What if a lot of labor went into a thing, and this thing is a real peice of crap that nobody wants to buy? What is it's value then, according to the labor theory of value?
most socialist lectures I've heard are just like this; translations of capitalist thought into pessimistic, whiny socialist buzzwords. the video does not explain how these "problems" would be solved, which would in fact consist of a totalitarian state regulating the payment to it's workers, and selling the commodity itself to (ironically) capitalist countries.
"the video does not explain how these "problems" would be solved"... because it's not a video about these solutions. So instead of foisting a simplistic strawman political position onto me (one that doesn't represent me at all) maybe you should deal with content of the video rather than some sort of fictional ideological opponent.
I'm just saying there is literally no point in making a video like this unless you look at it 360°. you are explaining the capitalist agenda, I get it. capitalists do things of questionable morality and this is a well-known fact, not an alterior motive. most people would much rather be "exploited" then die of hunger.
the question then is whether it is possible to have a society in which exploitation or starvation are not the only choices. But before we can answer that question we first need to now what is wrong with this society. I don't think the left fully understands this. That is the point of my videos.
Why don't you start by applying the theory to something closer to home?
How would you say this theory applies to personal relationships? Is it fair to say that men, driven by biological imperatives, seek to have sex, and that women exploit their biological shortcomings in order to extract value from them?
I mean, sure, one woman might not own your sex life. But collectively, unless you are homosexual, their class can make any demand, and compel you to obey or be lonely. Right?
You can't apply economic theories to sexual relationships because, obviously, they aren't economic. Unless you are buying and selling sex there is no economic value being transferred in interpersonal relationships. Sexuality is not a means of producing a commodity thus men and women are not members of classes based on their ownership of their own sexual bodies.
So, what exactly are you saying? That the unease of loneliness and the unease of starvation are categorically different? That the interdependence of men for the alleviation of the one is virtuous and just, while the other is the height of injustice?
I would invite you to consider a broader framework of analysis for human action - that of praxeology, wherein man is a thinking, acting being, seeking to apply his limited resources towards the alleviation of the unease of biological existence.
I'm saying that we know something is an economic phenomenon, that it involves value, when it involves the exchange of commodities for money prices. Romantic relationships do not manifest themselves in commodity prices. They are not economic phenomenon.
That is a false definition of economics. A more accurate definition would be "the study of human action". The field should concern itself with analyzing and predicting the actions of human beings, in regard to the employment of scarce means towards definite, chosen ends, as they are - and not with comparisons against some otherworldly, Hegelian construct. But I digress.
As for the actual theory you're putting forth: I take it that you propose that all goods have some intrinsic value, that exists completely independently of human value judgements, in much the same way as they might have mass or a colour - as per the Classical model - and that this objective, intrinsic value is specifically commensurate with the amount of labour that has been put into rendering it into a usable state. Is that correct?
That would be projecting economic categories into non-economics phenomenon- the worst sort of crass teleology. Obviously any human action which achieves a desire is not economic. You can tell because it doesn't take commodity form or have a market price.
Is labor the sole determinant of value? I think the answer is no - since the item must have 'use value' (as demonstrated by the pointless work examples). It can't only be labor that imputes value. but isn't this kind of ad hoc? How is use value determined? does it not simply reduce to subjective value?
When we say something has use-value this means that society has devoted so much of social labor time to the production of this use-value. It is this apportioning of labor time which is essential for understanding the existence of exchange value. Labor-less use-values like air and sunlight don't have exchange value. To obtain the objects of our desires we must devote labor time. This is the starting point for economic analysis. Desire itself only decides how much labor to devote to what tasks.
So exchange value is solely determined by use value which is solely determined by social labor time? Is this the correct? But social labor time must include more than just pure labor it must be labor on the 'right things' so-to speak, and isn't the choosing of the 'right things' necessarily prior to the labor? That is, there must be an initial value to direct the social labor to the correct ends and means?
Let's say a football takes an hour to make. Regardless of whether society demands 10 or 100 footballs it still takes an hour and still has the same price. Demand is only able to apportion labor because there is correlation between labor and price. If there wasn't there would be no way of coordinating the division of labor. In this way exchange value is ultimately determined by labor.
But how does this apportioning happen? If demand rises prices temporarily rise above values which signals more labor to move into that sphere of production. The opposite happens when demand falls. This creates the illusion that demand is "creating" value. But this is merely the mechanism by which labor is apportioned. Value is always pulling market prices back towards labor value.
Hmm, ok... Say you are living up in the Yukon Territories. You live in a small cabin of your own making. It takes 3 weeks labor to sow and reap vegetables for the winter months. However, since you are alone you decide it might also be agreeable to have a little music in the evenings, so you decide to build a fiddle. This takes 5 months. Now there is more labor in the fiddle, but obviously the food is more valuable as it literally sustain your life. How is this handled by the labor theory?
Neither has exchange value in this example because neither product is produced for exchange. They are produced for direct consumption. It is the exchange of labor in the market which creates value. Value is a historic phenomenon arising in a time where the predominant economic activity is production for exchange.
But if you were to exchange with someone - say, living similarly in a nearby cabin - wouldn't the exchange value of your vegetables and violin depend upon - not how much labor you put into them but rather upon the context of the other traders situation. If he was short on food you might get more for the vegetables, if he had food but was quite bored, you might receive more for the violin... Either way your labor is in the past and remains unchanged.
This is why value as regulator of production doesn't work with random acts of exchange. Exchange must be regular, it must be the mechanism by which the social labor process is coordinated- then we get value. If you made violins every day and you had to sell them to make a living and you were competing against other violin makers then you would be very aware that your labor time, represented by these violins, was worth so much in relation to other commodities and other labors.
Hm.. kind of getting a feel for it... It seems labor is definitely a part of the value.. but.. I'm envisioning scenario's where the things people want rapidly change and things that were once valuable become irrelevant. Shouldn't they still be valuable since they are the embodiment of labor. And mustn't there always be a valuer who could change his mind, turning your labor to dust - even whole industries to dust? And there would protest saying 'but we labored'... but to no avail...
Maybe try to think of it as a value theory of labor: that in a market society labor takes the form of exchange value- of prices on commodities- and that these prices are what are used to indirectly apportion social labor between tasks. Of course, people are always laboring in ways that come up short- their labor is not able to be turned into exchange value. This forces them to change their labor. This is what it means to say that value coordinates labor time.
Hm... but is abstracting away the indispensable use value and scarcity excessive simplification? It seems that taking labor as the sole determinant of exchange value is analogous to taking width as the essential attribute for determining the volume of a cube... like trying to describe a three dimensional world from one dimension. I know that marginalism is seen as inadequate, but I have to be wary of explanations that attempt too much (like religion, for an example).
It's not about ignoring scarcity or use-value, its about recognizing how they fit into exchange. Scarcity does effect prices as do changes in demand. But this fluctuation of supply and demand has the effect of reapportioning investment. Thus, over time, value is asserted as the guiding aspect beneath prices. Prices are a form of appearance of value. Saying that use-value creates value is to attribute power to use-value that it can't have.
here in Europe there is a VAT (Value added tax), if I understand it right it is paid on any product that has added value, but it's the end consumer that pays it. Most end consumers are the same people that create these products, so is that not the same as being ripped off twice? One pays VAT on added value that he himself created.
"It becomes plain that it is not the exchange of commodities which regulates the magnitude of their value; but, on the contrary, it is the magnitude of their value which controls their exchange proportions."
So then, one could say, "it becomes plain that it's not the degree of labor which regulates the magnitude of value; but, on the contrary, it's the magnitude of value which controls the level of labor a worker wishes to employ."
You're going to have to explain that. Money prices determine profit, which, in turn, leads to market entry. The entrepreneurs who enter a profitable market demand labor, and those who wish to acquire wages will work.
A given amount of labor is required to produce a quantity of demanded goods. Price is the mechanism which apportions this labor. Demand signals the apportioning of labor though prices. If this was not the case there would be no way of apportioning labor. To claim there is no relation between price and labor is to say that fluctuations in price have no effect on production or that changes in productivity have no effect on price- that is, to deny the obvious.
Well, a given amount of labor, along with capital and land, is required for the production process. The goods are being produced because they're demanded; the causal relationship runs in the other direction. You're begging the question, not answering it. One must explain how this happens, or, in other words, solve the transformation problem. Furthermore, it doesn't explain why the demand for labor may increase when prices fall (which is quite typical).
Perhaps you have a mistaken preconception about this causal direction. The LTV doesn't claim that demand doesn't send signals about apportioning labor. It says that these signals that apportion labor are prices- that prices measure the apportioning of social labor between different productive activities, and that labor time is the basic thing that is being measured by price. The transformation problem you refer to is a different theoretical problem. It has nothing to do with this.
You're saying that "labor time is the basic thing that is being measured by price," but not explaining how or why (this is the transformation problem). Neoclassical's, like Marshal, believed that input prices affect, in fact determine, long-term prices of goods and services. This seems to be what you're saying, but you're ignoring other inputs, and simply placing the emphasis on labor, for whatever reason.
All inputs are labor inputs: either current labor or past labor embodied in commodities. (The one possible exception would be land, but the value of land does not grow from the soil, but from the productive relations it is enmeshed in.)
You don't know what the "transformation problem" is. You aren't even close. Watch my video on it.
"Labor time is the basic thing that is being measured by price."
I ask you to explain why and how this is so.
"The transformation problem is the problem of finding a general rule to transform the value of commodities (based on labour) into the prices seen in the market place." -Wikepedia.
How am I "not even close?"
Furthermore, how do you explain the phenomena of an increasing demand for labor, and a rise in real wages, when the general price level is declining (1880-1896 in the U.S)?
I've already explained how price measures labor time.
You should watch my vid on the transformation problem. The context of the problem involves the relation of value to price but the problem itself is more specific. It involves a supposed mathematical contradiction when input and output prices are held simultaneous in conditions of simple reproduction when distributing surplus value to reach an average rate of profit.
Rising demand for labor & rising productivity happen when capital expands.
Another problem with the LTV is that it simply doesn't (can't) explain real world phenomena. It doesn't tell me why a bottle of Budweiser at my local grocery store costs so much less than that very same Budweiser in a NYC club.
