How important is the labor theory of value to communist doctrine?

[The Garbage Disposal Unit]

Yeahokcallmewhenyourcomputermakesababycomputer.
But, for real, machines don't create value in the same way people do, since technology, in the proper sense of technique, represents moving labour around, not doing away with it. You have to look at these things in their social context (ie who makes the parts, who mines the fuel, who upkeeps the power grid, who delivers the machines, etc.), and not in isolation: the box cutter I used every day at work didn't emerge ex nihilo but represented dead labour in-and-of-itself.
Variable capital (you know, people) represents a certain degree of dead labour too, but also represent a force that fundamentally resists marketization, since, you know, the 24/7 affective reproductive labour which is necessary for constituting humans isn't the sort of thing you can really buy/sell (the proliferation of marketized domestic labour is effecting it, but not really changing it fundamentally).

[Baseball]

Except that that's the whole point of communism/socialism. The elimination of appropriation of surplus by another class, and a return to its appropriation by the producers themselves, to be democratically and collectively managed.

(They can then do what they want with it, including giving some of it to those who aren't themselves able to produce.)

If you don't understand capitalism or communism (or feudalism, etc. for that matter) in terms of the social relations of production, then how can you claim to understand them at all? There's certainly a substantive difference to the people involved.

Its called a profit. How it is managed and directed is beside the point.
The objective would remain to produce in order to produce a profit.

[Paul Cockshott]

Its called a profit. How it is managed and directed is beside the point.
The objective would remain to produce in order to produce a profit.

No it is called tax.

[RedMaterialist]

Its called a profit. How it is managed and directed is beside the point.
The objective would remain to produce in order to produce a profit.

It is the objective of a capitalist to produce in order to make a profit, by not paying someone for the work they do. They accomplish this by producing only for the purpose of selling. It's a modern form of slavery, aka wage-slavery. Socialists, on the other hand, cooperate for the benefit of society by producing goods for their utility to society, not in order to make a profit.

A capitalist, in fact, cannot make a profit except by paying a worker a wage which is less than the value the worker produces. All value produced under socialism will remain the property of the workers and those who need help; society keeps the 'use-value,' not the capitalist. This is why a capitalist is only interested in exchange value and never use value.

Listen to a commodity speak: Our use value may be a thing that interests men. It is no part of us as objects. What, however, does belong to us as objects, is our value. Our natural intercourse as commodities proves it. In the eyes of each other we are nothing but exchange values. (Marx, Capital, Vol I, Part 4.)

A socialist is only interested in use values.

[liberlict]

The difference is who appropriates and distributes the surplus.

O.K, but this is not going to lead to an egalitarian society. Unless you believe all productive laborers are voluntarily going to 'appropriate' the fruits of their labor to the less able. You're still going to have a class society. I don't see what will have been achieved.

[liberlict]

Except that you're using exploitation in a normative sense. In capitalism (and other modes of poduction), exploitation is the systemic feature that causes workers to receive less than the value of their work, and that surplus being appropriated by the capitalist class.

In socialism/communism, workers (everyone) are free to dispense their surplus how they see fit, including a social safety net.

Really? So if the most productive decide they want to hoard all their produce and not share it, they are allowed to?

[Remus Bleys]

O.K, but this is not going to lead to an egalitarian society. Unless you believe all productive laborers are voluntarily going to 'appropriate' the fruits of their labor to the less able. You're still going to have a class society. I don't see what will have been achieved.

And thus, liberlict outline the beginnings of a brilliant critique of so called market socialists and certain types of trotskyists, who uphold distribution over production (showing.they don't really understand marxs critique of capitalism)

Ill make a commie out of you yet.

[argeiphontes]

O.K, but this is not going to lead to an egalitarian society. Unless you believe all productive laborers are voluntarily going to 'appropriate' the fruits of their labor to the less able. You're still going to have a class society. I don't see what will have been achieved.

