Classical/Marxian Labor theory of value for dummies

[RGacky3]

First off there are many labor theories of value, this is just a basic basic overview. Karl Marx did not invent the labor theory of value, he added to it, and applied it to his economics, Adam smith and David Ricardo had different versions, even Aristotle, St Thomas Aquintes and as far as Benjamin franklin had theories based on the labor theory of value.

The basic theory is that the value of a commodity is based on the labor put into it, so origionally you have raw materials and capital, those things are bought at a price generally also based on labor, and then you mix it with labor, which creates the added value of the commodity. So basically the value is all the material value that went into creating the commodity PLUS the value.

Now when we say value, we are talking about an objective measure, we are not talking about what people as individuals value certain thing (so maybe value is'nt the right word), we are talking about a basic point on which exchange values are based, you could say its what commodities would be priced if supply and demand are at equilibrium.

A commodity are things, (when we are discussing the LTOV) which are consumer goods (many would include services, as would I) and valued based on their use value. So for example, a hat is a commodity, and its value is based on the fact that you can wear it and keep your head warm and so on and so forth, but if you have a hat that was given to you by your father before he died that was his favorate hat you are not going to sell that hat for the market prices of a regular hat, that price will not be a commodity price, you have added sentimental value, the LTOV is NOT talking about that, its NOT talking about stocks and bonds, which are not commodities they are loans and non material capital, it is NOT talking about pieces of art who's value is sentimental, the LTOV is talking specifically talking about commodities based on use value.

Now when you put supply and demand in the mix you get price, so for example a bottle of water is generally not that expensive in a competative market, and it generally has a low labor value as well, but when your at a music festival, where you have a supply and demand situation totally out of whack and you'll have prices much higher, the LTOV is NOT talking about that.

So why is the labor theory of value important? Well it gives you an idea of a basic price that supply and demand will derive the market price from, and it also (especially when it comes to Marxian economics), shows the source of value and profit.

Many opponents of the LTOV like to bring up the buggy vrs a car example, i.e. a carriage and a car take a similar amounf of labor to produce, yet most people weould value a car more, Sure, but go out and buy a carriage, lets say your a movie producer or a collector, and you want a carriage, its gonna cost you, because as demand dropped so did supply, but the price is STILL based on the labor time, which will be significant.

Any time, the market value drops below the labor value of a product, it will stop being produced.

You can basically track this overtime, the supply and demand of computers has'nt changed that significantly overtime, as more computers have been made more people have wanted them, but the prices have dropped, why? productivity means that it can take less labor to produce a computer, the same is the case with most commodities, (in this sense the supply and demand is effected by the Labor value, in the sense that productivity increases allow for more potential supply, meaning less labor time is used in production per unit).

Now what do we mean when we say labor? We mean all muscle and brain power put into the production, So software production is not just printing the CDs, is finding the concept, writing the code and so on. This gets rid of the argument that neo-liberals have in their constant and desperate defences of capitalists when they say "But the bosses also contribute a lot, they come up with ideas and so on," YES, sometimes they do, and that is included, but whether of not their compensation is based on their labor is the subject of a different discussion.

So as Industry develops ways to produce MORE per hour of labor, even if the supply and demand is the same, the price will drop, because the value has dropped.

The implications of this theory are different, but for Marxists, and most Socialists, the implication is that of exploitation, the Capitalists profit is derived from extracting excess value from labor, along with other implications. However for other economists its implications are different, such as propertarians arguing that the value created from labor insinuates ownership of land for example.

[RGacky3]

BTW, I would'nt be opposed to the CC here making my for dummies threads about the LOTV and the tendancy for the rate of profit to fall stickies, if the Marxists here agree with my basic overviews.

[Marcist]

What about Mises criticism of LTV?

[Genghis]

First off there are many labor theories of value, this is just a basic basic overview. Karl Marx did not invent the labor theory of value, he added to it, and applied it to his economics, Adam smith and David Ricardo had different versions, even Aristotle, St Thomas Aquintes and as far as Benjamin franklin had theories based on the labor theory of value.