Okay, but you said that "the value of land does not grow from the soil, but from the productive relations it is enmeshed in" (be more abstract please). If that's the case, then why is the rent (per square unit x) so much higher for a NYC club, then, say, a steel mill in Pittsburgh (which has a lot more labor, and produces a lot more commodities)?
I can't summarize Marx's theory of Rent in a youtube comment box. Here are 2 basic points:
1. Value does not grow from the soil. Value which comes from land is an appropriation of value from producers. Rent on a factory appropriates some of the profit produced by that factory. Same for housing.
2. Land is not a reproducible commodity therefore it doesn't have value as the result of labor. Instead it takes monopoly rents. Yet investments in land involve labor and these add to the value of land.
By the way, the Austrians know that prices (the exchange of goods and services for money) are not a measure of value. Value is not measured, it's only graded. Prices are merely a reference point for individual action.
Workers are paid a wage in exchange for their labor, generally long before the product of their labor sells on the market and generally regardless of whether or not the product of their labor sells on the market.
If not for wages, how would workers subsist until such time as the product of their labor could be sold? The fact that the entrepeneur advances the worker the discounted present value of their labor is the reason the worker does not receive the full future value of his labor.
Yawn. Time-preference theory. hum. Subjective theory of value. yawn. Have you read any critiques of this theory or are you another boring Austrian parrot?
1. Since the marked is generaly stabil, that is, goods dont userly lose value. How can one then say that they get paid regardless of wether the products of their labor sells. ?
2. the entrepeneur advances the workers profit.. yes.. however why is it that that the value is allways greater for the entrepeneur, as is seen by the relative few rich workers. Obviosly there is a discreprency between the two, inspite of their common interest, and relative importence.
2. the worker doesn't get a profit. The worker gets the wage. the Capitalist gets the profit. The worker creates both the value of the wage and profit.
1. are you asking why workers get paid even if their product doesn't sell? B/c that is how markets work- we don't realize the value of labor until it is compared with the products of other labor in the market. This is why value is a social phenomenon. Hence: "socially necessary labor time".
The worker gets a wage because he doesn't have command of the other factors of production, so he can't claim the full value of production. He's using someone else's tools, working in someone else's office or factory, etc. At most, he's entitled to the future marginal product of his labor... after said product is sold on the market. But then, it might not sell. However, if he accepts a wage, he is guaranteed an income based on labor hours worked.
Entrepeneurs are innovators in technology and organization. Being involved in the production process puts those workers with the right disposition in the right place at the right time to acquire the right kind of tacit knowledge to enable them to direct the means of production better than those who have never participated in the line of production in which they have gained their expertise.
Am I mistaken, or is "socially necessary labor time" determined only after you actually take the product to market?
Is there any way, other than the cumulative subjective valuations of countless market participants, to arrive at an approximation of "socially necessary labor time?"
If not, then "socially necessary labor time" is hopelessly subjective rather than objective and intrinsic.
Yes. SNLT expresses the social nature of labor in a market- that value expresses relations between different parts of a social labor process, a process coordinated indirectly through markets. But it would be a mistake to confuse the subjective experiences of isolated consumers interacting w/ physical commodities with the social expression of labor in markets. The subjective consumer only exists within the structure of production for exchange. It's this structure which creates the form of value.
Numbers are abstract ideas, and ideas are a social phenomenon, but I don't need to ask a million other people what 2+2 equals to discover the answer.
I think the "social nature of value" in this context is immaterial, and I'm not sure why any argument that employs this premise isn't a nonsequitor.
Value is something people do. Its not an intrinsic quality residing in objects. SNLT can't be determined without referring to the market because value is subjective.
Marx does not argue that value resides in objects. Do you understand why markets are an essential part of the LTV? Do you understand the role in which subjective decisions about which commodities to purchase fits into the larger framework of the LTV? I'm asking b/c I can't tell from your past comments if you actually understand the theory or not.
Well, I guess you just understand Marx better than everyone else, including Schumpeter, who wrote that Marx was "under the same delusion as Aristotle, viz, that value, though a factor in the determination of relative prices, is yet different from, and exists independently of, relative prices or exchange relations. The proposition that the value of a commodity is the amount of labour embodied in it can hardly mean anything else."
When marx talks about value being "embodied in commodities" he is not, as you say, talking about intrinsic qualities, but of a social relation expressed thru commodities. Value does not exist independently of exchange. The fluctuations of relative prices are the mechanism by which value is established.
There is much misunderstanding of the LTV in the neoclassical academy. Merely quoting some elses's misreading of Marx does not make your misreading true.
If you're going to evade questions by posing rhetorical questions in response (as you did in our first exchange,) then you can't expect to be taken seriously when you complain that your former interlocutor didn't attempt to answer accusations and insults disguised as questions.
I take Schumpeter as more of an authority on this matter than you. Asserting that his take on the matter is wrong doesn't make it so. LTV is an intrinsic theory of value.
I was perfectly serious. Do you understand the role that consumer choice plays in the LTV? Do you understand why Marx saw markets as essential to the LTV? I would like you to be able to explain the theory which you are critiquing prior to that critique.
Re: Schumpeter I'd can list plenty of writers who can testify to the fact that Marx saw value as a social relation and not an intrinsic quality of objects: Marx, Rubin, Mandel, Harvey, Hilferding, Dobbs, Kliman, etc. All considered authorities.
"The value of commodities is the very opposite of the coarse materiality of their substance, not an atom of matter enters into its composition....it follows as a matter of course, that value can only manifest itself in the social relation of commodity to commodity. In fact we started from exchange value, or the exchange relation of commodities, in order to get at the value that lies hidden behind it."
"... If, however, we bear in mind that the value of commodities has a purely social reality, and that THEY ACQUIRE THIS REALITY ONLY IN SO FAR AS THEY ARE EXPRESSIONS OR EMBODIMENTS OF ONE IDENTICAL SOCIAL SUBSTANCE, VIZ. HUMAN LABOR, it follows as a matter of course..."
Pile on as much marxoid metajargon as you wish, but that's a pretty plain admission of the intrinsic nature of LTV.
"A use value, or useful article, therefore has value only because human labor in the abstract has been embodied or materialized in it. HOW, THEN, IS THE MAGNITUDE OF THIS VALUE TO BE MEASURED? PLAINLY, BY THE QUANTITY OF THE VALUE-CREATING SUBSTANCE, THE LABOR, CONTAINED IN THE ARTICLE. The quantity of labor, however, is measured by its duration, and labor time in its turn finds its standard in weeks, days, and hours."
In all of these quotes it is clear that value is a property of the social relation between producers as they exchange the products of their labor and not some eternal property belonging "intrinsically" to the commodity itself. Marx did not hold that any product of labor at any point in history had value. He saw that value was specific to commodity exchange and capitalism- a period in which social labor was coordinated thru indirect market exchange.
Technically, Marx said that socially necessary labour time determines the magnitude of value in a commodity. Not that it is identical, or that value is transhistorical. "As values, commodities are social magnitudes, that is to say, something absolutely different from their properties as things. As values, they constitute only relations of men in their productive activity."
One of the reasons you see relatively few rich workers is that relatively few workers assume risk along with their employers.
Think about it: how often do you hear organized labor demanding profit sharing? Are the also willing to share losses? Would that be fair, to expect the worker, who just produces what the entrepeneur tells him to produce, to share in the negative consequences of the entrepeneur's decision making? Why then, should he share in the profit?
True workers dont take the same risk as the entrepeneur, the entrepeneur take the risk for them, as you can see by the growing unimploiment lines. And I would maintain that it is a fallacy to maintain that there is a difference between interest and profit, both parties make their living from the surplus created by the selling of the product.
2, Also as can be seen from eksperiments with other organisational strucktures, there is no economic law that says that workers cannot parttake in the responsability of leading a cooporation, im thinking of syncalist orginisatons, and the like. As it is, there is a need for consentrating profits in the hands of those who makes the desicions, I agree with that, but saying that they take bigger chanses then workers, is in the practical world, not quite true, it sertenly is in regard to small
Its an unworkable kind of "worker's capitalism" in that it doesn't centralized ownership of the means of production in the hands of the state but instead distributes "shares" for each industry in the hands of the workers.
Does this eliminate, or even promote, inequality? No.
Does it provide for free entry into any field of labor? No.
Does it protect the consumer? No (the means of production are inalienable under syndicalism, right?)
Syndicalism is not just one thing, I suppose it could be called incoherent and a mess,, However like most other systems it works just fine when laws makes them possible. It is a system with 2 basic ways of making desicions.
1. all desicions must be in consensus (resulting in slow desicions) or
2. desicions made by representatives(basicaly like representative democracy, same as shareholders)
The only thing they have in common is that all that work for the company, owns the company.
3, entrepeneurs, who does not have the resourses to soak up economic fluctuations. But this does only rarely affect big estaplised entrepeneurs. The situation in the US with big companies going bust is an unuseral accuranse, and most of these companys are suffering not because of the present economic crisesl, but because of irresponsable dispositions. Companies with more conservative strategies, generaly dont have any big problems.
I see no difference in workers and entrepeneur interests
Excellent, I found your video extremely enlightening and really helpful in synthesising some of the theories I've already delved into, by giving them a simplistic basis and using modern examples to get ideas across. Cheers.
The marginalist revolution put the LTV back in the shelves way long ago. Only marxist theorists stick to it because is the only way to make some sense out of the explotation argument. Still, marxism can't handle science even if they keep on calling themselves "scientific socialists" (Engels). Menger and Bohm Bawerk already disentangle the fallacies embedded into this argument in the late XIX century. Later on, von Mises and Hayek showed how socialism could not cope with economic calculation.
Thanks for the stunning history of the LTV. While we are referring people to these debates perhaps I'll mention all of the rejoinders to these arguments you mention. I suggest Hilfdering's reply to Bohm-Bawerk. I suggest I.I. Rubin for a defense of Marx's method. For a critique of marginalism: Maurice Dobbs. For a general history of replies to the Austrian critique: Kevin Carson. For the calculation debate: Oscar Lange. Of course my videos aren't about socialism... neither is the LTV.
I'm unfamiliar with all the references you provided here. Thank you for the info though, and rest assured that I'm gonna spend some time on it. As for the calculation debate, neither Oskar Lange nor Fred Taylor nor Abba Lerner managed to come up with something as reasonable as to really counter Mises and Hayek's arguments.
