Talk:Labor theory of value

Incorrect statement in section History / Karl Marx

“Finally, it is not labor per se that creates value, but labor power sold by free wage workers to capitalists. Another distinction is between productive and unproductive labor. Only wage workers of productive sectors of the economy produce value.”

This is incorrect, Marx does not specify that wage labor is necessary for the production of value, but simply labor having as its result a commodity to be exchanged. This labor doesn’t have to be performed as wage labor: the laborer could, alternatively, own the product of their own labor and sell it themselves. This would still count as production of value. The snippet shouldn’t be removed entirely but simply modified to reflect this, as the fact that the product exchanged must be exchanged in order to be realized as “value” is still an important component of Marx’s definitions.

In Capital Volume 1, Chapter 1, Section 1:

“Let us now consider the residue of each of these products; it consists of the same unsubstantial reality in each, a mere congelation of homogeneous human labour, of labour power expended without regard to the mode of its expenditure. All that these things now tell us is, that human labour power has been expended in their production, that human labour is embodied in them. When looked at as crystals of this social substance, common to them all, they are – Values.

We have seen that when commodities are exchanged, their exchange value manifests itself as something totally independent of their use value. But if we abstract from their use value, there remains their Value as defined above. Therefore, the common substance that manifests itself in the exchange value of commodities, whenever they are exchanged, is their value. The progress of our investigation will show that exchange value is the only form in which the value of commodities can manifest itself or be expressed.”

And later in the same section:

“A thing can be a use value, without having value. This is the case whenever its utility to man is not due to labour. Such are air, virgin soil, natural meadows, &c. A thing can be useful, and the product of human labour, without being a commodity. Whoever directly satisfies his wants with the produce of his own labour, creates, indeed, use values, but not commodities. In order to produce the latter, he must not only produce use values, but use values for others, social use values. (And not only for others, without more. The mediaeval peasant produced quit-rent-corn for his feudal lord and tithe-corn for his parson. But neither the quit-rent-corn nor the tithe-corn became commodities by reason of the fact that they had been produced for others. To become a commodity a product must be transferred to another, whom it will serve as a use value, by means of an exchange.) Lastly nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value.”

And from Chapter 2:

“On the other hand, they must show that they are use-values before they can be realised as values. For the labour spent upon them counts effectively, only in so far as it is spent in a form that is useful for others. Whether that labour is useful for others, and its product consequently capable of satisfying the wants of others, can be proved only by the act of exchange.”

Just noting my agreement with this. I will likely correct this at the same time I fix the other text that confuses value, exchange value, use value, labour, abstract labour and concrete labour. KetchupSalt (talk) 19:34, 23 July 2022 (UTC)

"socially necessary abstract labor"

The section "Distinctions of economically pertinent labor" states

In his terms, value is the 'socially necessary abstract labor' embodied in a commodity

This is incorrect. With Marx, abstract labour is the source of exchange value, not value. Value is socially necessary labour time (SNLT). The following three relations hold: abstract labour => exchange value, concrete labour => use value and SNLT => value. I will change this in a few days if I see no objections. The sentence "Finally, it is not labor per se that creates value, but labor power sold by free wage workers to capitalists" is similarly incorrect but I see it has its own section on this talk page. KetchupSalt (talk) 19:14, 23 July 2022 (UTC) I also see the sentence

[Bichler and Nitzan] argue that, according to Marx, the value of a commodity indicates the abstract labor time required for its production

contains the same error. KetchupSalt (talk) 19:29, 23 July 2022 (UTC)

Finance is not an industry

The sentence

Capital intensive industries such as finance may have a large contribution of capital, while labor-intensive industries like traditional agriculture would have a relatively small one.

works poorly since finance is not an industry. Finance concerns itself with circulation, not production. An actual capital-heavy industry like say microchip fabrication would be a better example. KetchupSalt (talk) 19:22, 23 July 2022 (UTC)

Finance is an "industry" in the way the term is also used to mean "economic sector", e.g. "employment in hospitality, employment in finance, employment in light manufacturing". But I agree it is not "capital-intensive" one, like specialized plants for building specific items is. It's more "capital monitoring" than anything. JesseRafe (talk) 17:16, 25 July 2022 (UTC)

In the context of Marxian value theory, which is what that section is about, finance is not an industry, because finance is not productive. Finance is finance. Finance does not create value, it merely facilitates value realization and investments. It is of course a sector, I agree.

It is very important to keep these things separate when one is talking about surplus value extraction and where it happens, and of the rate of profit, which is what that paragraph is about.

Small aside: I think the paragraph should say "coffee machine" not coffee maker, since the latter may read as a job (variable capital) rather than a depreciating machine (constant capital). But maybe that's just because I'm not a native English speaker.

