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Historically it was refuted by the subjective theory of value, if its true that means subjective valuations on products of the first order mean nothing and there exists an objective measure of value for some goods and services.
Between production for profit and production for needs there is no contrast.
Ludwig von Mises, Socialism
OTC, the only thing that creates exchange value in a capitalist economy is human labor. It is the productive powers of the worker that capital seeks to capture to put to use to make value. An economy is a way of organizing human labor and distributing its products. Abstract labor is the objective measure of value in all goods and services.
Eppur si muove -- Galileo Galilei
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It is necessary because he contributed more to society by inventing than just by performing physical labour.
I agree; the capitalist monetary system radically distorts value.Originally Posted by RGacky3
To speculate is human; to hedge, divine
2. Because the labour expenses around you are noticeably lower of course.
3.Because the socially required amount of labour to produce a diamond is more than a tin can.
4. I feel this one was sufficiently addressed
1 and 5 are due to the fact that LTV does not take art into consideration iirc.
Marx's theory is about generic commodities that are labeled only by category and quantity, such as bushel of corn, ton of scrap iron, square yard of cotton linen, etc. "Fungible commodities" is a common name that economists give to these.
To apply the LTV to paintings you would first have to establish a commodity exchange that deals in a unit called "a ton of paintings" with no additional information.
You can get a lot of money for the diamond, exactly as the Marxian theory would predict.
Let A = (total labor time expended in diamond mines throughout the world) / (total mass of all diamonds found in mines throughout the world)
Let B = (total labor time expended in diamond mines throughout the world) / (total mass of all diamonds found in mines throughout the world, plus the mass of the diamond that you found today)
The difference between A and B is negligible. When the diamond that you found is placed on the world market, there is no significant change in the world supply.
assuming perfect competition is a simplifying assumption that neoclassical and classical economics also do. that's because, if you don't make that assumption, you'll have to come up with a complex power theory to explain prices under a variations of bargaining power caused by a variety of factors.
this is ultimately the problem with *all* theories of prices.
haha. the "subjective' theory of prices doesn't explain prices.
for Marx "value" is understood in terms of society's investment or cost in producing something. not subjective "evaluation" of something.
I'm not here justifying Marx's view. just explaining it.
and if the starving man has no money he won't affect food prices at all...and he won't get any food unless someone gives him some. in other words, it isn't "subjective evaluation" that shapes prices but power, and the money you have available to you gives you a relative form of power in markets.
thus in a region where the jobs mix changes so that there is a higher proportion of professionals and managers making high salaries will see problems of gentrification as the increase in people with high salaries will enable them to outbid working class people for dwellings. the working class people don't suddenly value their dwellings less. it's just that now the prices become unaffordable to them.
This is silly. If people valued cars less, at some point cars wouldn't be produced. That's because what people would be willing to pay would not be enough to cover the costs of production. On your theory, the prices of cars should just keep going down as "subjective evaluation" falls.
The emancipation of the working class must be the work of the workers themselves.
You're not addressing what the Marxian theory of value says.
The theory claims that labor time is connected to a base line in the price that would be observed only if nothing unusual ever happened, if the many upward and downward tendencies related to supply and demand were to cancel each other out. (Capitalist economic theory also adds a condition of "all other things being equal", ceterus paribus, to many statements, so you should be familiar with this method.)
This quiescent base line that we can see only rarely, if ever, is called the "value".
Then, according to the Marxian theory, all of the situations in the anecdotes that you have provided, and any other idiosyncratic and temporary factors, fads, the weather, etc., produce an offset to take us from the "value" to the "price."
In the Marxian theory, the offset that points from the value to the price is of little concern and there is little discussion of it. However, the value, the base level from which the price is a departure, is of great concern.
So we don't even have an overlap here between your subject matter and the subject matter of the LTV.
In general, to refute any idea you have to mention the idea somewhere.
All other things being equal, the weight of the product will affect its value. Unless the value of the resource is high or low, in which case there will be differences. Kinda like how labor affects value, but affects it to different degrees for every single product.
So if I the labor value of milk was 1 dollar, say, and I did not think it was worth that much (I was allergic, or disliked the taste) my value judgement would be objectively wrong?
There is a difference between value and price, but this is decided by consumers. But, I guess, if I value roses at 10 labor dollars (because my girlfriend loves them, or whatever) but they sell them for 8 labor dollars that my value judgement is wrong and I should value them less.
And apparently there is an objective measure for this which consumer's have no affect on whatsoever. If they differ at all from the objective measure they are wrong.
Between production for profit and production for needs there is no contrast.
Ludwig von Mises, Socialism
No, your value judgement wouldn't be wrong, it's just that the word "value" is being used in two different senses side-by side, as I would be using the word "pen" in two different senses if I said: I wrote a letter with a ballpoint pen about the time I saw a pig in a pig pen. The two uses of the word are homonyms.