These products are not produced by labor alone. It takes planning, investing, managing, and many other roles to efficiently produce products and services.
Workers are compelled by necessity, but not by any human being. Therefore there is no exploitation by capitalists unless they use government to initiate force against innocent people.
Labor that goes into a product does not determine its value. That theory fails to see the subjective determinants of value. personal wants, desires, needs etc.
Not all labor produces value. Not all material factors of production produce value.
I do not understand the logical correlation you make between state coercion and exploitation. Exploitation results from a difference between the wage and the value created by labor. It doesn't matter who or what compels the worker to work.
Your vague assertion of subjective factors does not consider how these subjective factors work in the context of a market which coordinates social labor.
Exploit - to make use of selfishly or unethically. To employ to the greatest possible advantage. We provide labor for which we receive compensation. Government steals a percentage of that compensation. In essence we are forced to work for government. In return government provides us with bad "services." Bad because they are a government monopoly with no competitive incentive to provide high quality at a low price. The value of our taxes is greater than the crap we receive in return.
Well I am talking about a different definition of exploitation. My definition of economic exploitation: to profit from someone else's labor; to appropriate the surplus of another. In capitalism a unique form of exploitation arises in production.
The state does appropriate surplus labor through taxes. It appropriates value from wage laborers and profit from capitalists. This value and profit has already been created in production.
Who do you classify as labor? What do you use to divide who is labor and who is a capitalist? I think all people involved are necessary for profit to be created. If labor didn't need capitalists to create a profit, wouldn't labor just form their own companies?
How do you define production. To me, production is just one of many steps in the creation of a product. (customer service, design, planning, management, distribution, marketing, etc.)
So you'd agree government exploits. or wouldn't you?
The government appropriates. This is different from exploitation because government appropriation does not happen in production. It happens outside of the labor-capital relation and outside of the market.
Labor is work. But not all labor creates value. Only labor which creates commodities creates value. There is a difference between being a factor of production and creating value.
Subjective factors work in the context of a market which coordinates social labor in a natural way. You've heard this argument before I'm sure. Value is subjective. Roy determines value based on Roy's desire and need for the object. Roy exchanges one thing he desires less (a lower value) for another thing he desires more (a higher value). All voluntary exchanges occur only if all participating parties view what they're receiving as having a higher value as what they are giving. Same with wages.
The argument that price is solely the result of subjective desires relies on a radical skepticism of cost-price. Do you think that the cost of production doesn't condition price at all? Do you think that income doesn't condition one's spending? If not then we need a theory of income distribution and of production cost. That is what it means to say that the LTV explains the conditions behind supply and demand.
There is basically one subjective factor in a market: to maximize one's advantage and minimize one's labor. This why we can have a socially necessary labor time. If this subjective valuation has the same tendencies for all f us then how subjective is it really?
The same theory I described applies to income distribution. People with common skills are willing to work for less. Some skills & experience are more difficult to find & thus more highly desired by employers. I don't see why this requires LTV.
An item's cost may be more than it's value according to consumers, in which case you should not create it.
Income does have an effect on one's spending. If they have a larger supply of money, they desire each dollar less. Still no need for LTV.
So the amount of money we have to spend relies on either the amount of labor we have performed (and multiples of this for skilled labor) or the amount of surplus we have exploited from someone else. Again, labor is the creator of this substance of value.
you are right that if a capitalist can't realize the cost of making a commodity then that commodity can't be reproduced. Therefore, since competition forces price down, cost of production is the ultimate regulator of price.
"cost of production is the ultimate regulator of price." No it's not. A product can be made and sold for a price below it's cost, when the demand is over-estimated. When this occurs the market immediately corrects itself, a nice quality of the free market.
I'm curious, I believe you said you were not a Stalinist. I greatly respect that. What kind of government do you support? Who runs it? How will they be chosen? Or will this be a free society without a coercive government?
When you say that the market corrects itself this is exactly what I am talking about! At least we agree on something. That is what value is- a regulator of the intrinsic value of commodities. Prices fluctuate around values all the time, but values always pull these prices back toward their "natural" or "equilibrium" price. This equilibrium price must have a relation to labor time if there is to be any allocation of the labor between sectors.
A person's value manifests in action. If action is coerced, which includes prohibition of wage labor, then values are not manifest and they are uknown forever. Any criticism of labor is a criticism of people's values.
The CORRELATION between labor and value just means that a lot of people work towards supplying others with things that they subjectively value. It is simple to SEE that this is only a correlation. Unvalued goods seize to exist therefore very little labor is used to produce the
Great video. Like most other people, I'd dismissed LTV due to misunderstanding it. I didn't understand that it was intended as an EXTENSION OF classical economics rather than a replacement.
Even so, it seems problematic in terms of measurement. I'm just not sure how easy it is to quantify a worker's experience, skills, drives, abilities when applied to various tasks. This becomes even more complicated in non-standard jobs. I mean, maybe some CEOs really are worth their salary due to skills
Sorry, but you guys are confused. Individualistico is completely correct.
The "computer example" was in error. Prices go down due to efficiency in production, resulting in surplus, not a lack of labor.
There's probably more labor in the computer industry than ever, due to increases in supply chain complexities.
The points Individualistico made hold. His basic argument is that pushing a rock across a room takes work, but no one is going to pay for it because no one cares.
The amount of labor put into a product is irrelevant as to how much of something it can purchase. No matter how much labor you put into producing something that no one finds of use, no one will pay you for it.
It is true that a commodity must have a use value and an exchange value to be a commodity. How does this mean that the labor process has no bearing on the value of a commodity?
Because no one cares how much labor you put into producing something when they decide how much to pay you for it. All they care about is that what you're offering for sale is useful to them. The quantity of labor exerted is completely irrelevant, and there's no rational reason I can see why it should be relevant.
b/c 1. demand depends on the amount of income consumers have and how much they are willing to part with it relative to how hard it is to get more income. This income is payment for their labor.
2. Supply is created by labor. It requires wages to be paid. People who hire laborers must decide how to best use that labor so that it is most efficient. They are very careful to measure the efficiency of labor productivity relative to the cost of labor.
People who purchase labor don't care how much labor is performed when they decide how much to pay labor. They pay based on how useful the given quantity of labor is. It doesn't matter how hard someone is working for an employer, if his labor is not useful then he's not going to paid anything at all. Behind supply and demand is usefulness & scarcity, not quantities of labor.
Imagine two people working on an assembly line, with different metabolisms. One exerts more energy to do the same job than the other person. For the employer, this is irrelevant in deciding how much he's willing to pay him. Both workers' labors have the same exchange value even tho one is working harder than the other.
So income has nothing to do with how much work anyone performs. It has to do with how useful that work is to other people, in conjunction with scarcity of the supply of that kind of work.
And again, I don't see any rational reason why how much work people perform should be taken into account in regarding how much they should be paid.
Not if you change the type of labor you're doing in that extra hour. If it's a type of labor that the employer does not value, then he won't pay you for it. It's not the fact that you work that you get paid, but the fact that the kind of work you are doing is valued by someone else.
That's absurd. Ask any employer what happens when one worker can't keep up with the average intensity of work. They get fired. There is an entire field of theory- management theory/industrial psychology- devoted to the problem of increasing the productivity of workers relative to their wages,
No, the employer doesn't care about the "intensity of work." If you exert more energy than another employee but you produce the same amount of widgets, you're not going to be paid any more than the other employee.
Let's say you're breaking rocks. If you've found a way to hit rocks just right so they break into pieces by hitting them lightly, you're still going to be paid as much as the guy exerting more energy who has to hit the rock twice. The employer doesn't care how much energy you use.
That's not true. I'll willing to pay you more than the next guy to work if you perform the same amount of work as the next guy but if it's of a nature that I find more useful. Let's say you're a ditch digger. If I don't find your service useful, I won't pay you anything. I'm looking for a piano tuner. There's MUCH less labor involved in it, but I'm going to pay you more for it - because that's of more use to me.
You really need to move on past the 19th century in economics.
Here you confuse the use value of commodities with the use value of labor to an employer. You all conflate an individual's subjective valuation of commodities with the social determination of value. Do you understand the differences between these? Perhaps you shouldn't dismiss theories you don't understand.
I'm doing no such thing. I'm showing you that people don't pay each other for labor or goods based on how much energy they exert. You might wish that they would, but they don't. Quantity of labor exerted is completely irrelevant as regards to differences among people in income. What determines the prices of goods and labor in a market economy is the combination of usefulness to those bidding on these things and scarcity.
Yes a commodity must have a social use value if it is to become a commodity. I agree w/ you on this point and so would have the classical economists. Your repetition of this is not a criticism of the LTV.
Demand for commodities triggers a change in supply. Once demand and supply are in balance we have equilibrium prices. But what determines the differences between prices of commodities? This was the question which led classical economy to examine the role of labor in regulating supply and demand
What determines the differences between prices of commodities is their utility combined with their scarcity. If something is in unlimited supply, it's going to be free. If something has no use whatsoever to anyone - that is, no one wants it - it's going to be free. If usefulness increases and supply stays the same, price goes up. If usefulness stays the same and supply goes up, price goes down.
If something takes no labor to make it will be free. If something is extremely labor intensive it will be more expensive. This is empirically observable.
Yes I am quite familiar with marginal utility. I find it woefully inadequate on many levels.
If something takes no labor to make it does not mean it will be free. If something took no labor to make, it would not be free if it was in limited supply and people found it useful. The fact that it was in limited supply requires that people bid against each to obtain it, and the fact that it was useful is why they would bid on it.
And if something is extremely labor intensive it doesn't mean it will be more expensive. I can work all year inventing something, but if when I'm done people find it of little or no use, they won't be willing to pay a lot of money for it.
What makes things expensive is that they're highly useful to other people and they're in limited supply.
There is no such thing as a thing that has exchange value but does not require labor to obtain. But if such a hypothetical thing did exist, the reason it would not have exchange value is not because it required no labor to obtain, but because it was not useful to anyone or it was in unlimited supply.
There is actually no such thing, period, as a thing that requires no labor to obtain. Even the air we breathe requires the labor of inhaling. So the fact that there is no such thing that has exchange value but does not require labor to obtain is not proof that price is proportional labor exerted. It's just that there is no such thing at all that requires no labor to obtain.