The basic theory is that the value of a commodity is based on the labor put into it, so origionally you have raw materials and capital, those things are bought at a price generally also based on labor, and then you mix it with labor, which creates the added value of the commodity. So basically the value is all the material value that went into creating the commodity PLUS the value.

Now when we say value, we are talking about an objective measure, we are not talking about what people as individuals value certain thing (so maybe value is'nt the right word), we are talking about a basic point on which exchange values are based, you could say its what commodities would be priced if supply and demand are at equilibrium.

A commodity are things, (when we are discussing the LTOV) which are consumer goods (many would include services, as would I) and valued based on their use value. So for example, a hat is a commodity, and its value is based on the fact that you can wear it and keep your head warm and so on and so forth, but if you have a hat that was given to you by your father before he died that was his favorate hat you are not going to sell that hat for the market prices of a regular hat, that price will not be a commodity price, you have added sentimental value, the LTOV is NOT talking about that, its NOT talking about stocks and bonds, which are not commodities they are loans and non material capital, it is NOT talking about pieces of art who's value is sentimental, the LTOV is talking specifically talking about commodities based on use value.

Now when you put supply and demand in the mix you get price, so for example a bottle of water is generally not that expensive in a competative market, and it generally has a low labor value as well, but when your at a music festival, where you have a supply and demand situation totally out of whack and you'll have prices much higher, the LTOV is NOT talking about that.

So why is the labor theory of value important? Well it gives you an idea of a basic price that supply and demand will derive the market price from, and it also (especially when it comes to Marxian economics), shows the source of value and profit.

Many opponents of the LTOV like to bring up the buggy vrs a car example, i.e. a carriage and a car take a similar amounf of labor to produce, yet most people weould value a car more, Sure, but go out and buy a carriage, lets say your a movie producer or a collector, and you want a carriage, its gonna cost you, because as demand dropped so did supply, but the price is STILL based on the labor time, which will be significant.

Any time, the market value drops below the labor value of a product, it will stop being produced.

You can basically track this overtime, the supply and demand of computers has'nt changed that significantly overtime, as more computers have been made more people have wanted them, but the prices have dropped, why? productivity means that it can take less labor to produce a computer, the same is the case with most commodities, (in this sense the supply and demand is effected by the Labor value, in the sense that productivity increases allow for more potential supply, meaning less labor time is used in production per unit).

Now what do we mean when we say labor? We mean all muscle and brain power put into the production, So software production is not just printing the CDs, is finding the concept, writing the code and so on. This gets rid of the argument that neo-liberals have in their constant and desperate defences of capitalists when they say "But the bosses also contribute a lot, they come up with ideas and so on," YES, sometimes they do, and that is included, but whether of not their compensation is based on their labor is the subject of a different discussion.

So as Industry develops ways to produce MORE per hour of labor, even if the supply and demand is the same, the price will drop, because the value has dropped.

The implications of this theory are different, but for Marxists, and most Socialists, the implication is that of exploitation, the Capitalists profit is derived from extracting excess value from labor, along with other implications. However for other economists its implications are different, such as propertarians arguing that the value created from labor insinuates ownership of land for example.

Hi Gacky,

I took your advice and came here too.

It's somewhat the same as in the previous post I replied to.

We capitalists reject the Labor Theory of Value because Marx did not take into account the risk that capital must take.

There is no assurance of profit. According to Small Business Association, half of businesses fail in the first five years:

It's often said that more than half of new businesses fail during the first year. According to the Small Business Association (SBA), this isn't necessarily true. The SBA states that only 30% of new businesses fail during the first two years of being open, 50% during the first five years and 66% during the first 10. The SBA goes on to state that only 25% make it to 15 years or more.

Put yourself in the shoes of a capitalist. Suppose there are two cooks working for a restaurant. Both receive the same wage. A spends all his money on women, wine and song. B saved up as much as he can.

After 10 years, B used his savings to start his restaurant. He hires A to help him. Now B gets a fixed salary. He gets paid whether the restaurant makes money or not.

If B's restaurant fails within five years, he lost all his money that he saved hard for during the past 10 years as a member of the proleteriat. If he makes a profit, are you going to tell him that he exploited A by stealing his labor surplus because Marx said that only labor is worthy or reward?

