The work value theory ( LTV ) is a value theory that believes that the economic value of a good or service is determined by the total amount of "socially necessary labor" required to produce it, not by the use or pleasure that the owner derives from it (demand) and its scarcity (supply). It does not say that the value of a commodity is determined by the actual amount of labor it contains, but the average amount required to produce it. This is called "socially needed labor".
LTV is usually associated with Marxist economics, although it can also be used in earlier liberal economist theories like Adam Smith and David Ricardo and later also in anarchist economics. Smith sees the price of a commodity in the form of work a buyer must buy to buy it, which embodies the concept of how much labor a commodity, a tool, for example, can save a buyer. LTV is the center of Marxist theory, which states that the working class is exploited under capitalism, and separates price and value. Marx never referred to his theory of value as a "value theory of work" even once. Modern economies tend to reject the need for LTV, concentrating more on the pricing theory determined by supply and demand.
Video Labor theory of value
Definition of value and labor
When speaking within the framework of the value theory of work, "value", without qualifying adjectives, should theoretically refer to the amount of labor necessary to produce marketable commodities, including the labor needed to develop any real capital used in production. Both David Ricardo and Karl Marx tried to measure and manifest all the components of labor to develop real price theory, or the natural price of a commodity. The value theory of work as presented by Adam Smith does not require the quantification of the labor of the past, nor does it deal with the labor required to create the tools (capital) that may be used in producing commodities. Smith's value theory closely resembles a later theory of utility that Smith proclaims that a commodity is worth whatever work he will command others (value in trade) or any work that will "save" (value in use), or second. However, this "value" is subject to supply and demand at any given time:
The real price of every thing, what is really worth the person who wants to get it, is hard work and difficulty getting it. What is truly valuable to a person who has it, and who wants to throw it away or exchange it with something else, is the hard work and trouble that can save itself, and which can be overtaken by others. ( Wealth of Nations Book 1, chapter V)
Smith's price theory (which for many people equals its value) has nothing to do with the past labor spent in commodity production. He only talks about work that can be "commanded" or "saved" right now. If there is no use for a buggy whip, then the item is economically useless in trade or use, regardless of all the labor spent in creating it.
The economically relevant job difference
The value "in use" is the use of this commodity, its usefulness. Classic paradox often arises when considering this type of value. In Adam Smith's words:
The value of a word, it must be observed, has two different meanings, and sometimes reveals the usefulness of some particular object, and sometimes the power of purchasing other items possessed by that object. That may be called "value in use"; the other, "value in exchange." The things that have the greatest value used have little or no exchange rates at all; and, conversely, those who have the greatest value in exchange often have little or no value at all. Nothing is more useful than water: but he will buy something rare; something rare can be gotten instead. A diamond, on the contrary, has a rare value used; but a large number of other items may often be exchanged for it ( Wealth of Nations Book 1, chapter IV).
The value of "in exchange" is the relative proportion in which this commodity exchanges other commodities (in other words, the price in the case of money). This is relative to work as described by Adam Smith:
The value of each commodity, [...] to the person who owns it, and which means not to use or consume itself, but to exchange it with other commodities, equal to the quantity of labor that allows it to buy or command. Labor, therefore, is a real measure of the exchange rate of all commodities ( Wealth of Nations Book 1, chapter V).
Value (without qualification) is labor manifested in a commodity under a particular production structure. Marx defines the value of a commodity by a third definition. In its words, value is the 'socially necessary abstract work' embodied in a commodity. For David Ricardo and other classical economists, this definition serves as a measure of "real cost", "absolute value", or "value size" unchanged under changes in distribution and technology.
Ricardo, another classical economist and Marx began their exposition on the assumption that the exchange rate is equal to or equal to the value of this labor. They think it is a good assumption to explore the dynamics of development in capitalist society. Other supporters of the value theory work using the word "value" in the second sense to represent "exchange rates".