Antiques gaining in value with age? Wine gaining in exchange value when all that has to be done is for the wine to be purchased and locked up in a store room?
If that were true, then the employer would hire ANYBODY. But no, he hires someone that's capable of a particular kind of work. He's not just looking for someone that exerts a lot of energy.
You think you're looking behind supply and demand, but you're not looking far enough behind it. What determines the price of labor is the subjective usefulness of it in combination with the supply available of it.
I'm going to make a video explaining why things have different prices.
No. Obviously the employer hires employees who can provide specific types of labor. Once employed the employer then must figure out how to get the most efficient use of this wage bill. The more workers he buys and the longer they work the more supply there is. The more wages workers earn the more demand there is for commodities.
There is no reason I can see to conclude that the more wages workers earn the more demand there is for commodities. Money just changes hands. There's not more money in the world just because someone starts getting paid more.
No, not the more work done the more value in the economy. This is where your error is. It's not mere energy expended that creates value. One person can create more value with less energy expended that another person. Working smart is what creates value, not just sheer work. A person can toil all day and produce nothing of value. Value created cannot be determined by the amount of energy expended.
I understand that, but it does hold that exchange value is proportional to labor exerted. It's fallacious. It two things have use value but one has a higher market price than the other, it's not that one took more labor to produce than the other that makes it more expensive, but that one has more use value than other and/or it's more scarce than the other. How much labor was behind its production is not relevant to its market price.
And these "things" include labor itself. Two hours of equal exertion have different prices because the use value and scarcity of these types of exertion are different. They're different kinds of labor even though they're the same quantity of labor or exertion. The quantity of labor is not relevant to the market price of anything.
Are you familiar with Marx's distinction between intensity of labor, extensity of labor and productivity of labor? Or of the idea of simple labor or multiples of simple labor?
What about in the long run, after supply has adjusted to meet demand? What determines the relative prices between commodities?
Secondly, are you familiar with the various levels of abstraction marx works with when discussing the relation of socially necessary labor time to the exchange value of individual commodities, such as abstracting from short-run fluctuations in supply and demand, the idea of prices of production and/or that aggregate equality total price=total value?
One would think people would at least read the first section of the first chapter of 'Capital' (commodities have values and are use-values by definition, and he is talking about commodities). Apparently this is not that case.
The guy who made this video is a fucking idiot! He is a Marxist who HIMSELF is "bourgeois" - he is in the top 10-20% of wealthiest people in the world and this idiot is whining about the elite? What a fucking fool!
Hey brendanmcooney. Im watching your vids and I like them a lot. Very insightful. I am a Telecomunications Engineer ( I mention this only because I want you to know I have a proffesional formation and a very good formation on advanced mathematics that are very usseful on economics for the answer you are going to give me next) an Im starting to read about economics becuase i found it very interesting and neccesary. I want you to tell me wich books for starters, topics or webpages to read, thx
I highly recommend Ernest Mandel as an accessible introduction to economics. His book "marxist economic theory" is a great read. David Harvey is one of my favorite contemporary thinkers. He has a great website: davidharvey. org. If one has the patience, Marx's Das Kapital is a great read.
I remember someone telling me at university that the Labor Theory of Value hyas been discredited. His point was that computers for example, are made largely by machines in an automated manner unlike pens which require more labour. His proposal sounds stupid to me, but he kept saying the same thing? Does he have a point? I replied by saying that machines are created by human labour etc.
That's funny. i usually use computers as an example of the LTV: 1. as the manufacturing of computers becomes more efficient (as less work goes into making them) the price falls. 2. Computers have replaced much work that used to be labor: duplicating, calculating, etc. These tasks no longer have economic value. ie: You wouldn't pay me to copy out a book by hand (people used to do that in the 1800s) b/c a computer could do it for free. Once labor is eliminated from a task the task looses value.
Hi. How do you use labor theory of value to explain housing prices or stock prices? It seem to me there are limitations on applicability on when you could use this theory.
Stocks have to do with something marx called "fictitious capital"- a result of credit monies, something I discuss in my "what is credit video".
I have yet to make a video regarding the theory of rent, but I'll say this re housing price: Housing prices represent a confluence of factors including the labor that goes into making a house and the way capital moves through property too coordinate the production of value on land. I know this sounds vague, but it's too big a topic to summarize here.
The marxist analysis of the recent implosion of housing prices is a great example of the way in which value theory in relation to land is really important to an understanding of the current crisis. There is a good lecture on David Harvey's website called "a Financial Katrina" that discusses some of this theory.
If labor is the source of all value, why should landowners or capitalists get anything? In the neoclassical story, "contribution = marginal product". But the "contribution" of landlords and capitalists is passive and absent from the production process. Merely granting permission for land and capital to be used in exchange for a percentage of proceeds is not a productive activity. To produce material goods, we need human labor nonhuman raw materials. But why do we need landlords or capitalists?
I think that marginal utility leaves out the most essential questions of economic analysis. It narrows the focus of economics on the immediate determination of price without asking about the wider social structures that create price. In contrast the LTV explains the apportioning of human labor via echange and prices in a way that reproduces the class structures of society, thus allowing for a more robust understanding of economic, political and social life.
Thanks for your repl(ies). These reflect my initial impression, it just seems as if Marxist rebuttal of marginal utility is thin on the ground and until I understand marginalism properly I won't be quick to merely dismiss it. Opponents of LTV (including some reformists) always cite it, so I'm often at a loss to explain why they shouldn't accept this facet of bourgeois ideology.
While individual concrete labor creates the value of a particular commodity, this value only makes sense in relation to the value of other commodities. Thus value is also a social creation. The value of a particular commodity is equal to the "socially necessary labor time" it takes to make it. If you make something above the socially necessary time you still have to sell it at the socially necessary labor time. If you can make it for less, you can sell it for less and thus undercut competition.
What if a lot of labor went into a thing, and this thing is a real peice of crap that nobody wants to buy? What is it's value then, according to the labor theory of value?
10kensea79 1 year ago
@10kensea79
Stay tuned for my next video: "Das MudPie"
brendanmcooney 1 year ago
01:49 no way does he have a pipe.
cameundermayne 1 year ago
most socialist lectures I've heard are just like this; translations of capitalist thought into pessimistic, whiny socialist buzzwords. the video does not explain how these "problems" would be solved, which would in fact consist of a totalitarian state regulating the payment to it's workers, and selling the commodity itself to (ironically) capitalist countries.
andytheR 2 years ago
"the video does not explain how these "problems" would be solved"... because it's not a video about these solutions. So instead of foisting a simplistic strawman political position onto me (one that doesn't represent me at all) maybe you should deal with content of the video rather than some sort of fictional ideological opponent.
brendanmcooney 2 years ago
I'm just saying there is literally no point in making a video like this unless you look at it 360°. you are explaining the capitalist agenda, I get it. capitalists do things of questionable morality and this is a well-known fact, not an alterior motive. most people would much rather be "exploited" then die of hunger.
andytheR 2 years ago
the question then is whether it is possible to have a society in which exploitation or starvation are not the only choices. But before we can answer that question we first need to now what is wrong with this society. I don't think the left fully understands this. That is the point of my videos.
brendanmcooney 2 years ago
The one thing that is certainly not wrong with this society is market theory of value.
Choranzanus 1 year ago
thank you
cheeseit126 2 years ago
Nicely done
anotherzibber 2 years ago
Why don't you start by applying the theory to something closer to home?
How would you say this theory applies to personal relationships? Is it fair to say that men, driven by biological imperatives, seek to have sex, and that women exploit their biological shortcomings in order to extract value from them?
I mean, sure, one woman might not own your sex life. But collectively, unless you are homosexual, their class can make any demand, and compel you to obey or be lonely. Right?
PanzerDivisionBOM 2 years ago
You can't apply economic theories to sexual relationships because, obviously, they aren't economic. Unless you are buying and selling sex there is no economic value being transferred in interpersonal relationships. Sexuality is not a means of producing a commodity thus men and women are not members of classes based on their ownership of their own sexual bodies.
brendanmcooney 2 years ago
So, what exactly are you saying? That the unease of loneliness and the unease of starvation are categorically different? That the interdependence of men for the alleviation of the one is virtuous and just, while the other is the height of injustice?
I would invite you to consider a broader framework of analysis for human action - that of praxeology, wherein man is a thinking, acting being, seeking to apply his limited resources towards the alleviation of the unease of biological existence.
PanzerDivisionBOM 2 years ago
I'm saying that we know something is an economic phenomenon, that it involves value, when it involves the exchange of commodities for money prices. Romantic relationships do not manifest themselves in commodity prices. They are not economic phenomenon.
brendanmcooney 2 years ago
That is a false definition of economics. A more accurate definition would be "the study of human action". The field should concern itself with analyzing and predicting the actions of human beings, in regard to the employment of scarce means towards definite, chosen ends, as they are - and not with comparisons against some otherworldly, Hegelian construct. But I digress.
PanzerDivisionBOM 2 years ago
As for the actual theory you're putting forth: I take it that you propose that all goods have some intrinsic value, that exists completely independently of human value judgements, in much the same way as they might have mass or a colour - as per the Classical model - and that this objective, intrinsic value is specifically commensurate with the amount of labour that has been put into rendering it into a usable state. Is that correct?
PanzerDivisionBOM 2 years ago
No. I guess that shows how much you know about Marx's theory of value.
brendanmcooney 2 years ago
That would be projecting economic categories into non-economics phenomenon- the worst sort of crass teleology. Obviously any human action which achieves a desire is not economic. You can tell because it doesn't take commodity form or have a market price.
brendanmcooney 2 years ago
*Subscribed*
MrSalamander7 2 years ago
Hello brendanmcooney
I have to admit I am very impressed with the quality of your videos here on youtube.
They are certainly a pleasure to watch as I do enjoy them.
I am sure there is many others who also feel the same about your videos.