B hopes to make more than A in the long run. That's why he saved his money instead of spending his wages on women, wine and song like A did.

Now I want to point out something. If B succeeds, it means that his restaurant has given people something they want - good food. So he has done society some good. He also has created jobs for his workers. Now if you apply Marxian thinking, all his profits belong to his employees. Is that fair? In these circumstances, there would be no reason for B to save money and take a big risk.

Half fail in 5 years. When people see rich people owning successful businesses, you are looking at a small lucky minority. Many fail through bad luck and not because of anything they have done. So the reward must be great or people will not risk their savings.

[Revolution starts with U]

That's actually a good response, and I'm glad to see a capitalist making an effort :thumbsup:

First, tho, this scenario you are pointing out is such a small minority as to be meaningless. I would venture to guess that >99% of all big money capitalists (not petite bourgiousie, but real bourgies) inherited their money. Now, we could take Jefferson's (half joking) advice and abolish inheritance. But, as you will probably respond, is that fair, under a propertarian system, to rob her of the pleasure of providing for her children?

My second response is that workers risk their life and livelihood as well. You can make the argument that they get a fixed wage whether success or failure, but that's simply not true. If the business goes under, the worker has to go back through the greuling and dehumanizing process of finding a new job. (It took my dad 3 years to find a new job after his company shipped his to China [after seeing their largest profits in the history of the company])

Not only does the worker risk just as much, if not more, than the capitalist in any given enterprise. But there is also an incentive issue. In a normal capitalist business if you work your ass off and the company ships a few more widgets, you see nothing of that. Your incentive is to work just hard enough to not lose your job. People will be incentivised to work harder under cooperative enterprise. During the early stages of socialism, where we will still be subject to some form of labor notes, or some such tracker of productivity, good workers will be highly rewarded. (In the late stages of socialism it would be irrelevant, as surplus will have brought us to the point of free access to not only production, but goods as well).

[Genghis]

That's actually a good response, and I'm glad to see a capitalist making an effort :thumbsup:

Thanks for the compliment. You are a pretty good debater yourself. I enjoy having discussions with people whose views are different from mine and so hope to have fruitful discussions with you. I love to learn new things.

First, tho, this scenario you are pointing out is such a small minority as to be meaningless. I would venture to guess that >99% of all big money capitalists (not petite bourgiousie, but real bourgies) inherited their money. Now, we could take Jefferson's (half joking) advice and abolish inheritance. But, as you will probably respond, is that fair, under a propertarian system, to rob her of the pleasure of providing for her children?

I don't think my scenario is a small minority. Where do you get the statistic 99% from? It seems to me that family fortunes vanish after 3 or 4 generations. Large fortunes of course take longer. Take the Vanderbilts for example. When Cornelius Vaderbilt died in 1877, he was one of the richest man in the world.

But 48 years after his death, one of his descendents died penniless. That's two generations later. Today, the Vanderbilts are nowhere. You see, wealth never last long. It can go very fast if you don't have the ability to hang on to it. On the other hand, you can go from poverty to billionaire in one generation in a capitalist economy. Take Steve Jobs for example. He was poor but he died a billionaire.

My second response is that workers risk their life and livelihood as well. You can make the argument that they get a fixed wage whether success or failure, but that's simply not true. If the business goes under, the worker has to go back through the greuling and dehumanizing process of finding a new job. (It took my dad 3 years to find a new job after his company shipped his to China [after seeing their largest profits in the history of the company])

What is so grueling and dehumanizing about finding a job?

You don't lose money when you lose your job unlike the capitalist who betted his capital. You stop earning money when you lose your job.

As for your dad losing his job, I am sorry to hear that. But somebody in China got a job and a better paying one than he had before thanks to capitalism. Also consumers - you and I - can now buy the product cheaper than before because costs went down. So the sum of human material well being and perhaps happiness went up.

Not only does the worker risk just as much, if not more, than the capitalist in any given enterprise. But there is also an incentive issue. In a normal capitalist business if you work your ass off and the company ships a few more widgets, you see nothing of that. Your incentive is to work just hard enough to not lose your job.