Maps Labor theory of value
LTV and labor
Since the term "value" is understood in LTV as indicating something created by labor, and "magnitude" as something that is proportional to the quantity of labor performed, it is important to explain how labor processes both retain value and add new value to the commodity it creates.
The value of a commodity increases in proportion to the duration and intensity of work performed on average for its production. Part of what LTV is meant by "socially necessary" is that its value only increases in proportion to this work because it is done with average skill and average productivity. Thus, although workers may work with greater skill or higher productivity than others, these more skilled and more productive workers generate more value through the production of large quantities of ready-made commodities. Each unit still has the same value as another of the same commodity class. By working indiscriminately, unskilled workers can lower the average skill of the workforce, thereby increasing the average work time required for the production of each commodity unit. But these unskilled workers can not expect to sell the proceeds from their work processes at a higher price (against value) simply because they have spent more time than other workers who produce the same type of commodity.
However, production involves not only labor, but also certain ways of working: tools, materials, power plants and so on. These ways of working - also known as production tools - are often the result of other work processes as well. So the work process must involve the means of production that have entered the process with a certain amount of value. Labor also requires other production means that are not produced by labor and therefore have no value: such as sunlight, air, unplanted land, unextracted minerals, etc. Although useful, even important for the production process, this does not bring value to the process.. In the case of production equipment generated from other labor processes, LTV treats the value of these manufactured devices as constant during labor. Because of the firmness of their value, these means of production are called, in this case, as constant capital.
Consider for example a worker who takes coffee beans, use a grill machine to bake it, and then use a beer to brew and take out a fresh cup of coffee. In doing this work, these workers add value to coffee beans and water consisting of basic ingredients of a cup of coffee. Workers also transfer the value of constant capital - seed value; some special values ​​from roasters and brewers; and the value of the cup - for the last cup coffee value. Again, the average worker can transfer no more than the value of work tools previously owned for a cup of coffee so the value of coffee produced in a day equals the sum of both the value of the means of labor - this is constant capital - and the value of which is newly added by the worker in proportion to the duration and intensity of their work.
Seringkali ini dinyatakan secara matematis sebagai:
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- adalah modal konstan dari material yang digunakan dalam suatu periode ditambah bagian yang disusutkan dari peralatan dan pabrik yang digunakan dalam proses tersebut. (Periode biasanya adalah hari, minggu, tahun, atau satu kali pergantian: artinya waktu yang diperlukan untuk menyelesaikan satu bets kopi, misalnya.)
- adalah jumlah waktu kerja (keterampilan dan produktivitas rata-rata) yang dilakukan dalam memproduksi barang jadi selama periode
- adalah nilai (atau rasa "nilai") dari produk periode ( berasal dari kata Jerman untuk nilainya: wert )
Note: if the product produced from the birth process is homogeneous (all similar in quality and properties, for example, all cups of coffee) then the product value of the period can be divided by the total number of items (value-useful or ) are manufactured to lower unit values ​​for each item. where is the total item generated.
LTV further divides the added value during the production period, , into two parts. The first part is part of the process when workers add value equivalent to the wages they pay. For example, if the period is one week and these workers are collectively paid $ 1,000, then the time it takes to add $ 1,000 to - while maintaining the value - constant capital is considered part of the required workforce of the period (or week): denoted . The remainder of the period is considered a part of the labor surplus in a week: or . The value used to purchase labor, for example $ 1,000 paid to these workers for a week, is called a variable capital ( ). This is because different from the constant capital spent on the means of production, variable capital can add value in the labor process. The amount added depends on the duration, intensity, productivity, and skill of the purchased manpower: in this sense the purchaser of labor has purchased a variable usage commodity. Finally, the value added during the part of the period when the surplus work is done is called surplus value ( ). From the variables defined above, we found two other common expressions for values ​​generated over a given period:
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Bentuk pertama dari persamaan menyatakan nilai yang dihasilkan dari produksi, dengan fokus pada biaya dan nilai lebih yang dialokasikan dalam proses produksi, . Bentuk kedua dari persamaan berfokus pada nilai produksi dalam hal nilai yang ditambahkan oleh kerja yang dilakukan selama proses .