Mark McCulloch
MarkMillionaireGuru 2 years ago
Is labor the sole determinant of value? I think the answer is no - since the item must have 'use value' (as demonstrated by the pointless work examples). It can't only be labor that imputes value. but isn't this kind of ad hoc? How is use value determined? does it not simply reduce to subjective value?
laskji 2 years ago
When we say something has use-value this means that society has devoted so much of social labor time to the production of this use-value. It is this apportioning of labor time which is essential for understanding the existence of exchange value. Labor-less use-values like air and sunlight don't have exchange value. To obtain the objects of our desires we must devote labor time. This is the starting point for economic analysis. Desire itself only decides how much labor to devote to what tasks.
brendanmcooney 2 years ago
So exchange value is solely determined by use value which is solely determined by social labor time? Is this the correct? But social labor time must include more than just pure labor it must be labor on the 'right things' so-to speak, and isn't the choosing of the 'right things' necessarily prior to the labor? That is, there must be an initial value to direct the social labor to the correct ends and means?
laskji 2 years ago
Let's say a football takes an hour to make. Regardless of whether society demands 10 or 100 footballs it still takes an hour and still has the same price. Demand is only able to apportion labor because there is correlation between labor and price. If there wasn't there would be no way of coordinating the division of labor. In this way exchange value is ultimately determined by labor.
brendanmcooney 2 years ago
But how does this apportioning happen? If demand rises prices temporarily rise above values which signals more labor to move into that sphere of production. The opposite happens when demand falls. This creates the illusion that demand is "creating" value. But this is merely the mechanism by which labor is apportioned. Value is always pulling market prices back towards labor value.
brendanmcooney 2 years ago
Hmm, ok... Say you are living up in the Yukon Territories. You live in a small cabin of your own making. It takes 3 weeks labor to sow and reap vegetables for the winter months. However, since you are alone you decide it might also be agreeable to have a little music in the evenings, so you decide to build a fiddle. This takes 5 months. Now there is more labor in the fiddle, but obviously the food is more valuable as it literally sustain your life. How is this handled by the labor theory?
laskji 2 years ago
Neither has exchange value in this example because neither product is produced for exchange. They are produced for direct consumption. It is the exchange of labor in the market which creates value. Value is a historic phenomenon arising in a time where the predominant economic activity is production for exchange.
brendanmcooney 2 years ago
But if you were to exchange with someone - say, living similarly in a nearby cabin - wouldn't the exchange value of your vegetables and violin depend upon - not how much labor you put into them but rather upon the context of the other traders situation. If he was short on food you might get more for the vegetables, if he had food but was quite bored, you might receive more for the violin... Either way your labor is in the past and remains unchanged.
laskji 2 years ago
This is why value as regulator of production doesn't work with random acts of exchange. Exchange must be regular, it must be the mechanism by which the social labor process is coordinated- then we get value. If you made violins every day and you had to sell them to make a living and you were competing against other violin makers then you would be very aware that your labor time, represented by these violins, was worth so much in relation to other commodities and other labors.
brendanmcooney 2 years ago
Hm.. kind of getting a feel for it... It seems labor is definitely a part of the value.. but.. I'm envisioning scenario's where the things people want rapidly change and things that were once valuable become irrelevant. Shouldn't they still be valuable since they are the embodiment of labor. And mustn't there always be a valuer who could change his mind, turning your labor to dust - even whole industries to dust? And there would protest saying 'but we labored'... but to no avail...
laskji 2 years ago
Maybe try to think of it as a value theory of labor: that in a market society labor takes the form of exchange value- of prices on commodities- and that these prices are what are used to indirectly apportion social labor between tasks. Of course, people are always laboring in ways that come up short- their labor is not able to be turned into exchange value. This forces them to change their labor. This is what it means to say that value coordinates labor time.
brendanmcooney 2 years ago
Hm... but is abstracting away the indispensable use value and scarcity excessive simplification? It seems that taking labor as the sole determinant of exchange value is analogous to taking width as the essential attribute for determining the volume of a cube... like trying to describe a three dimensional world from one dimension. I know that marginalism is seen as inadequate, but I have to be wary of explanations that attempt too much (like religion, for an example).
laskji 2 years ago
It's not about ignoring scarcity or use-value, its about recognizing how they fit into exchange. Scarcity does effect prices as do changes in demand. But this fluctuation of supply and demand has the effect of reapportioning investment. Thus, over time, value is asserted as the guiding aspect beneath prices. Prices are a form of appearance of value. Saying that use-value creates value is to attribute power to use-value that it can't have.
brendanmcooney 2 years ago
here in Europe there is a VAT (Value added tax), if I understand it right it is paid on any product that has added value, but it's the end consumer that pays it. Most end consumers are the same people that create these products, so is that not the same as being ripped off twice? One pays VAT on added value that he himself created.
bergweg 2 years ago
Finally, from the master's own pen:
"It becomes plain that it is not the exchange of commodities which regulates the magnitude of their value; but, on the contrary, it is the magnitude of their value which controls their exchange proportions."
PrimeDirector 2 years ago
Exactly.
brendanmcooney 2 years ago
So then, one could say, "it becomes plain that it's not the degree of labor which regulates the magnitude of value; but, on the contrary, it's the magnitude of value which controls the level of labor a worker wishes to employ."
Questfortruth86 2 years ago
Without a correlation between labor and value money prices couldn't coordinate the apportioning of social labor.
brendanmcooney 2 years ago
You're going to have to explain that. Money prices determine profit, which, in turn, leads to market entry. The entrepreneurs who enter a profitable market demand labor, and those who wish to acquire wages will work.
Questfortruth86 2 years ago
A given amount of labor is required to produce a quantity of demanded goods. Price is the mechanism which apportions this labor. Demand signals the apportioning of labor though prices. If this was not the case there would be no way of apportioning labor. To claim there is no relation between price and labor is to say that fluctuations in price have no effect on production or that changes in productivity have no effect on price- that is, to deny the obvious.
brendanmcooney 2 years ago
Well, a given amount of labor, along with capital and land, is required for the production process. The goods are being produced because they're demanded; the causal relationship runs in the other direction. You're begging the question, not answering it. One must explain how this happens, or, in other words, solve the transformation problem. Furthermore, it doesn't explain why the demand for labor may increase when prices fall (which is quite typical).
Questfortruth86 2 years ago
Perhaps you have a mistaken preconception about this causal direction. The LTV doesn't claim that demand doesn't send signals about apportioning labor. It says that these signals that apportion labor are prices- that prices measure the apportioning of social labor between different productive activities, and that labor time is the basic thing that is being measured by price. The transformation problem you refer to is a different theoretical problem. It has nothing to do with this.
brendanmcooney 2 years ago
You're saying that "labor time is the basic thing that is being measured by price," but not explaining how or why (this is the transformation problem). Neoclassical's, like Marshal, believed that input prices affect, in fact determine, long-term prices of goods and services. This seems to be what you're saying, but you're ignoring other inputs, and simply placing the emphasis on labor, for whatever reason.
Questfortruth86 2 years ago
All inputs are labor inputs: either current labor or past labor embodied in commodities. (The one possible exception would be land, but the value of land does not grow from the soil, but from the productive relations it is enmeshed in.)
You don't know what the "transformation problem" is. You aren't even close. Watch my video on it.
brendanmcooney 2 years ago
"Labor time is the basic thing that is being measured by price."
I ask you to explain why and how this is so.
"The transformation problem is the problem of finding a general rule to transform the value of commodities (based on labour) into the prices seen in the market place." -Wikepedia.
How am I "not even close?"
Furthermore, how do you explain the phenomena of an increasing demand for labor, and a rise in real wages, when the general price level is declining (1880-1896 in the U.S)?
Questfortruth86 2 years ago
I've already explained how price measures labor time.
You should watch my vid on the transformation problem. The context of the problem involves the relation of value to price but the problem itself is more specific. It involves a supposed mathematical contradiction when input and output prices are held simultaneous in conditions of simple reproduction when distributing surplus value to reach an average rate of profit.
Rising demand for labor & rising productivity happen when capital expands.
brendanmcooney 2 years ago
Another problem with the LTV is that it simply doesn't (can't) explain real world phenomena. It doesn't tell me why a bottle of Budweiser at my local grocery store costs so much less than that very same Budweiser in a NYC club.
Questfortruth86 2 years ago
This is due to differences in rent as it factors into the cost price. When you buy a beer at a club you are also paying to be at a club. Nice try.
brendanmcooney 2 years ago
Okay, but you said that "the value of land does not grow from the soil, but from the productive relations it is enmeshed in" (be more abstract please). If that's the case, then why is the rent (per square unit x) so much higher for a NYC club, then, say, a steel mill in Pittsburgh (which has a lot more labor, and produces a lot more commodities)?
You're simply took one step backwards.
Questfortruth86 2 years ago
I can't summarize Marx's theory of Rent in a youtube comment box. Here are 2 basic points:
1. Value does not grow from the soil. Value which comes from land is an appropriation of value from producers. Rent on a factory appropriates some of the profit produced by that factory. Same for housing.
2. Land is not a reproducible commodity therefore it doesn't have value as the result of labor. Instead it takes monopoly rents. Yet investments in land involve labor and these add to the value of land.
brendanmcooney 2 years ago
Not all land takes monopoly rents, if I remember my Ricardo.
Questfortruth86 2 years ago
you* not you're.
Questfortruth86 2 years ago
By the way, the Austrians know that prices (the exchange of goods and services for money) are not a measure of value. Value is not measured, it's only graded. Prices are merely a reference point for individual action.
Questfortruth86 2 years ago
"... value is determined by the labour-time required for its production..."
"In this sense every commodity is a symbol, since, in so far as it is value, it is only the material envelope of the human labour spent upon it."
And so on, and so forth.
PrimeDirector 2 years ago
Workers are paid a wage in exchange for their labor, generally long before the product of their labor sells on the market and generally regardless of whether or not the product of their labor sells on the market.
If not for wages, how would workers subsist until such time as the product of their labor could be sold? The fact that the entrepeneur advances the worker the discounted present value of their labor is the reason the worker does not receive the full future value of his labor.
PrimeDirector 2 years ago
Yawn. Time-preference theory. hum. Subjective theory of value. yawn. Have you read any critiques of this theory or are you another boring Austrian parrot?
brendanmcooney 2 years ago
Non-responsive rhetorical questions in place of substantive answers. yawn.
PrimeDirector 2 years ago
I have 2 points to make
1. Since the marked is generaly stabil, that is, goods dont userly lose value. How can one then say that they get paid regardless of wether the products of their labor sells. ?