But the flip side is that the workers got paid even when the company loses money. Its also not true that they don't see any of that. Most companies give incentive bonuses based on profits.

People will be incentivised to work harder under cooperative enterprise. During the early stages of socialism, where we will still be subject to some form of labor notes, or some such tracker of productivity, good workers will be highly rewarded. (In the late stages of socialism it would be irrelevant, as surplus will have brought us to the point of free access to not only production, but goods as well).

There is nothing to stop you from forming cooperatives right now. If your way is better more people will join your co-ops. There is nothing to stop you from living in a socialist society right now. Go form a commune amongst revleft type people. All of you share in the profits equally of your business that you start.

There is no need for a revolution which end up in killing people. If your way is good, people will join you. But that has been tried before. Robert Owen, a man I respect, tried to start a Socialist utopia. He believed that it would work so well that the rest of the world will soon imitate them.

I respect him because he wanted his revolution to be peaceful. He led by example thinking that his socialist society will be so successful that the whole world will soon imitate him. Try it. Get a bunch of like minded people together. Liquidate all your assets to buy say a farm. Sell your produce and share the proceeds equally. Put your money where your mouth is.

[roy]

Sorry, Genghis, but a bunch of us throwing everything away and starting a collective farm isn't going to do alleviate the worldwide suffering and injustice wrought by capitalism. Co-operatives are still subject to the barbarism of capitalism, anyhow.

[Genghis]

Sorry, Genghis, but a bunch of us throwing everything away and starting a collective farm isn't going to do alleviate the worldwide suffering and injustice wrought by capitalism. Co-operatives are still subject to the barbarism of capitalism, anyhow.

Ah. But it will if you succeed. Once people see how happy you are in the collective farm, everybody will want to become socialist and live like you.

[hatzel]

Ah. But it will if you succeed. Once people see how happy you are in the collective farm, everybody will want to become socialist and live like you.

I've already replied to you here but you didn't seem all that interested in carrying that discussion on...

[Revolutionair]

We capitalists reject the Labor Theory of Value because Marx did not take into account the risk that capital must take.

Risk however, does not increase the value of commodities, nor does it entitle you to anything.

If I buy slaves, I run the risk of my slaves dieing. Is that a good argument on why I should receive all of the products of the labor of my slaves?

Risk does have something to do with value though. The more capitalists invest in product X, the more labor increases the volume of product X, the lower profits are of product X.
Whether to invest in product X or not depends on the riskiness of the investment.

So inside of capitalism, investing in risky ventures can become profitable. But this logic loses its authority outside of capitalism.

If he makes a profit, are you going to tell him that he exploited A by stealing his labor surplus because Marx said that only labor is worthy of reward?

No. I am going to say he exploited labor because labor increases the value of commodities. A put in his labor for less than the exchange-value that A's labor created. The labor theory of value does not appropriate rewards.

Now if you apply Marxian thinking, all his profits belong to his employees.

The Marxist labor theory of value does not say anything about who should receive the profits. The Marxist position is the abolition of profit and money altogether.

Is that fair? In these circumstances, there would be no reason for B to save money and take a big risk.

Is it fair that landless peasants are being repressed by multinational mining corporations? Nothing is fair in this world, I don't believe in fairness under the capitalist mode of production.

[Revolutionair]

Ah. But it will if you succeed. Once people see how happy you are in the collective farm, everybody will want to become socialist and live like you.

Yes because we all know capitalists love to let socialists live...


Even when threathened by other imperialist powers, capitalists will always find funds to destroy potential socialism. Or did we all forget the Paris Commune?

[Revolution starts with U]

I don't think my scenario is a small minority. Where do you get the statistic 99% from? It seems to me that family fortunes vanish after 3 or 4 generations. Large fortunes of course take longer. Take the Vanderbilts for example. When Cornelius Vaderbilt died in 1877, he was one of the richest man in the world.