Hubungan antara nilai dan harga
One problem facing LTV is the relationship between the amount of value in one hand and the price on the other. If a commodity value is not equal to the price, and therefore the magnitude of each possibility is different, then what is the relationship between the two, if any? The various schools of thought of LTV provide different answers to this question. For example, some argue that value in terms of the amount of work embodied in good action as the center of gravity for price.
However, most economists will say that the case in which the price is given is approximately equal to the value of labor manifested, in fact only a special case. In general, theoretical price usually fluctuates. The standard formulation is that prices typically include income levels for "capital" and "land". This income is known as "profit" and "rent" respectively. But Marx emphasizes that value can not be placed on labor as a commodity, because capital is constant, while profit is variable, not income; thereby explaining the importance of profit in relation to price variables.
In Book 1, chapter VI, Adam Smith writes:
The true value of all parts of different price components, should be observed, measured by the quantity of labor they can, respectively, purchase or command. The worker measures the value not only of the part of the price that completes itself into labor, but from that which settles itself into a rent, and from that it completes itself into profit.
The last sentence explains how Smith sees the value of a product as relative to the labor of the buyer or consumer, in contrast to Marx who sees the value of a product comparable to that of a laborer or a producer. And we value something, give them a price, based on how much labor we can avoid or command, and we can order work not only in a simple way but also by trading something for profit.
Demonstration of the relationship between the value of commodity units and their respective prices is known in Marxist terms as a matter of transformation or transformation of values ​​into production prices. The problem of transformation may have produced most of the debate about LTV. The problem with transformation is to find an algorithm in which the amount of value added by labor, in proportion to its duration and intensity, is sufficiently noted after this value is distributed through a price that reflects the same rate of return. If there is an additional value or loss of value after the transformation, then the relation between value (proportional to labor) and price (proportional to total capital) is incomplete. Various solutions and the impossibility of the theorems have been offered for transformation, but the debate has not yet reached a clear resolution.
LTV does not deny the role of supply and demand affect the price, because the price of a good is something other than its value. In Value, Price and Benefit (1865), Karl Marx quotes Adam Smith and summarizes:
- Suffice it to say that if supply and demand balance each other, commodity market prices will match their natural price, that is, by their values ​​as determined by the amount of each workforce required for their production.
LTV is trying to explain this level of equilibrium. This can be explained by the argument production costs - indicating that all costs are ultimately labor costs, but these do not take into account profits, and are vulnerable to tautologic charges as they explain price based on price. Marx then calls this "Smith adds value theory".
Smith argues that labor value is a natural measure of exchange for direct producers such as hunters and fishermen. Marx, on the other hand, uses the analogy of measurement, arguing that in order for commodities to be comparable, they must have the same element or substance to measure it, and that labor is the common substance of what Marx eventually calls the commodity- the values ​​< i>.
History
Origins
The value theory of work has evolved over the centuries. There is no single originator, but many different thinkers arrive at the same conclusion independently. Aristotle claimed to hold on to this view. Some authors trace their origins to Thomas Aquinas. In his book Summa Theologiae (1265-1274) he expressed the view that "... values ​​can, can and should increase in relation to the amount of labor that has been incurred in increasing commodities." Scholars such as Joseph Schumpeter have quotes Ibn Khaldun, who in his book Muqaddimah (1377), describes work as the source of value, which is necessary for all income and capital accumulation. He argues that even if it obtains "the result of something other than a craft, the value of the profit generated and acquired (capital) must (also) include the value of labor it obtains." Without labor it will not be obtained. "Scholars have also pointed on Sir William Petty
Adam Smith accepted the theory for pre-capitalist society but saw a flaw in its application to contemporary capitalism. He points out that if the "manpower embodied" in a product equals the "work order" (ie the amount of labor that can be bought by selling it), then profit is not possible. David Ricardo (seconded by Marx) responded to this paradox by stating that Smith had confused labor with wages. "Labor is commanded," he argues, will always be more than the labor needed to defend itself (wages). The value of labor, in this view, includes not only the value of wages (what Marx calls the value of labor), but the value of all products created by labor.