2. the entrepeneur advances the workers profit.. yes.. however why is it that that the value is allways greater for the entrepeneur, as is seen by the relative few rich workers. Obviosly there is a discreprency between the two, inspite of their common interest, and relative importence.
dinomand 2 years ago
I don't understand either of your questions.
2. the worker doesn't get a profit. The worker gets the wage. the Capitalist gets the profit. The worker creates both the value of the wage and profit.
1. are you asking why workers get paid even if their product doesn't sell? B/c that is how markets work- we don't realize the value of labor until it is compared with the products of other labor in the market. This is why value is a social phenomenon. Hence: "socially necessary labor time".
brendanmcooney 2 years ago
Hi Brendan
The 2 questions that I posed was a reaction to what PrimeDirector had written 6 days ago.
Not the wid wich I find ok and to the point.
If you see them in this light mabye you can give me your thoughts since I havent had a reaction from PrimeDirector yet..
dinomand 2 years ago
The worker gets a wage because he doesn't have command of the other factors of production, so he can't claim the full value of production. He's using someone else's tools, working in someone else's office or factory, etc. At most, he's entitled to the future marginal product of his labor... after said product is sold on the market. But then, it might not sell. However, if he accepts a wage, he is guaranteed an income based on labor hours worked.
PrimeDirector 2 years ago
Many, many entrepeneurs are former laborers.
Entrepeneurs are innovators in technology and organization. Being involved in the production process puts those workers with the right disposition in the right place at the right time to acquire the right kind of tacit knowledge to enable them to direct the means of production better than those who have never participated in the line of production in which they have gained their expertise.
PrimeDirector 2 years ago
Technically, the capitalist gets interest, not profit.
Its the entrepeneur who gets profit.
PrimeDirector 2 years ago
Am I mistaken, or is "socially necessary labor time" determined only after you actually take the product to market?
Is there any way, other than the cumulative subjective valuations of countless market participants, to arrive at an approximation of "socially necessary labor time?"
If not, then "socially necessary labor time" is hopelessly subjective rather than objective and intrinsic.
PrimeDirector 2 years ago
Yes. SNLT expresses the social nature of labor in a market- that value expresses relations between different parts of a social labor process, a process coordinated indirectly through markets. But it would be a mistake to confuse the subjective experiences of isolated consumers interacting w/ physical commodities with the social expression of labor in markets. The subjective consumer only exists within the structure of production for exchange. It's this structure which creates the form of value.
brendanmcooney 2 years ago
Numbers are abstract ideas, and ideas are a social phenomenon, but I don't need to ask a million other people what 2+2 equals to discover the answer.
I think the "social nature of value" in this context is immaterial, and I'm not sure why any argument that employs this premise isn't a nonsequitor.
Value is something people do. Its not an intrinsic quality residing in objects. SNLT can't be determined without referring to the market because value is subjective.
PrimeDirector 2 years ago
Marx does not argue that value resides in objects. Do you understand why markets are an essential part of the LTV? Do you understand the role in which subjective decisions about which commodities to purchase fits into the larger framework of the LTV? I'm asking b/c I can't tell from your past comments if you actually understand the theory or not.
brendanmcooney 2 years ago
Well, I guess you just understand Marx better than everyone else, including Schumpeter, who wrote that Marx was "under the same delusion as Aristotle, viz, that value, though a factor in the determination of relative prices, is yet different from, and exists independently of, relative prices or exchange relations. The proposition that the value of a commodity is the amount of labour embodied in it can hardly mean anything else."
Surely, there is much you could teach Schumpeter.
PrimeDirector 2 years ago
You didn't answer my questions.
When marx talks about value being "embodied in commodities" he is not, as you say, talking about intrinsic qualities, but of a social relation expressed thru commodities. Value does not exist independently of exchange. The fluctuations of relative prices are the mechanism by which value is established.
There is much misunderstanding of the LTV in the neoclassical academy. Merely quoting some elses's misreading of Marx does not make your misreading true.
brendanmcooney 2 years ago
If you're going to evade questions by posing rhetorical questions in response (as you did in our first exchange,) then you can't expect to be taken seriously when you complain that your former interlocutor didn't attempt to answer accusations and insults disguised as questions.
I take Schumpeter as more of an authority on this matter than you. Asserting that his take on the matter is wrong doesn't make it so. LTV is an intrinsic theory of value.
PrimeDirector 2 years ago
I was perfectly serious. Do you understand the role that consumer choice plays in the LTV? Do you understand why Marx saw markets as essential to the LTV? I would like you to be able to explain the theory which you are critiquing prior to that critique.
Re: Schumpeter I'd can list plenty of writers who can testify to the fact that Marx saw value as a social relation and not an intrinsic quality of objects: Marx, Rubin, Mandel, Harvey, Hilferding, Dobbs, Kliman, etc. All considered authorities.
brendanmcooney 2 years ago
"The value of commodities is the very opposite of the coarse materiality of their substance, not an atom of matter enters into its composition....it follows as a matter of course, that value can only manifest itself in the social relation of commodity to commodity. In fact we started from exchange value, or the exchange relation of commodities, in order to get at the value that lies hidden behind it."
Guess who wrote that!
brendanmcooney 2 years ago
Nice truncation.
"... If, however, we bear in mind that the value of commodities has a purely social reality, and that THEY ACQUIRE THIS REALITY ONLY IN SO FAR AS THEY ARE EXPRESSIONS OR EMBODIMENTS OF ONE IDENTICAL SOCIAL SUBSTANCE, VIZ. HUMAN LABOR, it follows as a matter of course..."
Pile on as much marxoid metajargon as you wish, but that's a pretty plain admission of the intrinsic nature of LTV.
Thanks so much.
PrimeDirector 2 years ago
"social substance". Please find a quote that says that value is intrinsic to objects and not an expression of a social relation.
brendanmcooney 2 years ago
"A use value, or useful article, therefore has value only because human labor in the abstract has been embodied or materialized in it. HOW, THEN, IS THE MAGNITUDE OF THIS VALUE TO BE MEASURED? PLAINLY, BY THE QUANTITY OF THE VALUE-CREATING SUBSTANCE, THE LABOR, CONTAINED IN THE ARTICLE. The quantity of labor, however, is measured by its duration, and labor time in its turn finds its standard in weeks, days, and hours."
Guess who wrote that.
PrimeDirector 2 years ago
In all of these quotes it is clear that value is a property of the social relation between producers as they exchange the products of their labor and not some eternal property belonging "intrinsically" to the commodity itself. Marx did not hold that any product of labor at any point in history had value. He saw that value was specific to commodity exchange and capitalism- a period in which social labor was coordinated thru indirect market exchange.
brendanmcooney 2 years ago
Technically, Marx said that socially necessary labour time determines the magnitude of value in a commodity. Not that it is identical, or that value is transhistorical. "As values, commodities are social magnitudes, that is to say, something absolutely different from their properties as things. As values, they constitute only relations of men in their productive activity."
allhailtuna 2 years ago
One of the reasons you see relatively few rich workers is that relatively few workers assume risk along with their employers.
Think about it: how often do you hear organized labor demanding profit sharing? Are the also willing to share losses? Would that be fair, to expect the worker, who just produces what the entrepeneur tells him to produce, to share in the negative consequences of the entrepeneur's decision making? Why then, should he share in the profit?
PrimeDirector 2 years ago
thank you for replying :)
True workers dont take the same risk as the entrepeneur, the entrepeneur take the risk for them, as you can see by the growing unimploiment lines. And I would maintain that it is a fallacy to maintain that there is a difference between interest and profit, both parties make their living from the surplus created by the selling of the product.
dinomand 2 years ago
If you honestly maintain that there is no difference between interest and profit, then you don't know what a residual is.
Profit is a residual.
Interest is not.
PrimeDirector 2 years ago
2, Also as can be seen from eksperiments with other organisational strucktures, there is no economic law that says that workers cannot parttake in the responsability of leading a cooporation, im thinking of syncalist orginisatons, and the like. As it is, there is a need for consentrating profits in the hands of those who makes the desicions, I agree with that, but saying that they take bigger chanses then workers, is in the practical world, not quite true, it sertenly is in regard to small
dinomand 2 years ago
Syndicalism is incoherent.
Its an unworkable kind of "worker's capitalism" in that it doesn't centralized ownership of the means of production in the hands of the state but instead distributes "shares" for each industry in the hands of the workers.
Does this eliminate, or even promote, inequality? No.
Does it provide for free entry into any field of labor? No.
Does it protect the consumer? No (the means of production are inalienable under syndicalism, right?)
Its just a mess.
PrimeDirector 2 years ago
Syndicalism is not just one thing, I suppose it could be called incoherent and a mess,, However like most other systems it works just fine when laws makes them possible. It is a system with 2 basic ways of making desicions.
1. all desicions must be in consensus (resulting in slow desicions) or
2. desicions made by representatives(basicaly like representative democracy, same as shareholders)
The only thing they have in common is that all that work for the company, owns the company.
dinomand 2 years ago
3, entrepeneurs, who does not have the resourses to soak up economic fluctuations. But this does only rarely affect big estaplised entrepeneurs. The situation in the US with big companies going bust is an unuseral accuranse, and most of these companys are suffering not because of the present economic crisesl, but because of irresponsable dispositions. Companies with more conservative strategies, generaly dont have any big problems.
I see no difference in workers and entrepeneur interests
dinomand 2 years ago
Excellent, I found your video extremely enlightening and really helpful in synthesising some of the theories I've already delved into, by giving them a simplistic basis and using modern examples to get ideas across. Cheers.