Yes, and the Rockefellers are still going strong. Most family fortunes are not lost, but strengthened. People want to discount the effect of social mobility and intergenerational mobility, but it is a real and strong force. (Interestingly enough, the countries with the highest mobility are... surprise!... the dreaded Nordic social democracies)
It's not JUST inheritance, but the amount of social and cultural capital a child recieves merely by being born to whom it was born. Children in some private schools read Plato by high school. I had read no Plato until I got to college. (Not that Plato is anything great, just using it as an example). My dad's golfing buddy (as if he could afford to golf that regularly) is not the local judge, or owner of a business which can give my kid a job with room for advancement, or get him out of trouble, etc.

And Gates was upper middle class (as far as bourgiousie definitions of class go), hardly poor. The richest person I knew until recently made 100k/year. To the vast majority of the population, upper middle class is rich as fuck. And Job's dad was a machinist, which if I recall is skilled labor, which means he had a pretty stuffed bank account as well.

What is so grueling and dehumanizing about finding a job?

Have you ever done it? It's basically just a big game for whoring yourself out. You lie, embellish, and search desperately hoping unemployment and your bank account can last until you find something. You have to piss in a cup. They ask you all kinds of questions they have no business asking. It's just a drag, and if you've done it, you should know that.

You don't lose money when you lose your job unlike the capitalist who betted his capital. You stop earning money when you lose your job.

Big difference chief

... wait, there is a big difference. The capitalist wasted 30k of his 400k bank account. The worker lost the only $1000/week she has.

As for your dad losing his job, I am sorry to hear that.

No need, wasn't my point... but thanks for the sympathy

But somebody in China got a job and a better paying one than he had before

Greuling and back breaking work in fields under the sun for next to no pay vs greuling and back breaking work in a non air conditioned factory in the heat for next to no pay... I'm not sure that's a "better job." Certainly capitalism has raised the living standards of some people in china, namely there bourgiousie and other land owners. But for most chinese the only thing that changed was the type of labor they are doing.

thanks to capitalism.

This is just as an aside, but I want to give you a materialist perspective on history. Things don't happen thanks to "capitalism" or "great men." These things happen thanks to the socialized actions of millions of people. This isn't important to the discussion... it's just a pet peeve of mine.

Also consumers - you and I - can now buy the product cheaper than before because costs went down.

Assuming we even have the money to buy it since we lost our jobs...

So the sum of human material well being and perhaps happiness went up.

Perhaps. Capitalism IS the most progressive class sytem yet to emerge, I'll give you that. But the benevolence of a dictator in no way justifies the use of dictatorial power.

But the flip side is that the workers got paid even when the company loses money.

Have you ever lost a job for a company that went under or moved overseas? The guy I'm sitting next to right now is waiting for either
1) His back paychecks
2) calling a lawyer to get his back paychecks.

Its also not true that they don't see any of that. Most companies give incentive bonuses based on profits.

To middle management maybe. Even if they do, it is scant at best; an extra $500/year maybe. Wowzers! But there are also tons of thriving and growing cooperative businesses too. This still does nothing to justify the private property/capitalist system.

There is nothing to stop you from forming cooperatives right now.

Nothing legally. Economically there is tons of things stopping me.

If your way is better more people will join your co-ops.

yes, The co-op is a growing enterprise right now. This is a good thing in my opinion. But its irrelevant to the argument for global socialism.

There is nothing to stop you from living in a socialist society right now.

Ya, there is. It's called global capitalism.

Go form a commune amongst revleft type people. All of you share in the profits equally of your business that you start.

Good for us. But we are still subject to the rule and taxation of capitalist governments, the hegemony of capitalist markets, and the tyranny of the capitalist property system. The existence of one or two cooperative businesses is irrelevant to the rapid and dynamic social change that will come along with proletarian rule.
It is in the interests of workers to completely shift the basis of society from profitarian to utilitarian means of production; this can only be done through the absolute destruction of the (private) property system. As long as their is PP there will be a powerful class of operatives whos interest is in maintaining their class privelage, through use of guns if need be... as has been repeatedly shown throughout history. How many workers movements must be put down at the barrel of a gun before people realize that bourgiousie calls for freedom are merely an expedience ready to be set aside at the drop of a hat?

There is no need for a revolution which end up in killing people.

There really isn't. Why don't you tell the ownership class to stay their arms? As long as they are willing to point guns at us for trying to provide a dignified human existince (even for those not smart and motivated enough to become new tyrants), we should probably think about pointing guns back at them.

