As wikipedia says, "modern mainstream economics rejects the LTV" (for very good reasons). It leads to some pretty obvious absurdities if you take it seriously. For example, 10,000 people digging holes should be more "valuable" than one guy designing a microchip, because hey! The holes take more labor.
Nice try, but getting 10,000 people to dig holes (e.g. gigantic infrastructure projects) ends up costing much more than what it takes for "one guy" to "design a microchip"
Sure, it costs more, and everyone agrees on that. Where we disagree is whether it provides more VALUE. The LTV says that it does by definition, because labor = value, and therefore more labor = more value.
You may choose to disagree. Just as modern economists disagree with the LTV.
This is a common misinterpretation of the labor theory of value. I understand it like this:
I am a capitalist and my money goes to pay labor to create a thing that I sell in a market. The workers create thing in the production process. I have captured a portion of the labor's true value based on the market, bringing me profit - what Marx called "surplus value."
I turn around and reinvest that profit into another business that brings me more profit. Rinse and repeat, forever.
But that profit is nothing but a portion of the labor's true value as reflected in the market price, and therefore the labor created the value. The market did not create the value. The market decided on a price to pay for the value created by the labor.
Much like "machines all the way down", value is labor all the way down.
It would be more accurate to say "modern mainstream economists". To say "economics" here is a real failure on Wikipedia's moderation. Because what they're actually talking about, is the Austrian School of Economics [1]:
> The Austrian school is a heterodox[1][2][3] school of economic thought that advocates strict adherence to methodological individualism,
"Individualism" is the key part here because it betrays the intent, which is to disempower people from acting collectively, such as by forming unions. This is a key tenet of classical liberalism so an appeal to authority like "modern mainstream economics" we're really just saying "neoliberalism".
Neoliberalism isn't a neutral account or critique of capitalism. It wholly embraces capitalism as a solution to all problems. Neoliberalism can pretty much be summed up as weaker/smaller government (because it hurts profits) and indivudalism (because collective action hurts profits).
> 10,000 people digging holes should be more "valuable" than one guy designing a microchip
That's an asinine example. I mean what hole are they digging? If it's the Panama Canal, that's pretty valuable. Also, the example of one person designing a chip goes to the heart of the problem that LTV addressses. What does that design do? Well, nothing. It only has value if you make something with it you can sell (or you sell it to someone who does). You want to fab it? Well, TSMC involves a lot of labor. ASML involves a lot of labor. The materials required require a lot of labor.
Plus there's the issue that the chip design itself is intellectual property, which itself is an enclosure (in the capitalist sense).
Everything we as a society is so fundamentally interconnected that it's arbitrary and selective to attribute the value created to a tiny few. And it's done for the gain of the few at the expense of the many.
Look. The LTV has been rejected by mainstream economists. And this has nothing to do with Austrian economics (which has also been rejected by mainstream economists, for different reasons.) Now of course, you may choose to disagree, and say they're all wrong! But that's the current academic consensus.
That's an asinine example. I mean what hole are they digging? If it's
the Panama Canal, that's pretty valuable.
It might be more valuable if they used construction equipment to dig it, rather than shovels. But that would mean acknowledging that "value" is different from "labor cost," which apparently is impossible for you.
He's a Marxist and believes in Marx's labor theory of value.
https://en.wikipedia.org/wiki/Labor_theory_of_value
As wikipedia says, "modern mainstream economics rejects the LTV" (for very good reasons). It leads to some pretty obvious absurdities if you take it seriously. For example, 10,000 people digging holes should be more "valuable" than one guy designing a microchip, because hey! The holes take more labor.
Nice try, but getting 10,000 people to dig holes (e.g. gigantic infrastructure projects) ends up costing much more than what it takes for "one guy" to "design a microchip"
Sure, it costs more, and everyone agrees on that. Where we disagree is whether it provides more VALUE. The LTV says that it does by definition, because labor = value, and therefore more labor = more value.
You may choose to disagree. Just as modern economists disagree with the LTV.
7 replies →
This is a common misinterpretation of the labor theory of value. I understand it like this:
I am a capitalist and my money goes to pay labor to create a thing that I sell in a market. The workers create thing in the production process. I have captured a portion of the labor's true value based on the market, bringing me profit - what Marx called "surplus value."
I turn around and reinvest that profit into another business that brings me more profit. Rinse and repeat, forever.
But that profit is nothing but a portion of the labor's true value as reflected in the market price, and therefore the labor created the value. The market did not create the value. The market decided on a price to pay for the value created by the labor.
Much like "machines all the way down", value is labor all the way down.
That seems awfully.. tautological.
4 replies →
> "modern mainstream economics ..."
It would be more accurate to say "modern mainstream economists". To say "economics" here is a real failure on Wikipedia's moderation. Because what they're actually talking about, is the Austrian School of Economics [1]:
> The Austrian school is a heterodox[1][2][3] school of economic thought that advocates strict adherence to methodological individualism,
"Individualism" is the key part here because it betrays the intent, which is to disempower people from acting collectively, such as by forming unions. This is a key tenet of classical liberalism so an appeal to authority like "modern mainstream economics" we're really just saying "neoliberalism".
Neoliberalism isn't a neutral account or critique of capitalism. It wholly embraces capitalism as a solution to all problems. Neoliberalism can pretty much be summed up as weaker/smaller government (because it hurts profits) and indivudalism (because collective action hurts profits).
> 10,000 people digging holes should be more "valuable" than one guy designing a microchip
That's an asinine example. I mean what hole are they digging? If it's the Panama Canal, that's pretty valuable. Also, the example of one person designing a chip goes to the heart of the problem that LTV addressses. What does that design do? Well, nothing. It only has value if you make something with it you can sell (or you sell it to someone who does). You want to fab it? Well, TSMC involves a lot of labor. ASML involves a lot of labor. The materials required require a lot of labor.
Plus there's the issue that the chip design itself is intellectual property, which itself is an enclosure (in the capitalist sense).
Everything we as a society is so fundamentally interconnected that it's arbitrary and selective to attribute the value created to a tiny few. And it's done for the gain of the few at the expense of the many.
[1]: https://en.wikipedia.org/wiki/Austrian_school_of_economics
Look. The LTV has been rejected by mainstream economists. And this has nothing to do with Austrian economics (which has also been rejected by mainstream economists, for different reasons.) Now of course, you may choose to disagree, and say they're all wrong! But that's the current academic consensus.
It might be more valuable if they used construction equipment to dig it, rather than shovels. But that would mean acknowledging that "value" is different from "labor cost," which apparently is impossible for you.
1 reply →
Your "holes" example is a distortion (simplification and misinterpretation) of Marx's theory.
And it's the same idiotic one that comes up every single time. "MUDPIES CHECKMATE!!"
Nevermind Marx accounted for demand and markets when talking about cost of labor, but people love to strawman.
Not only is it serious, it’s the central argument of all political systems since there have been political systems.