ParkLifeMike 2 years ago
The marginalist revolution put the LTV back in the shelves way long ago. Only marxist theorists stick to it because is the only way to make some sense out of the explotation argument. Still, marxism can't handle science even if they keep on calling themselves "scientific socialists" (Engels). Menger and Bohm Bawerk already disentangle the fallacies embedded into this argument in the late XIX century. Later on, von Mises and Hayek showed how socialism could not cope with economic calculation.
chokin2 2 years ago
Thanks for the stunning history of the LTV. While we are referring people to these debates perhaps I'll mention all of the rejoinders to these arguments you mention. I suggest Hilfdering's reply to Bohm-Bawerk. I suggest I.I. Rubin for a defense of Marx's method. For a critique of marginalism: Maurice Dobbs. For a general history of replies to the Austrian critique: Kevin Carson. For the calculation debate: Oscar Lange. Of course my videos aren't about socialism... neither is the LTV.
brendanmcooney 2 years ago
I'm unfamiliar with all the references you provided here. Thank you for the info though, and rest assured that I'm gonna spend some time on it. As for the calculation debate, neither Oskar Lange nor Fred Taylor nor Abba Lerner managed to come up with something as reasonable as to really counter Mises and Hayek's arguments.
chokin2 2 years ago
These products are not produced by labor alone. It takes planning, investing, managing, and many other roles to efficiently produce products and services.
Workers are compelled by necessity, but not by any human being. Therefore there is no exploitation by capitalists unless they use government to initiate force against innocent people.
Labor that goes into a product does not determine its value. That theory fails to see the subjective determinants of value. personal wants, desires, needs etc.
truthadvocate 2 years ago
Not all labor produces value. Not all material factors of production produce value.
I do not understand the logical correlation you make between state coercion and exploitation. Exploitation results from a difference between the wage and the value created by labor. It doesn't matter who or what compels the worker to work.
Your vague assertion of subjective factors does not consider how these subjective factors work in the context of a market which coordinates social labor.
brendanmcooney 2 years ago
Exploit - to make use of selfishly or unethically. To employ to the greatest possible advantage. We provide labor for which we receive compensation. Government steals a percentage of that compensation. In essence we are forced to work for government. In return government provides us with bad "services." Bad because they are a government monopoly with no competitive incentive to provide high quality at a low price. The value of our taxes is greater than the crap we receive in return.
truthadvocate 2 years ago
Well I am talking about a different definition of exploitation. My definition of economic exploitation: to profit from someone else's labor; to appropriate the surplus of another. In capitalism a unique form of exploitation arises in production.
The state does appropriate surplus labor through taxes. It appropriates value from wage laborers and profit from capitalists. This value and profit has already been created in production.
brendanmcooney 2 years ago
Who do you classify as labor? What do you use to divide who is labor and who is a capitalist? I think all people involved are necessary for profit to be created. If labor didn't need capitalists to create a profit, wouldn't labor just form their own companies?
How do you define production. To me, production is just one of many steps in the creation of a product. (customer service, design, planning, management, distribution, marketing, etc.)
So you'd agree government exploits. or wouldn't you?
truthadvocate 2 years ago
The government appropriates. This is different from exploitation because government appropriation does not happen in production. It happens outside of the labor-capital relation and outside of the market.
Labor is work. But not all labor creates value. Only labor which creates commodities creates value. There is a difference between being a factor of production and creating value.
brendanmcooney 2 years ago
Subjective factors work in the context of a market which coordinates social labor in a natural way. You've heard this argument before I'm sure. Value is subjective. Roy determines value based on Roy's desire and need for the object. Roy exchanges one thing he desires less (a lower value) for another thing he desires more (a higher value). All voluntary exchanges occur only if all participating parties view what they're receiving as having a higher value as what they are giving. Same with wages.
truthadvocate 2 years ago
The argument that price is solely the result of subjective desires relies on a radical skepticism of cost-price. Do you think that the cost of production doesn't condition price at all? Do you think that income doesn't condition one's spending? If not then we need a theory of income distribution and of production cost. That is what it means to say that the LTV explains the conditions behind supply and demand.
brendanmcooney 2 years ago
There is basically one subjective factor in a market: to maximize one's advantage and minimize one's labor. This why we can have a socially necessary labor time. If this subjective valuation has the same tendencies for all f us then how subjective is it really?
brendanmcooney 2 years ago
The same theory I described applies to income distribution. People with common skills are willing to work for less. Some skills & experience are more difficult to find & thus more highly desired by employers. I don't see why this requires LTV.
An item's cost may be more than it's value according to consumers, in which case you should not create it.
Income does have an effect on one's spending. If they have a larger supply of money, they desire each dollar less. Still no need for LTV.
truthadvocate 2 years ago
So the amount of money we have to spend relies on either the amount of labor we have performed (and multiples of this for skilled labor) or the amount of surplus we have exploited from someone else. Again, labor is the creator of this substance of value.
you are right that if a capitalist can't realize the cost of making a commodity then that commodity can't be reproduced. Therefore, since competition forces price down, cost of production is the ultimate regulator of price.
brendanmcooney 2 years ago
"cost of production is the ultimate regulator of price." No it's not. A product can be made and sold for a price below it's cost, when the demand is over-estimated. When this occurs the market immediately corrects itself, a nice quality of the free market.
I'm curious, I believe you said you were not a Stalinist. I greatly respect that. What kind of government do you support? Who runs it? How will they be chosen? Or will this be a free society without a coercive government?
truthadvocate 2 years ago
When you say that the market corrects itself this is exactly what I am talking about! At least we agree on something. That is what value is- a regulator of the intrinsic value of commodities. Prices fluctuate around values all the time, but values always pull these prices back toward their "natural" or "equilibrium" price. This equilibrium price must have a relation to labor time if there is to be any allocation of the labor between sectors.
brendanmcooney 2 years ago
A person's value manifests in action. If action is coerced, which includes prohibition of wage labor, then values are not manifest and they are uknown forever. Any criticism of labor is a criticism of people's values.
The CORRELATION between labor and value just means that a lot of people work towards supplying others with things that they subjectively value. It is simple to SEE that this is only a correlation. Unvalued goods seize to exist therefore very little labor is used to produce the
georgeme89 2 years ago
Great video. Like most other people, I'd dismissed LTV due to misunderstanding it. I didn't understand that it was intended as an EXTENSION OF classical economics rather than a replacement.
Even so, it seems problematic in terms of measurement. I'm just not sure how easy it is to quantify a worker's experience, skills, drives, abilities when applied to various tasks. This becomes even more complicated in non-standard jobs. I mean, maybe some CEOs really are worth their salary due to skills
SBRslacker00 2 years ago
Sorry, but you guys are confused. Individualistico is completely correct.
The "computer example" was in error. Prices go down due to efficiency in production, resulting in surplus, not a lack of labor.
There's probably more labor in the computer industry than ever, due to increases in supply chain complexities.
The points Individualistico made hold. His basic argument is that pushing a rock across a room takes work, but no one is going to pay for it because no one cares.
sativo99 2 years ago
The amount of labor put into a product is irrelevant as to how much of something it can purchase. No matter how much labor you put into producing something that no one finds of use, no one will pay you for it.
Individualistico 2 years ago
It is true that a commodity must have a use value and an exchange value to be a commodity. How does this mean that the labor process has no bearing on the value of a commodity?
brendanmcooney 2 years ago
Because no one cares how much labor you put into producing something when they decide how much to pay you for it. All they care about is that what you're offering for sale is useful to them. The quantity of labor exerted is completely irrelevant, and there's no rational reason I can see why it should be relevant.
Individualistico 2 years ago
b/c 1. demand depends on the amount of income consumers have and how much they are willing to part with it relative to how hard it is to get more income. This income is payment for their labor.
2. Supply is created by labor. It requires wages to be paid. People who hire laborers must decide how to best use that labor so that it is most efficient. They are very careful to measure the efficiency of labor productivity relative to the cost of labor.
Behind supply and demand labor regulates price.
brendanmcooney 2 years ago
People who purchase labor don't care how much labor is performed when they decide how much to pay labor. They pay based on how useful the given quantity of labor is. It doesn't matter how hard someone is working for an employer, if his labor is not useful then he's not going to paid anything at all. Behind supply and demand is usefulness & scarcity, not quantities of labor.
Individualistico 2 years ago
Imagine two people working on an assembly line, with different metabolisms. One exerts more energy to do the same job than the other person. For the employer, this is irrelevant in deciding how much he's willing to pay him. Both workers' labors have the same exchange value even tho one is working harder than the other.
Individualistico 2 years ago
So income has nothing to do with how much work anyone performs. It has to do with how useful that work is to other people, in conjunction with scarcity of the supply of that kind of work.
And again, I don't see any rational reason why how much work people perform should be taken into account in regarding how much they should be paid.
Individualistico 2 years ago
If I work for 8 hours instead of 7 I get paid more.
brendanmcooney 2 years ago
Not if you change the type of labor you're doing in that extra hour. If it's a type of labor that the employer does not value, then he won't pay you for it. It's not the fact that you work that you get paid, but the fact that the kind of work you are doing is valued by someone else.
Individualistico 2 years ago
That's absurd. Ask any employer what happens when one worker can't keep up with the average intensity of work. They get fired. There is an entire field of theory- management theory/industrial psychology- devoted to the problem of increasing the productivity of workers relative to their wages,
brendanmcooney 2 years ago
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Individualistico 2 years ago
This has been flagged as spam show
No, the employer doesn't care about the "intensity of work." If you exert more energy than another employee but you produce the same amount of widgets, you're not going to be paid any more than the other employee.
Let's say you're breaking rocks. If you've found a way to hit rocks just right so they break into pieces by hitting them lightly, you're still going to be paid as much as the guy exerting more energy who has to hit the rock twice. The employer doesn't care how much energy you use.
Individualistico 2 years ago
The usefulness of a worker is his/her ability to work. The interest of the employer is to get as much work as possible for the lowest wage.
brendanmcooney 2 years ago
That's not true. I'll willing to pay you more than the next guy to work if you perform the same amount of work as the next guy but if it's of a nature that I find more useful. Let's say you're a ditch digger. If I don't find your service useful, I won't pay you anything. I'm looking for a piano tuner. There's MUCH less labor involved in it, but I'm going to pay you more for it - because that's of more use to me.
You really need to move on past the 19th century in economics.
Individualistico 2 years ago
Here you confuse the use value of commodities with the use value of labor to an employer. You all conflate an individual's subjective valuation of commodities with the social determination of value. Do you understand the differences between these? Perhaps you shouldn't dismiss theories you don't understand.
brendanmcooney 2 years ago
I'm doing no such thing. I'm showing you that people don't pay each other for labor or goods based on how much energy they exert. You might wish that they would, but they don't. Quantity of labor exerted is completely irrelevant as regards to differences among people in income. What determines the prices of goods and labor in a market economy is the combination of usefulness to those bidding on these things and scarcity.