"Assets.." and "... money." I wish I had that luxury, chief

[roy]

Ah. But it will if you succeed. Once people see how happy you are in the collective farm, everybody will want to become socialist and live like you.

Socialism isn't living on a hippy farm and splitting the rent, though. Let's say we live in a very different world and all workers decide co-operatives are a great idea. The bourgeoisie wouldn't have a bar of it. Bloodshed ensues. Besides which, it's impractical.

[Genghis]

I've already replied to you here but you didn't seem all that interested in carrying that discussion on...

Oh sorry. I did not see it. I will get back to it later. too many posts to reply to.

[Genghis]

Risk however, does not increase the value of commodities, nor does it entitle you to anything.

If I buy slaves, I run the risk of my slaves dieing. Is that a good argument on why I should receive all of the products of the labor of my slaves?

Ah but slaves are compelled to work for you. Labor is paid for on a willing buyer willing seller basis. Its voluntary on the part of employer and employee.

Why should risk not be compensated? If you don't compensate for business risk you won't get people investing. Its the lure of profits that encourage investors or bourgeoisie to risk their money. This creates jobs and come up with a product that others want to buy. This increases the well being of society.

Would you invest your hard earned savings in the above mentioned restaurant (or any other business) with the knowledge that the profits, if any, will go to all your workers? That is precisely what Marx says should happen because the bourgeoisis is allegely exploiting his workers.

So if the business fails, its your loss. If it makes money it belongs to the workers. That is effectively what marx was saying. does that make sense?

Risk does have something to do with value though. The more capitalists invest in product X, the more labor increases the volume of product X, the lower profits are of product X.
Whether to invest in product X or not depends on the riskiness of the investment.

That is correct and it is good for society. Once something is profitable, more capitalists will invest and bring down profits. Prices will be cut benefitting the consumer. One day, the profit margins will be so thin investors will put their money elsewhere.

Society benefits from lower prices. that's the beauty of capitalism.

So inside of capitalism, investing in risky ventures can become profitable. But this logic loses its authority outside of capitalism.

So far Socialists have not successfully created anything successful outside capitalism. All attempts ended in failure. Soviet Union, N Korea, Maoist china, Cambodia etc all failed so badly that you disowned them because they are embarassments. so you call them state capitalism and pretend that they are not real socialism. Show me a real example of socialism.

No. I am going to say he exploited labor because labor increases the value of commodities. A put in his labor for less than the exchange-value that A's labor created. The labor theory of value does not appropriate rewards.

The value of labor is whatever both employers and employee agree to. Its all voluntary. Only in slavery is labor not fully compensated. the slave only gets enough food to let him live.

The Marxist labor theory of value does not say anything about who should receive the profits. The Marxist position is the abolition of profit and money altogether.

OK, fair enough. Show me a successful society where money and profit is abolished. If you can't then its just pie in the sky idealism. I must say you guys have faiith. Faith by defination is belief in something that cannot be proven. I believe in God and in heaven even though I cannot prove it. You believe that a profitless and cashless society where all are equal will come someday though you can't prove it.

Moses Hess said: "The Christian... imagines the better future of the human species... in the image of heavenly joy... We, on the other hand, will have this heaven on earth."

You guys are very religious though your religion has no metaphysical beliefs.

Is it fair that landless peasants are being repressed by multinational mining corporations? Nothing is fair in this world, I don't believe in fairness under the capitalist mode of production.

That is not true.

[Genghis]

Socialism isn't living on a hippy farm and splitting the rent, though. Let's say we live in a very different world and all workers decide co-operatives are a great idea. The bourgeoisie wouldn't have a bar of it. Bloodshed ensues. Besides which, it's impractical.

Why would bourgeoisie stop you? There are already communes operating in the US.

Here is a long list communes.

Excerpt:

The term 'commune' is often used, espeecially in the press, to mean all types of intentional communities or cooperative living. We use commune only when referring to communities that share their income and resources completely, or nearly so. These communal groups below range from small to large, urban to rural, and christian monastery to secular anarchist collective.