Speaking for the market socialist idea, perfect equality isn't required. 'Class' is a relationship to the means of production, not just having more money. In capitalism, such a person or group can acquire means of production and start hiring labor to work it, but in market socialism they can't. For someone to be rich, their work would have to produce lots of value, which usually isn't possible for a single person. But if it is, it's unclear why they're not entitled to the full value of it like everyone else. No doubt, somebody will get rich for whatever reason, but it doesn't destroy the system because they have the same relation to capital as everyone else.

To grow a firm, you have to add people, and every person you add to a firm gets a share of the profits. The firm produces more, so it balances out, and there is downward pressure on firm size. There's no requirement for equality within any firm, but everything is subject to democratic control. (Mondragon has a 1:4 maximum dispartity right now, which was voted in by the members.) There's still a labor market, so people don't have to just accept any working conditions. Markets will help market socialism be egalitarian, since Marx described a tendency for rates of profit to equalize.

There's a tax on the capital of firms, so that money can be used for whatever purpose, including social welfare or a guaranteed basic income scheme, just like taxes in any democracy.

Of course, market socialism isn't communism, so none of this could work in real life.

[liberlict]

Speaking for the market socialist idea, perfect equality isn't required. 'Class' is a relationship to the means of production, not just having more money. In capitalism, such a person or group can acquire means of production and start hiring labor to work it, but in market socialism they can't. For someone to be rich, their work would have to produce lots of value, which usually isn't possible for a single person. But if it is, it's unclear why they're not entitled to the full value of it like everyone else. No doubt, somebody will get rich for whatever reason, but it doesn't destroy the system because they have the same relation to capital as everyone else.

To grow a firm, you have to add people, and every person you add to a firm gets a share of the profits. The firm produces more, so it balances out, and there is downward pressure on firm size. There's no requirement for equality within any firm, but everything is subject to democratic control. (Mondragon has a 1:4 maximum dispartity right now, which was voted in by the members.) There's still a labor market, so people don't have to just accept any working conditions. Markets will help market socialism be egalitarian, since Marx described a tendency for rates of profit to equalize.

There's a tax on the capital of firms, so that money can be used for whatever purpose, including social welfare or a guaranteed basic income scheme, just like taxes in any democracy.

Of course, market socialism isn't communism, so none of this could work in real life.

Yeah, market socialism doesn't suffer from logistical problems and fantasies associated with 'pure' socialism'. It's a completely different kettle of fish. I'm something of a market socialist myself.

[liberlict]

That's not really exploitation, nobody is accumulating capital. The point of socialist society is produce an abundance of use values for all not just who can afford it, however Marx already realized how something called 'bourgeois right' needs to be enforced in situations of scarcity. You need to read the rest of gotha, it's in there.

I don't see this as any more exploitive than following Marx's recommendation to extract some surplus value to afford maintenance, disaster relief, and expansion of the means of production.

"From each according to his ability, to each according to his needs" describes communism, a system of abundance and free access. Only in socialism, which endures scarcity', is this 'welfare' even remotely an issue.

I thought I was defining 'exploitation' the same way communists define it--workers not receiving the full value of the labor. Where this 'stolen' value goes seems to me to be a different issue altogether.

[Queen Mab]

I thought I was defining 'exploitation' the same way communists define it--workers not receiving the full value of the labor. Where this 'stolen' value goes seems to me to be a different issue altogether.

The labour theory of value is a critique of political economy, not a universal law. There are no commodities in a communist society.

[liberlict]

The labour theory of value is a critique of political economy, not a universal law. There are no commodities in a communist society.

The things that get produced by workers, you can call that what you want, makes no difference.

[Ledur]

I don't think proffering value to commodities is limited to human labor. Contrary to Marx and Ricardo, I think machines proffer value as well. I detail this in the paper "Automation Won't Save Capitalism" at risparty.org.

From Wikipedia:

When speaking in terms of a labor theory of value, value, without any qualifying adjective should theoretically refer to the amount of labor necessary to the production of a marketable commodity, including the labor necessary to the development of any real capital employed in the production.

Yes, machines are a part of the 'value'.