Ricardo's theory is the forerunner of modern theory that the equilibrium price is determined solely by the cost of production associated with Neo-Ricardianism.
Based on the difference between wages and product values, the "Ricardian socialist" - Charles Hall, Thomas Hodgskin, John Gray, and John Francis Bray, and Percy Ravenstone - applied Ricardo's theory to developing the theory of exploitation.
Marx expands these ideas, arguing that workers work for part of each day adding the value needed to cover their wages, while the rest of their work is done for capitalist enrichment. LTV and the accompanying exploitation theory became the center of economic thinking.
19th century American individualist anarchists base their economies on LTV, with their specific interpretation of so-called "cost-cutting costs". They, as well as contemporary individualist anarchists in the tradition, argue that it is unethical to charge higher prices for a commodity than the amount of labor required to produce it. Therefore, they propose that trade should be facilitated using records supported by labor.
Adam Smith and David Ricardo
Adam Smith states that, in primitive societies, the amount of labor put into producing a well-defined exchange rate, with a significant exchange rate in this case the amount of labor that can be purchased well. However, according to Smith, in a more developed society the market price is no longer proportional to the labor cost because the present value of the goods includes compensation for the owner of the means of production: "All work is not always the property of the worker He must in many cases share it with the stock owner employs it. "" Nevertheless, the 'real value' of commodities produced in advanced societies is measured by the labor that the commodity will command in exchange... But [Smith] does not recognize what is naturally regarded as an original classical work theory of the value, that labor costs regulate market value.The theory is Ricardo, and really his own. "
The theory of the value of the labor of the classical economist David Ricardo states that the value of the good (how much other goods or services he exchanges in the market) is proportional to how much labor is needed to produce it, including the labor needed to produce the raw goods. materials and machines used in the process. David Ricardo states it as, "The value of a commodity, or quantity of any other commodity to be exchanged, depends on the relative quantity of labor required for its production, and not as a greater or lesser compensation paid for that labor." 1817) In this connection Ricardo seeks to distinguish the amount of labor necessary to produce commodities from the wages paid to the workers for their production. However, Ricardo is troubled by some price lapses of proportionality with the labor required to produce it. For example, he says, "I can not overcome the difficulty of wine, which is stored in the basement for three or four years [ie, while increasing in exchange rates], or that of the oak tree, which may initially not be 2 s. it's on the road of work, and it will be worth  £ 100. "(Quoted in Whitaker) Of course, the capitalist economy stabilizes this difference until the value added to the old wine equals the cost of storage. If anyone can hold a bottle for four years and get rich, it will make it hard to find newly clogged wines. There is also a theory that adds that the price of a luxury product increases its exchange rate with mere prestige.
The labor theory as an explanation for the value contrasts with the theory of subjective value, which says that the value of the goods is not determined by how much labor is put into it but because of its usefulness in satisfying its desires and its scarcity. Ricardo's work value theory is not a normative theory, as some forms of labor theory, such as the claim that it is immoral for an individual to be paid less for his workforce than the total income derived from the sale of all the goods he produces.
It is arguable to what extent this classical theory holds the value theory of work as it is generally defined. For example, David Ricardo theorized that the price is determined by the amount of labor but found an exception that can not be explained by the theory of labor. In a letter, he writes: "I am not satisfied with the explanation I give about principles that govern values." Adam Smith theorizes that the value theory of work applies only in "the state of early and abusive society" but not in the modern economy in which the owner of capital is compensated by profit. As a result, "Smith ended up using a little theory of work value."
Anarchism
The relationship between Pierre Joseph Proudhon and American individualist anarchists such as Josiah Warren, Lysander Spooner and Benjamin Tucker adopted Liberal Labor Theory of Classical economic value and used it to criticize capitalism while supporting a non-capitalist market system.