It sounds like what you guys want to achieve. So if commie living is so good, others will join. But the majority is not buying.

So no bloodshed. Nobody stopping you from living like a true communist.
That's all a lie. The bourgeoisie is not the devil. I know your "religion" has turned the bourgeoisie as the equivalent of the devil. But its not true. Bloodshed indeed! what nonsense. Be my guest. Call one of them today and ask to join.

[Revolutionair]

Why should risk not be compensated? If you don't compensate for business risk you won't get people investing. Its the lure of profits that encourage investors or bourgeoisie to risk their money. This creates jobs and come up with a product that others want to buy. This increases the well being of society.

The medieval king took risks by conquering new lands. Should the medieval king be compensated? No, his class rule should be abolished. The same goes for the bourgeoisie. Risk is a void term because it is completely subjective.

Would you invest your hard earned savings in the above mentioned restaurant (or any other business) with the knowledge that the profits, if any, will go to all your workers? That is precisely what Marx says should happen because the bourgeoisis is allegely exploiting his workers.

So if the business fails, its your loss. If it makes money it belongs to the workers. That is effectively what marx was saying. does that make sense?

This shows you do not understand the Marxist critique of capital. Please read up on Marxism before trying again.

That is correct and it is good for society. Once something is profitable, more capitalists will invest and bring down profits. Prices will be cut benefitting the consumer. One day, the profit margins will be so thin investors will put their money elsewhere.

Society benefits from lower prices. that's the beauty of capitalism.

Let's take war as an example. Capitalists produce bombs, so the people of Afghanistan can be terrorized into submission. Then the mining rights of the minerals get sold to Chinese corporations.

That's the beauty of capitalism right there.

So far Socialists have not successfully created anything successful outside capitalism. All attempts ended in failure. Soviet Union, N Korea, Maoist china, Cambodia etc all failed so badly that you disowned them because they are embarassments. so you call them state capitalism and pretend that they are not real socialism. Show me a real example of socialism.

The state owned the means of production. As long as the state exists, I will fight against it. So it's not that I disown them, they were never mine and I would fight against them as they try to own me.

The value of labor is whatever both employers and employee agree to. Its all voluntary. Only in slavery is labor not fully compensated. the slave only gets enough food to let him live.

Bullshit.

OK, fair enough. Show me a successful society where money and profit is abolished. If you can't then its just pie in the sky idealism. I must say you guys have faiith. Faith by defination is belief in something that cannot be proven. I believe in God and in heaven even though I cannot prove it. You believe that a profitless and cashless society where all are equal will come someday though you can't prove it.

Moses Hess said: "The Christian... imagines the better future of the human species... in the image of heavenly joy... We, on the other hand, will have this heaven on earth."

You guys are very religious though your religion has no metaphysical beliefs.

Yes it's very religious to look around you and think he. This isn't much different than all the other modes of production where the working class was oppressed.

[Luís Henrique]

We capitalists

You are a capitalist? Or you mean that you support capitalism?

reject the Labor Theory of Value because Marx did not take into account the risk that capital must take.

And so, are you proposing a risk theory of value?

How would risk produce value?

There is no assurance of profit. According to Small Business Association, half of businesses fail in the first five years:

That assumes that those small business are indeed capitalist companies, which I much doubt. Owning a bakery and making ends meet by selling bread doesn't make you a capitalist. Capital is money that begets more money, and money invested in those petty bourgeois shops that don't accomplish amplificated reproduction of capital fails to reproduce.

Put yourself in the shoes of a capitalist. Suppose there are two cooks working for a restaurant. Both receive the same wage. A spends all his money on women, wine and song. B saved up as much as he can.

After 10 years, B used his savings to start his restaurant. He hires A to help him. Now B gets a fixed salary. He gets paid whether the restaurant makes money or not.

If B's restaurant fails within five years, he lost all his money that he saved hard for during the past 10 years as a member of the proleteriat. If he makes a profit, are you going to tell him that he exploited A by stealing his labor surplus because Marx said that only labor is worthy or reward?

So here is the risk that the capitalist takes: if he fails, he becomes a proletarian, one of us. So in essence you are saying that he "deserves" making a profit in order to continue to be able to... make profits.