[Red Shaker]

The labor theory of value says that the value of a commodity is determined by the socially necessary labor time used to produce it. The labor time needed to produce a finished product has many components. Think about a wood table. The tree has to be grown. It has to be made into lumber. The lumber has to be formed into table parts and assembled. The table has to be painted. A worker added value at each step in this process. But value also came from the ax that cut the tree down, the saw at the mill where the lumber was made, and the lathe that was used to form the lumber into table parts. The value of the table is the sum total of the value of all the commodities used up in the process of producing the final product. The value of the ax, the saw and the lathe are determined by the labor time it took to produce them. If the ax took 180 minutes to produce and it can cut down 180 trees before it breaks then it transfers one minute of value to each tree it cuts down.

[liberlict]

The labor theory of value says that the value of a commodity is determined by the socially necessary labor time used to produce it. The labor time needed to produce a finished product has many components. Think about a wood table. The tree has to be grown. It has to be made into lumber. The lumber has to be formed into table parts and assembled. The table has to be painted. A worker added value at each step in this process. But value also came from the ax that cut the tree down, the saw at the mill where the lumber was made, and the lathe that was used to form the lumber into table parts. The value of the table is the sum total of the value of all the commodities used up in the process of producing the final product. The value of the ax, the saw and the lathe are determined by the labor time it took to produce them. If the ax took 180 minutes to produce and it can cut down 180 trees before it breaks then it transfers one minute of value to each tree it cuts down.

Yeah we all understand what it is. We're wondering if it's correct or not.
How is labor valued when the value is labor itself? What about services that don't actually produce anything, but satisfy some want or need?

[Ledur]

How is labor valued when the value is labor itself?

You mean, when someone is working without any tool?

What about services that don't actually produce anything, but satisfy some want or need?

Cleansing, for example? They have their value too, calculated in the same fashion.

[Comrade #138672]

Communism without LTV is impotent. It is utopian socialism at best. LTV is absolutely necessary to understand capitalism and socialism in a scientific way.

I don't think proffering value to commodities is limited to human labor. Contrary to Marx and Ricardo, I think machines proffer value as well. I detail this in the paper "Automation Won't Save Capitalism" at risparty.org.

Machines embody previous (dead) labor, i.e. constant capital. When machines are used in the production process, they transfer a part of their value to the produced commodities, by their wear and tear.

If you're a Marxist, it's key to understanding the process of commodity production under capitalism. It's an objective tool to determine how commodities achieve value and how labor is center to that value. It doesn't really contain judgements as to the process itself -- that is, it doesn't critique the capitalist system itself and an argument for communism isn't necessary for it to work. Rather, Marx uses his LTV as a basis to explain what he has pointed out to be exploitation of the worker. But would an LTV analysis necessarily lead to communism? I don't think so.

Marx also used LTV to demonstrate how capitalism is inevitably going to collapse (the tendency of the rate of profit to fall), which must bring about socialism.

Yeah we all understand what it is. We're wondering if it's correct or not.
How is labor valued when the value is labor itself?

That is even easier (although highly unrealistic in present-day capitalism). The value of a commodity is W = c + L, where c is the constant capital and L is the performed labor. When no constant capital is consumed, just assume c = 0. Thus, W = L, which means you can talk directly about the raw socially necessary labor-time without having to deal with c.

What about services that don't actually produce anything, but satisfy some want or need?

You have to conceive of services as services producing value.

[Niccolo]

Emphasis added is mine.

The Labour Theory of Value is central to an understanding of the economics of capitalism because capitalism is commodity production par excellence, and the Labour Theory of Value basically explains what fixes the value of a commodity. At one time there were rival theories of value, but now academic economics tends to deny the need for such a theory.

