5. Last years clothing fashions are suddenly cheaper this year, cause styles have changed. Why? The answer to all these is, of course, that their price is set by how much people, for whatever reason, are willing to pay for it. How much labor went into it is totally irrelevant.
Between production for profit and production for needs there is no contrast.
Ludwig von Mises, Socialism
The LTV concerns value.
AFAIK Bill Gates never invented a thing. He personally ported a BASIC interpreter to IBM hardware, I believe. Bill Gates a technologist? I think not.
Eppur si muove -- Galileo Galilei
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But nothing has exchange value unless it is accompanied by labor. Does this have to be explained?
Eppur si muove -- Galileo Galilei
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LTV was a cost of production theory of price formation. It only intends to account for price relationships for readily reducible commodities. It holds that, at least in the aggregate, prices of readily reproducible commodities vary with labor time.
Problems concern the fact that among the social opportunity costs (real social costs) of production is the cost of developing the skills of workers. So it's not plausible to simply use hours worked as the measure of labor cost. There is also the problem that Marx was aware of, that increased investment in labor saving equipment leads to prices of commodities not correlating with labor time.
Marx assumed that balance of supply and demand was also relevant. But he's talking about readily reproducible commodities under conditions of perfect competition. Under those conditions, LTV says that prices will correlate with hours worked.
In this case you're not talking about readily reproducible commodiites. Land also is a special case because there is a finite amount of it. Marx did not try to explain prices of land in terms of labor hours for obvious reasons.
In the case of things like scarce art works or land, Marx held it's purely a power question: How much money will some moneybags pay?
Again, LTV is not attempting to explain land prices. Land is a finite, limited item not readily expanded through social production.
Again, not a readily reproducible commodity like shoes or corn.
Marx is talking about prices of items for which there is a demand in conditions of competition. He's not supposing that there doesn't need to exist demand to have prices.
But, think about this: Suppose that the number of cars of a certain brand sold in a given year is the same as the number of copies of a particular lamp. Why is the car so much more expensive than the lamp?
Also: In your case of the lemon model, why isn't it simply produced at a very low price? In fact we know it won't be because a certain level of demand is needed to cover the costs of production. Costs of production are a floor below which prices can't fall or the item won't be produced any more. What is the basis of this floor?
The emancipation of the working class must be the work of the workers themselves.
But more labor doesn't necessarily increase exchange value, so something must be wrong.
Between production for profit and production for needs there is no contrast.
Ludwig von Mises, Socialism
Over time prices of "readily reproducible commodities" could vary with anything. Marx argues in Capital volume I that prices may not reflect the labor that went into them and therefore misrepresent their true value but he argued that in the long run it was the "tendency law" for prices to come back and reflect the labor cost. This to him was "accidental" now that answer has never proven very convincing because it seems like with that theory he could pick virtually any variable that he wanted to attribute to giving a commodity value like for instance the weight of the object.
So hes talking about conditions that aren't reflected in the real world... ever? Well damn, I wish someone had told me I could get rich from making up a theory with conditions that never occur.
And yet it still has value. The Austrian subjective theory of value explains all prices, not just ones under conditions of perfect competition and only for "readily producible commodities".
This isn't true of everything though, right? For food (lets say bread) there is one objective "correct" value (based on labor) and that if this value is lower than the value of something else (assuming you're being offered a choice) there is no subjectivity about it. You choose the one with the "higher" value no matter what.
Considering the labor theory of value and what it would imply for human nature and the universe shows us exactly how wrong that it is: The starving man does not value ipods, TV's, or even mansions, the starving man values food, so let us take this starving man, and let us produce a logical check for the labor theory of value. The starving man must desire, say, a massive palace that consumed hundreds of thousands of work hours by tens of thousands of people, infinitely more than say, a basket full of apples which I picked in half an hour from a tree that I found in the middle of the forest into which no human labor has ever been placed..... Now how many starving individuals would take this palace, assuming that no food will be available therein, would take the palace over my simple basket of apples? The answer is, very few of the intelligent ones.
So which theory should you accept:
1) The one that explains all prices/values
2) The one that only explains a very limited part of production under conditions that don't exist in reality
?
Its like you accept evolution for everybody but Man, and God made Man extra special... its silly. You have shown that land and art (at least) our subjectively valued, why can't this be true of other things?
The car is more expensive than the lamp because cars are valued more highly than lamps. However, as you mention, there are costs of production, but ultimately costs of production are decided by a consumer. I'll illustrate.
IF steel was only used to make six inch by six inch by six inch cubes that sold for 10 dollars than this would determine the price of steel (i.e. consumers value 216 cubic inches at at least 10 dollars). So anything else that came along and used steel would have to pay the price that the cube makers paid per 216 inches unless they created something that consumer's valued more with the same resources. If they did this (lets say they made something that consumer's valued at 11 dollars) the price of steel would raise because consumer's value the new use more than the old. I know this is kind of confusing, but its true that consumer's determine the costs of production through their choices.
Between production for profit and production for needs there is no contrast.
Ludwig von Mises, Socialism
Ok, how about a real inventor. Should he not receive a greater compensation for his labor, given that an invention is infinitely reproduceable, therefore it will greatly improve the lives of everyone else?
BTW, what i'm talking about is not intellectual property.
To speculate is human; to hedge, divine
Why? Why is it nessesary? I guarantee you its more satisfying to invent something than to produce something, but in my opinion that should be a democratic desicion, as far as gates, the fact is he was'nt an inventor, but even if he was, its irrelivent, because his wealth was not a result of his inventing.
One problem that always comes up in arguemtns between socialists and marketists is that the only way we have right now to measure value and compensation is the capitalist monitary system which radically distorts value.
I've heard the arguemtn many many times that if everyone was equal we would all be like a lower middle class person in india, that argument is absolutely rediculous because its going by dollar amounts and not production capacity.
Granted that supply-and-demand is important to understand some things re the economy: price fluctuations, inflation, etc. But if we want to understand deeper meaning behind the substance of bourgeois economics, other tools are called for. This is what the LTV is all about. Nothing in bourgeois economics allows us to see, e.g., the passing of the social surplus from exploited to exploiter.
Eppur si muove -- Galileo Galilei
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I think your first flaw is labeling it "bourgeois economics". The adjective "bourgeois" is used to preemptively discredit something because... it isn't Marxist? Its silly. Like "bourgeois" logic... what is that?
What does the LTV do? If its a tool, what is its use? As I've said you could just as easily assign value based on weight; the amount of labor that goes into something in no way affects people's subjective valuations (example: a diamond I find on the ground can sell for just as much as a diamond that took many labor hours to mine).
Between production for profit and production for needs there is no contrast.
Ludwig von Mises, Socialism
The LTV explains how capitalism inherited the historically mediated relations of ruler and ruled, exploiter and exploited, from slavery and feudal societies.
Eppur si muove -- Galileo Galilei
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trivas7, what are you?
How? From what I know it says that value only comes from labor (which is demonstrably false). If it as... that other guy says (Sorry forgot your name, too lazy to go check) and it only applies to readily producible consumer goods in conditions of perfect competition than it is
a) extremely limited (only applies to things like pies)
b) doesn't/can't exist (perfect competition never occurs)
Between production for profit and production for needs there is no contrast.
Ludwig von Mises, Socialism
Read Marx or the other many threads on this subject to answer this question. In this thread I'd like to stick to the questions asked in the OP: what happened to the LTV historically, and what are the implications if true?
Eppur si muove -- Galileo Galilei
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