(And, of course, should B's restaurant fail, A would lose his job; but, for some reason, he doesn't get any compensation for this risk.)

B hopes to make more than A in the long run. That's why he saved his money instead of spending his wages on women, wine and song like A did.

Which means he acts as a fool. He abstains from things that might give him pleasure, in order to make more money in the future - and by this means, to be able to buy those things he has abstained from...

Now I want to point out something. If B succeeds, it means that his restaurant has given people something they want - good food. So he has done society some good.

The problem is that such good is a by-product of the restaurant actual business, which is to make money to its owner. If B started an ammonition plant, or a cocaine refinery, he would be making profits by doing society something bad; and he would make no smaller profits because of that.

He also has created jobs for his workers.

No. Jobs aren't things that can be created; if they were, they would be sold and bought in the market, as any other thing that men can create.

Now if you apply Marxian thinking, all his profits belong to his employees.

No. This isn't Marxist thinking. What Marxists believe is that the restaurant should belong to the people, not a private person, and that it should be a place to make meals, not a place to make profits.

Is that fair? In these circumstances, there would be no reason for B to save money and take a big risk.

Exactly. There is no actual reason that anyone should save money - that is a form of collective madness. There is no reason for "running risks", either. Production should be directed by consumption, not the other way round. Which means, only necessary things should be produced, which in turn demands a better instrument than the market to verify what is and what is not needed.

Half fail in 5 years. When people see rich people owning successful businesses, you are looking at a small lucky minority.

Indeed, and that is a huge part of the problem. Another huge part of the problem is that most of the time, we are not only looking at a small lucky minority, but at the sons and grandsons of a lucky minority - people who, unlike your hypothetical B, never had to save a penny from their wages, and instead merely inherited their wealth.

Many fail through bad luck and not because of anything they have done. So the reward must be great or people will not risk their savings.

Most fail due to bad luck. It is indeed this crazed lottery that we seek to abolish. A person's access to decent food and shelter should not be at stake in a system based on blind luck.

Luís Henrique

[RGacky3]

We capitalists reject the Labor Theory of Value because Marx did not take into account the risk that capital must take.

There is no assurance of profit. According to Small Business Association, half of businesses fail in the first five years:

Risk DOES NOT ADD VALUE, is it a factor? Yes, BUt it does not add any value.

Any more than effort gives you a point in basketball.

Put yourself in the shoes of a capitalist. Suppose there are two cooks working for a restaurant. Both receive the same wage. A spends all his money on women, wine and song. B saved up as much as he can.

After 10 years, B used his savings to start his restaurant. He hires A to help him. Now B gets a fixed salary. He gets paid whether the restaurant makes money or not.

If B's restaurant fails within five years, he lost all his money that he saved hard for during the past 10 years as a member of the proleteriat. If he makes a profit, are you going to tell him that he exploited A by stealing his labor surplus because Marx said that only labor is worthy or reward?

B hopes to make more than A in the long run. That's why he saved his money instead of spending his wages on women, wine and song like A did.

Now I want to point out something. If B succeeds, it means that his restaurant has given people something they want - good food. So he has done society some good. He also has created jobs for his workers. Now if you apply Marxian thinking, all his profits belong to his employees. Is that fair? In these circumstances, there would be no reason for B to save money and take a big risk.

Half fail in 5 years. When people see rich people owning successful businesses, you are looking at a small lucky minority. Many fail through bad luck and not because of anything they have done. So the reward must be great or people will not risk their savings.

This is'nt a system of merit, its explaining what value IS and what creates it.

In a socialist system (marxism is only an analysis of capitalism), chances are the guy would be compensated pretty well anyway, because his input would be highly valued and the workers would vote to give him a good compensation.

Also your assuming a capitalism property system.

Anyway, risk, effort, and all that stuff does not add ANY concrete value.

Anymore than training adds points to an american football game.

[the zizekian]

I know your "religion" has turned the bourgeoisie as the equivalent of the devil. But its not true.

[FONT=Calibri]How is it that bourgeoisie have expanded out of original burgs? Because they have had the help of monarchies to violently enclosed their stolen pieces of the commons. [/FONT]