A "value" in economics is a result that we are all informed has turned out to be, whether we like it or not. It's not anyone's value judgement.
Even if we were all opinionated, devoted, brainwashed, hypnotized, or otherwise of a mind set that there should be a new car for $1, and a bottle of milk for $10,000, it still couldn't be so. It's too inconsistent with the degree of difficulty involved in having industry make these respective articles.
Even if Marx was wrong in focusing exclusively on socially necessary abstract labor time and he has forgotten something, it would still remain true that value arises from something in the manufacturing process, and it is not determined by the psychological states of any of the participants.
There is no objective value, which the LTV tries to establish
There is no objective value. Labor can go into a mudpie and it will still be worthless. An industrial process can go into a mudpie and its still worthless.
What do you mean? If cars sprang from cows utters and milk had to be manufactured in the way cars do (through long processes that is capital intensive and requires lots of resources that consumers do) of course this could be the case.
Okay so why did horse carriages drop in value even though they were manufactured the same way after automobiles came to be widely used? Nothing changed in the manufacturing process, nor in the labor time.
Between production for profit and production for needs there is no contrast.
Ludwig von Mises, Socialism
LTV can be regarded as a theory of social investment in making things. To say, "well why is there any value just because someone does work? I might dig holes and fill them in" misses the point. There are a variety of historical or possible systems of social production. within such a system the system's logic itself will tend to lead to a certain amount of labor being invested in making various things. the labor time to do this is one measure of society's investment in making that product, in the context of that social arrangement. and labor time is objective.
of course there may be a complete mismatch between what would be most desireable, from the point of view of meeting desires, and what is invested in via labor time in that social arrangement. certainly this is true of capitalism. but market prices in capitalism do not capture effectively actual social utility, or value in terms of desires of the population, for a whole variety of reasons...problems of public goods and "free riders", externalities, ability to dump costs onto workers in social production (another form of externality), etc.
The emancipation of the working class must be the work of the workers themselves.
LTV applies to items/things that have utility value, therefore mudpies would not apply.
I don't know why anyone uses that red herring anymore...
"Win, lose or draw...long as you squabble and you get down, that's gangsta."
So what? he also had a much more fullfilling work, but thats not the point, the point is in a society without property distribution is not an issue, if there is not enough of something then its handled democratically.
No it does'nt, what it says is that capitalits live off excess value, it does'nt try and give objective value amounts to anything.
So what?
Imagine i'm in a commune. If I contribute nothing, would you allow resources to be spent on me? What would happen if a lot of people started demanding something for nothing?
Similarly, the more someone contributes, the higher rewards he should get. Intellectual labor is much more valuable than pure physical labor by the simple fact that it is infinitely reproduceable.
If it's not too out of context, let me quote Rand on this:
Originally Posted by John Galt
To speculate is human; to hedge, divine
Why on earth would that happen? If there is nothing in the community, there is nothing, so no one gets anything, but if your giong to an incentive argument its been disproven countless times.
In a society without property how on earth is there reward?
Do you know of a commodity exchange where people trade in mudpies, so that you can observe the actual trend? You're making an assertion about the behavior that occurs whenever people trading in a particular commodity, but it isn't a commodity in the first place.
A builder can get a truckload of dirt delivered for backfill for about a hundred dollars. The labor that goes into excavation and trucking gives it some exchange value. There is no reason to form pie shapes out of the dirt before dumping it into the hole.
There are some pre-industrial countries where people build houses out of slabs of sunbaked mud. If you were to go there and set yourself up in business dealing in such building materials, you would find that a very limited price range immediately appears due to the degree of effort that someone must expend to produce and deliver them.
If there is nothing in the community, how do people survive? Ugh you are so dense.
So there won't be personal property? Ouch...Originally Posted by RGacky3
To speculate is human; to hedge, divine
You expect us to assume that your citing actual data. Do you have some old catalogs advertising horse carriages before and after the introduction of the automobile? We know that the quantities manufactured and sold were reduced, but a reduction in throughput quantity isn't the same as a reduction of unit price.
In addition, if insist on using the words "price" and "value" interchangably as synonyms, then you have already closed yourself off from investigating a theory that they are not the same thing but related in certain ways.
When you see something rise or fall in price that doesn't always mean that it rose or fell in value. Sometimes the new price reflects a new value, and sometimes it doesn't. There are many factors that can make a price offset from the value or oscillate around the value.
This is a very easy concept. You shouldn't have so much trouble with it. With the many steps and processes that go into making a car, it's a reasonable estimate that there is about 10,000 times as much human effort materialized in producing a car than there is in a single bottle of milk, and therefore about the same 10,000 ratio in the costs of production that their manufacturing companies have to invest for these two kinds of items, and therefore there will be about the same 10,000 ratio in the price tags that they stick on these two items. Can you visualize that, without worrying about the detail that cars are not secreted from mammalian udders?