Warren is widely regarded as the first American anarchist, and the four-page weekly paper he edited during 1833, The Peaceful Revolutionist, was the first published issue of anarchist. The cost-price charge is a proverb created by Warren, showing the (prescriptive) version of the work value theory. Warren argues that fair compensation for the workforce (or for its products) can only be the equivalent amount of work (or a product that embodies an equivalent amount). Thus, profits, rent, and interest are considered unfair economic arrangements. In accordance with Adam Smith's The Wealth of Nations tradition, "labor costs" are considered subjective costs; that is, the amount of suffering involved in it. He tested his theories by building an experimental "labor force for labor shop" called the Cincinnati Time Store at the corner of 5th and Elm Streets in what is now the center of Cincinnati, where trading is facilitated by notes backed by a promise to do work.. "All goods offered for sale at Warren's stores are offered at the same price paid by the merchant himself, plus a little extra cost, at about 4 to 7 percent, to cover the store overhead costs." The shop remains open for three years; once closed, Warren can pursue the formation of colonies based on mutualism. These include "Utopia" and "Modern Times". Warren says that Stephen Pearl Andrews' The Science of Society, published in 1852, is the clearest and most complete exposition of Warren's theories himself.
Mutualism is an economic and anarchist theory of thought that advocates a society in which everyone may have a means of production, either individually or collectively, with trade representing equal labor in the free market. An integral part of this scheme is the establishment of a joint bank that will lend to producers with minimal interest rates, high enough to cover administration. Mutualism is based on the theory of value of labor which states that when labor or its products are sold, instead, it must receive goods or services that embody "the amount of work necessary to produce a truly similar and equally utilitarian article". Mutualism comes from the writings of the philosopher Pierre-Joseph Proudhon.
Collectivist anarchism as defended by Mikhail Bakunin defends a form of value theory of work when advocating a system in which "all the necessities for production are shared by a group of workers and free communes... on the basis of the distribution of goods according to the contribution of labor".
Karl Marx
Contrary to popular belief, Marx never used the term "Labor's value theory" in his works but used the term Law of value, Marx opposed "to consider the supernatural creative force to work", for that reason:
- Work is not the source of all wealth. Nature is also a source of value for use (and of course material wealth!) As labor, which is itself only a manifestation of the forces of nature, human labor.
Here, Marx distinguishes between exchange rate (LTV subject) and use value. Marx uses the concept of "socially necessary time work" to introduce a social perspective different from his predecessor and neoclassical economy. While most economists start with an individual perspective, Marx begins with an overall community perspective . "Social production" involves a complex and interrelated division of labor from the various people who depend on each other for their survival and prosperity. "Abstract" work refers to the characteristics of labor producing commodities owned by various types of heterogeneous (concrete) work. That is, the abstract concept of the special characteristics of all work and is similar to the average workforce.
The "socially needed" work refers to the quantity needed to produce a commodity "in a given society, under certain conditions or social production, with a certain social average intensity, and the average skill of the employed employee." That is, the value of a product is determined more by community standards than by individual circumstances. This explains why technological breakthroughs reduce commodity prices and make less-developed producers out of business. Finally, it is not the labor that creates value, but the labor sold by free wage workers to the capitalists. Another difference that must be made is that between productive and non-productive work. Only wage workers from productive economic sectors produce value.
Criticism
Marxist labor values ​​theory has been criticized on several points. Some argue that it predicts that profits will be higher in labor-intensive industries than in capital-intensive industries, which would contradict the measurable empirical data inherent in quantitative analysis. Even if Marx never 'mechanically' simplifies this problem in these terms, since capital itself is the product of the labor of the past, the 'general tendency of falling profits' does not concern or abort the origin of work value, present both in life and in labor (capital) (cf chapters 1 and 24 of Capital). This is sometimes referred to as the "Great Contradiction". In volume 3 of Capital, Marx explains why profits are not distributed according to which industry is the most labor intensive and why this is consistent with his theory. Whether this is consistent with the theory of work values ​​as presented in volume 1 has been a topic of debate. According to Marx, more value is extracted by the capitalist class as a whole and then distributed according to the total amount of capital, not just the variable component. In the example given earlier, making a cup of coffee, the constant capital involved in production is the coffee bean itself, and the variable capital is the value added by the coffee maker. The value added by the coffee maker depends on its technological capabilities, and the coffee maker can only add so much total value to the coffee cup over its lifetime. The amount of value added to the product thus is the amortization of the value of the coffee maker. We may also note that not all products have the same proportion of value added as the amortized capital. Capital-intensive industries such as finance may have large capital contributions, while labor-intensive industries such as traditional agriculture will have relatively small industries.