Perhaps I can take a stab at rewriting the paragraph a bit and post it here for review because there's some other problems like what exactly is meant by "value added by amortized capital". Does it refer to the mass of constant capital or the rate of depreciation of the fixed part of constant capital? KetchupSalt (talk) 09:08, 26 July 2022 (UTC)

"A generalization"

This section is simply wrong and strikes me as trying to make a hen out of a feather. Marx repeatedly makes the point that machines do not create value, they merely transfer it and add their depreciation on top. Machines can only perform work, not labour. A short review of the cited papers follows:

The Pokrovskii paper: does not properly distinguish between work and labour. The quote "Marx could suggest that the substitution affects the mechanism of production of value" is especially telling, because Marx spills much ink emphasizing that machines do not create value, only use-values. Marx "could" follow Pokrovskii's reasoning but he doesn't, for reasons that are apparent to anyone who has read Capital.

The Beaudreau-Pokrovskii paper: here a unit conversion to MJ/$ similar to the Pokrovskii paper is done. "For example, the growth rate of the use of labour in production appeared to be less than the growth rate of output in developed economies, the fact which prompted scholars to look elsewhere" this is entirely expected from Marx' theory. Capital deploys ever-more productive machinery, thus lowering the value of the relevant commodities. More of the same use-values are produced for the same unit of labour. The resulting change in the nature of labour is also anticipated by Marx. The concrete forms of labour change, but the fact that abstract labour is the sole source of value does not. There is also an attempt to suggest that machines can run themselves, which is not the case with actually existing machines: "Today, we are witnessing another fundamental transformation as control devices and information technology are rapidly transforming the workplace, rendering human forms of supervision redundant". So the paper goes on.

I do not have a copy of the Beaudreau book, but I see no mention of Marx in summaries of it.

I wouldn't be opposed to mentioning other value theories in this page, but passing them off as extensions of Marx' LTV when they are clearly rejections of it amounts to spreading falsehoods. KetchupSalt (talk) 10:23, 3 October 2022 (UTC)

agreed ProofCreature (talk) 21:07, 7 October 2023 (UTC)

Not Marxist

This article doesn't merit as much association with Marxist economics as it seems to have. The concept is Smith & Ricardo's. Marx's economics deviates from the concept. The quote in the article itself supports the distinction.

From the Karl Marx Section

Contrary to popular belief Marx never used the term "Labor theory of value" in any of his works but used the term Law of value, Marx opposed "ascribing a supernatural creative power to labor", arguing as such:

Labor is not the source of all wealth. Nature is just as much a source of use values (and it is surely of such that material wealth consists!) as labor, which is itself only the manifestation of a force of nature, human labor power.

I suggest removing Marx's picture and the Marxian Economics Portal link , replacing the later with an Economics Portal link. ProofCreature (talk) 21:06, 7 October 2023 (UTC)

Marx is known for the "labor theory of value" - though of course he expanded on the theory. Therefore we should leave it as it is.--Jack Upland (talk) 01:48, 8 October 2023 (UTC)

He expanded on it, yes, and so his contributions should be included, but the emphasis on Marx is amplified beyond his contributions. Smith, Ricardo, other classical (pre-Smith) economists reinvigorated the concept beyond early Aristotelian concepts. The article should highlight the long-term development for the theory and limit the contribution by only Marx. As it stands the article certainly exhibits a bias.

ProofCreature (talk) 12:48, 8 October 2023 (UTC)

I am in favor of improving on the history of value theory on this page, and the focus on Marx may or may not be WP:UNDUE. But at the same time there are hardly many Ricardians these days, and those that claim to follow Smith are almost always neoclassicals. Many liberals believe the LTV starts with Marx but it starts at least as early as Ibn Khaldun if not as early as ancient Rome in texts pertaining to the economics of latifundia. Paul Cockshott makes the latter claim if I'm not mistaken, though I forget where. How the World Works maybe.

I am against removing the Marxian economics portal link, but adding an economics portal link sounds like a good idea. Perhaps that and improving the lead is enough.

It might also be useful to separate more clearly pre-Marxian value theories which do not feature the "socially necessary" correction, and also those that do not clarify that only human labour creates value. For example Smith believes (incorrectly) that the work performed by beasts of burden also adds value to a commodity.

Finally an important point regarding your quote: Marx makes a distinction between value and wealth. They are not the same. Human labour is special, and Marx returns to this fact over and over. As a materialist, Marx of course does not ascribe supernatural abilities to humans. KetchupSalt (talk) 19:58, 9 October 2023 (UTC)

@KetchupSalt: A quick clarification: the quote is not mine. I took it directly from the article, here. ProofCreature (talk) 21:45, 9 October 2023 (UTC)

I somehow read it as trying to say value and wealth being the same. The wording in the article could be improved I think. Wealth and exchange value are also distinct, and one should not equate value and exchange value. KetchupSalt (talk) 20:41, 12 October 2023 (UTC)