All you need, they say, is a theory of price. We shall see, however, that prices cannot be explained without recourse to the concept of value. First, some definitions. Wealth is anything useful produced by human labour from materials found in nature. In capitalist society, Marx said, wealth takes the form of an immense accumulation of commodities. A commodity is an article of wealth produced for the purpose of being exchanged for other articles of wealth. Thus commodity production is an economic system where wealth is produced for sale, for the market. In its simple forms it exists only on the outskirts of non-commodity producing societies where wealth is produced directly for use, either by the producers for themselves or by a subject class for their masters. In the beginning commodities were bartered, but as commodity-production developed one commodity came to assume a special role: it became the universal equivalent, for which all commodities could be exchanged and vice versa; it became, in short, money. Here we have a problem for the science of political economy: what determines the proportions in which commodities exchange one for the other?

[. . .]

One conclusion we can draw from the fact that commodities consistently exchange for one another in fixed ratios is that all commodities must share some common characteristic to a greater or lesser degree. What? As articles of wealth all commodities share two characteristics: they are useful and they are products of human labour. Which of these could provide a standard? Some have suggested usefulness (or utility), but the trouble here is that the same article can be useful to a greater or lesser degree to a different person. Usefulness is a personal matter: a personal relation between the commodity and its consumer. So utility would be a changing, subjective standard and could not explain why commodities consistently exchange at stable ratios. We are thus left with commodities as products of human labour.

[. . .]

But how does labour determine the value of a commodity? The value of a commodity, said Marx, is determined by the amount of socially necessary labour contained in it or, what is the same thing, by the amount of socially necessary labour-time spent in producing it from start to finish. Note that the Labour Theory of Value does not say that the value of a commodity is determined by the actual amount of labour contained in it. That would mean that an inefficient worker would create more value than an efficient worker. By socially necessary is meant the amount needed to produce, and reproduce, a commodity under average working conditions, e.g. average productivity, average intensity of labour.

[. . .]

Accepting this as an empirical observation leads us to looking at some ratios and whatnot which hint at some pretty devastating inherent problems with capitalism.

Marx isolated the capital invested in hiring the workers because, the only source of new value being the exercise of labour power, this was the part of the capital which increased to provide free for the capitalist a profit, or surplus value, of in this case £20,000. Marx called this part the variable capital (v). The other part invested in the factory, machines, etc. was just as essential to production but its value was only transferred to the final product without any change in its size. Which was why Marx called it constant capital (cc). There are various relations between total capital (C) and its components:

s/C or s(cc + v) is the rate of profit
s/v is the rate of surplus value
cc/v is the organic composition of capital

The organic composition of capital expresses in value terms the technical relationship between the productive apparatus and the number of workers needed to operate it, what academic economists would call the degree of capital intensity.

As can be logically seen, with capital intensity increasing, so does the organic composition of capital, meaning the rate of profit falls as the ratio of dead labour to living labour increases, ceteris paribus.

[Red Shaker]

A service is a commodity and its value is the socially necessary time to produce it. The value of labor for the purpose of exchange is expressed in the money commodity which in turn is related to the value of gold. The value of gold is the socially necessary time to produce it. For example if it takes one hour of labor time to produce an ounce of gold it can be exchanged for some other commodity that can be produced by one hour of labor time.

[Ledur]

A service is a commodity and its value is the socially necessary time to produce it. The value of labor for the purpose of exchange is expressed in the money commodity which in turn is related to the value of gold. The value of gold is the socially necessary time to produce it. For example if it takes one hour of labor time to produce an ounce of gold it can be exchanged for some other commodity that can be produced by one hour of labor time.

Oh here comes my greatest doubt about LTV.

Would raw materials have the same way of calculation?

Raw materials have a price, adjusted partially by supply and demand, and partially arbitrarily (artificial scarcity - more profits).

Today a oil barrel costs around 100 US$, in a highly lucrative activity... that is, workers are VERY "exploited" (Marxian term)... surplus value in this activity is hundreds of times their wage.

If we use LTV, wouldn't oil be a small part of the "value" it is today, thus making it very cheap?

Another (simpler) example, a worker takes an hour to mine a diamond. Suppose the tools to mine a diamond have a not-so-high value. With one day of my work, could I take this diamond?