This theory can sometimes be found in non-Marxist traditions. For example, Marianist anarchist theorist Kevin Carson Studies in Political Economy Mutualist opened with an attempt to integrate marginalist critiques into the labor theory of value.
Some Post-Keynesian economists are very critical of the value theory of work. Joan Robinson, himself considered an expert in Karl Marx's writings, writes that the theory of value of work is largely tautology and "a typical example of the way metaphysical ideas operate".
Others argue that the value theory of work, especially one that appears in Karl Marx's work, is due to the failure to recognize the dialectical basic nature of how humans attribute value to objects. Pilkington writes that values ​​are associated with objects based on our desires for them and that these desires are always inter-subjective and socially determined. He writes as follows:
[V] alue is associated with objects because of our desire for them. This desire, in turn, is inter-subjective. We want to get [a] a medal or to capture [enemy] flag [in battle] because it will win recognition in the eyes of our colleagues. The flag [a] medal [or enemy] is not appreciated for its objective nature, nor is it valued for the amount of work embodied therein, but is desirable for the symbolic position they occupy in a network of interpersonal desires.
Pilkington insists that this is a very different value concept than we find in the marginalist theory found in many economic textbooks. He writes that "actors in marginal analysis have an independent preference, they have no inter-subjective desires".
In an ecological economy, the value theory of work has been criticized, in which it argues that labor is actually energy over time. However, echoing Joan Robinson, Alf Hornborg, an environmental historian, argues that both dependence on "energy value theory" and "value theory of work" are problematic because they propose that usability (or material wealth) is more "real" than exchange value (or cultural wealth) - however, use values ​​are culturally determined. For Hornborg, any Marxist argument that claims an unequal wealth is due to "exploitation" or "under-payment" of value-wear is actually a tautological contradiction, since it has to measure the "under-payment" in terms of exchange rates. The alternative is to conceptualize unequal exchanges as "asymmetric net transfer of material inputs in production (eg, labor, energy, land, and water), rather than in the case of a lack of payment of material input or asymmetric transfer of 'value'". In other words, an unbalanced exchange is characterized by incomparable, namely: the transfer of unequal input materials; competing value-judgments of the value of labor, fuel, and raw materials; availability of different industrial technologies; and unencumbered environmental loads on those with fewer resources.
Generalize
To resolve the above-mentioned contradictions of theory with reality, some authors propose to reconsider the role of production equipment (constant capital) in the production of values, following the instructions in Capital Dot , in which Marx describes the functional role of machines in the process production in Chapter XV (Machinery and Modern Industry) in the following words:
On closer inspection of the precise machining work, we find in it, as a general rule, although often, undoubtedly, under a highly altered form, tools and tools used by craftsmen or manufacturing workers: with this distinction that as human tools, they are tools of mechanisms, or mechanical devices (pp. 181-182). The right machine is a mechanism that, after being driven to work with the same operating devices previously performed by workers with the same device. Whether motive power comes from humans or from some other machine, there is no difference in this (p.182). Birthing tools, in the form of machines, require the substitution of the forces of nature for human strength, and the conscious application of science, not the rule of thumb (p. 188). After making the allowance, both in terms of machines and tools, for their average daily cost, that is, for the value they send to the product with average daily use, and for the consumption of additives such as oil, coal and so on, they are each doing a haphazard job, just like the power given by nature without human help (pp. 189).
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