Individualistico 2 years ago
Yes a commodity must have a social use value if it is to become a commodity. I agree w/ you on this point and so would have the classical economists. Your repetition of this is not a criticism of the LTV.
Demand for commodities triggers a change in supply. Once demand and supply are in balance we have equilibrium prices. But what determines the differences between prices of commodities? This was the question which led classical economy to examine the role of labor in regulating supply and demand
brendanmcooney 2 years ago
What determines the differences between prices of commodities is their utility combined with their scarcity. If something is in unlimited supply, it's going to be free. If something has no use whatsoever to anyone - that is, no one wants it - it's going to be free. If usefulness increases and supply stays the same, price goes up. If usefulness stays the same and supply goes up, price goes down.
Have you studied marginal utility?
Individualistico 2 years ago
If something takes no labor to make it will be free. If something is extremely labor intensive it will be more expensive. This is empirically observable.
Yes I am quite familiar with marginal utility. I find it woefully inadequate on many levels.
brendanmcooney 2 years ago
If something takes no labor to make it does not mean it will be free. If something took no labor to make, it would not be free if it was in limited supply and people found it useful. The fact that it was in limited supply requires that people bid against each to obtain it, and the fact that it was useful is why they would bid on it.
Individualistico 2 years ago
And if something is extremely labor intensive it doesn't mean it will be more expensive. I can work all year inventing something, but if when I'm done people find it of little or no use, they won't be willing to pay a lot of money for it.
What makes things expensive is that they're highly useful to other people and they're in limited supply.
Individualistico 2 years ago
Give an example of something that has exchange value but does not involve a labor process.
brendanmcooney 2 years ago
There is no such thing as a thing that has exchange value but does not require labor to obtain. But if such a hypothetical thing did exist, the reason it would not have exchange value is not because it required no labor to obtain, but because it was not useful to anyone or it was in unlimited supply.
Individualistico 2 years ago
There is actually no such thing, period, as a thing that requires no labor to obtain. Even the air we breathe requires the labor of inhaling. So the fact that there is no such thing that has exchange value but does not require labor to obtain is not proof that price is proportional labor exerted. It's just that there is no such thing at all that requires no labor to obtain.
Individualistico 2 years ago
Antiques gaining in value with age? Wine gaining in exchange value when all that has to be done is for the wine to be purchased and locked up in a store room?
Catholicboy4life 2 years ago
If that were true, then the employer would hire ANYBODY. But no, he hires someone that's capable of a particular kind of work. He's not just looking for someone that exerts a lot of energy.
You think you're looking behind supply and demand, but you're not looking far enough behind it. What determines the price of labor is the subjective usefulness of it in combination with the supply available of it.
I'm going to make a video explaining why things have different prices.
Individualistico 2 years ago
No. Obviously the employer hires employees who can provide specific types of labor. Once employed the employer then must figure out how to get the most efficient use of this wage bill. The more workers he buys and the longer they work the more supply there is. The more wages workers earn the more demand there is for commodities.
brendanmcooney 2 years ago
There is no reason I can see to conclude that the more wages workers earn the more demand there is for commodities. Money just changes hands. There's not more money in the world just because someone starts getting paid more.
Individualistico 2 years ago
The more money a person has the more they spend.
The more work that is done the more value there is in the economy to be exchanged.
brendanmcooney 2 years ago
No, not the more work done the more value in the economy. This is where your error is. It's not mere energy expended that creates value. One person can create more value with less energy expended that another person. Working smart is what creates value, not just sheer work. A person can toil all day and produce nothing of value. Value created cannot be determined by the amount of energy expended.
Individualistico 2 years ago
I'm not going to repeat myself again: the labor theory of value does NOT hold that commodities have exchange value without use value.
brendanmcooney 2 years ago
Comment removed
Individualistico 2 years ago
I understand that, but it does hold that exchange value is proportional to labor exerted. It's fallacious. It two things have use value but one has a higher market price than the other, it's not that one took more labor to produce than the other that makes it more expensive, but that one has more use value than other and/or it's more scarce than the other. How much labor was behind its production is not relevant to its market price.
Individualistico 2 years ago
Comment removed
Individualistico 2 years ago
And these "things" include labor itself. Two hours of equal exertion have different prices because the use value and scarcity of these types of exertion are different. They're different kinds of labor even though they're the same quantity of labor or exertion. The quantity of labor is not relevant to the market price of anything.
Individualistico 2 years ago
Are you familiar with Marx's distinction between intensity of labor, extensity of labor and productivity of labor? Or of the idea of simple labor or multiples of simple labor?
brendanmcooney 2 years ago
The term "extensity of labor"? no.
Individualistico 2 years ago
What about in the long run, after supply has adjusted to meet demand? What determines the relative prices between commodities?
Secondly, are you familiar with the various levels of abstraction marx works with when discussing the relation of socially necessary labor time to the exchange value of individual commodities, such as abstracting from short-run fluctuations in supply and demand, the idea of prices of production and/or that aggregate equality total price=total value?
brendanmcooney 2 years ago
One would think people would at least read the first section of the first chapter of 'Capital' (commodities have values and are use-values by definition, and he is talking about commodities). Apparently this is not that case.
allhailtuna 2 years ago
The guy who made this video is a fucking idiot! He is a Marxist who HIMSELF is "bourgeois" - he is in the top 10-20% of wealthiest people in the world and this idiot is whining about the elite? What a fucking fool!
leeason1 2 years ago
At least when he talks about Marxism, he knows what he is talking about.
allhailtuna 2 years ago
I would recommend reading Eugen von Boehm-Bawerk's critique of Marx's exploitation theory.
mcmcbrayer 2 years ago
Hey brendanmcooney. Im watching your vids and I like them a lot. Very insightful. I am a Telecomunications Engineer ( I mention this only because I want you to know I have a proffesional formation and a very good formation on advanced mathematics that are very usseful on economics for the answer you are going to give me next) an Im starting to read about economics becuase i found it very interesting and neccesary. I want you to tell me wich books for starters, topics or webpages to read, thx
errrzarrr 3 years ago
I highly recommend Ernest Mandel as an accessible introduction to economics. His book "marxist economic theory" is a great read. David Harvey is one of my favorite contemporary thinkers. He has a great website: davidharvey. org. If one has the patience, Marx's Das Kapital is a great read.
brendanmcooney 3 years ago
I remember someone telling me at university that the Labor Theory of Value hyas been discredited. His point was that computers for example, are made largely by machines in an automated manner unlike pens which require more labour. His proposal sounds stupid to me, but he kept saying the same thing? Does he have a point? I replied by saying that machines are created by human labour etc.
jumpnjza2 3 years ago 3
That's funny. i usually use computers as an example of the LTV: 1. as the manufacturing of computers becomes more efficient (as less work goes into making them) the price falls. 2. Computers have replaced much work that used to be labor: duplicating, calculating, etc. These tasks no longer have economic value. ie: You wouldn't pay me to copy out a book by hand (people used to do that in the 1800s) b/c a computer could do it for free. Once labor is eliminated from a task the task looses value.
brendanmcooney 3 years ago
That's makes perfect sense.
jumpnjza2 3 years ago 2
Hi. How do you use labor theory of value to explain housing prices or stock prices? It seem to me there are limitations on applicability on when you could use this theory.
mahathirfan 3 years ago
Stocks have to do with something marx called "fictitious capital"- a result of credit monies, something I discuss in my "what is credit video".
I have yet to make a video regarding the theory of rent, but I'll say this re housing price: Housing prices represent a confluence of factors including the labor that goes into making a house and the way capital moves through property too coordinate the production of value on land. I know this sounds vague, but it's too big a topic to summarize here.
brendanmcooney 3 years ago
The marxist analysis of the recent implosion of housing prices is a great example of the way in which value theory in relation to land is really important to an understanding of the current crisis. There is a good lecture on David Harvey's website called "a Financial Katrina" that discusses some of this theory.
brendanmcooney 3 years ago
What is your response to 'marginal utility theory'?
dahizou 3 years ago
If labor is the source of all value, why should landowners or capitalists get anything? In the neoclassical story, "contribution = marginal product". But the "contribution" of landlords and capitalists is passive and absent from the production process. Merely granting permission for land and capital to be used in exchange for a percentage of proceeds is not a productive activity. To produce material goods, we need human labor nonhuman raw materials. But why do we need landlords or capitalists?
davidlkendall 3 years ago
I think that marginal utility leaves out the most essential questions of economic analysis. It narrows the focus of economics on the immediate determination of price without asking about the wider social structures that create price. In contrast the LTV explains the apportioning of human labor via echange and prices in a way that reproduces the class structures of society, thus allowing for a more robust understanding of economic, political and social life.
brendanmcooney 3 years ago
Thanks for your repl(ies). These reflect my initial impression, it just seems as if Marxist rebuttal of marginal utility is thin on the ground and until I understand marginalism properly I won't be quick to merely dismiss it. Opponents of LTV (including some reformists) always cite it, so I'm often at a loss to explain why they shouldn't accept this facet of bourgeois ideology.
dahizou 3 years ago
"The first problem in using marginal utility to determine price is that it leads
to circular reasoning. Prices are supposed to measure the "marginal utility" of
the commodity, yet consumers need to know the price first in order to evaluate
how best to maximize their satisfaction.
dahizou 3 years ago
Hence subjective value theory
"obviously rest[s] on circular reasoning. Although it tries to explain prices,
prices [are] necessary to explain marginal utility." [Paul Mattick, Economics,
Politics and the Age of Inflation, p.58]
dahizou 3 years ago
I'm going to work really slow on this peanut butter sandwich so that it's worth a billion dollars
DURR
What I'm saying (asking) is what is the proper socialist response to that argument
ElCagafuego 3 years ago
While individual concrete labor creates the value of a particular commodity, this value only makes sense in relation to the value of other commodities. Thus value is also a social creation. The value of a particular commodity is equal to the "socially necessary labor time" it takes to make it. If you make something above the socially necessary time you still have to sell it at the socially necessary labor time. If you can make it for less, you can sell it for less and thus undercut competition.
brendanmcooney 3 years ago
Sir, that pipe gives you unbelievable credit. Where can I get a pipe like that?
evanAU 3 years ago