Talk:Labor theory of value/Archive 1

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Archive 1

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First comments

Can anyone say where the "93 percent" reference comes from? Did Ricardo use this language? If so, where?

Thanks, K McG

The 93% reference comes from a famous article by George Sigler (Stigler, George J. (1958) “Ricardo and the 93 Per Cent Labor Theory of Value” American Economic Review 48). Stigler is highlighting the fact that Ricardo argues that changes in interest rates can affect the value of commodities, but only by less than 7%. Thus, Ricardo had a 93% labor theory of value. Hope that helps. I agree with the comments below that this article is too obtuse and unintelligible. Also, the focus on Marxism neglects important historical considerations of the developement of value theory from Smith and Ricardo to modern neoclassical economists, especially Alfred Marshall. Appendix I of Marshall's Principles of Economics has an extended treatment partially reconciling Ricardo's labor theory of value with his own utility theory of value. This appendix is highly readable and interesting. This wikipedia article, on the other hand, has a long way to go. I commend those working on this project. Dan Lesh 05:14, 13 December 2005 (UTC)

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Some practical examples of LTV in the real world would help. Historical examples of systems implementing this theory, and the economic effects that followed.

20 Mar 2005

in the interpretation that I expressed in the last section of the entry, there is no simple practical example, unlike the usual "labor theory of price." The latter theory works pretty well for dynamics, by the way: relative prices will usually track the relative labor content of the respective commodities.

No known economic system follows my interpretation. It's a method of understanding a commodity-producing society more than anything else.

If people insist, I could elaborate on my interpretation more. The price of a commodity is akin to its "private cost" while its value is akin to its "social cost." In neoclassical economics, the contrast between private and social costs is called an "externality." In Marxian political economy, the contrast helps explain exploitation, economic crises, and change. Jim 22:13, Mar 22, 2005 (UTC)

This article is almost impossible to understand for the layman. For example, how does the use of technology increase the value of a product? The article states this because it says that the labor used to produce the technology must be included in the value of the end product. Ok, but what if the total amount of labor used to produce the technology is less than the amount of labor that is saved by using the technology (think computers). Doesn't that DECREASE the value of the product?

Also, how can 1 hour of work to produce something always equal 1 hour of work to buy something? Aren't some worker's hours more productive than others? What about specialists whose training allows them to do a particular job, while an unskilled worker could not perform that task?

I'm sure that Marxism addresses these issues, but this article however, does not. Please change it to use less Marxist terminology, and come up with examples that describe how the theory works in a way that peoeple without experience in Marxist economics can understand.

In defense of all the talk of Marxism, only Marxist today believe in this theory, and hence, the only reason to understand is if you need to understand Marxism. :) Regebro 20:16, 26 Sep 2004 (UTC)

It is not necessary to understand Marxism to understand the basis of the theory, so the talk of Marxism does cloud the explanation. The use of technology does decrease the value of the product (as labour is more productive) - assuming that the tools etc are not significantly used up in the production of the goods. For example, machine made clothing is cheaper than hand made. I have deleted the passage which caused this confusion. --Jack Upland 03:29, 1 December 2005 (UTC)

Is "intrinsicism" economics jargon? See http://www.dictionary.com/cgi-bin/dict.pl?term=intrinsicist

I have never heard the word from anyone other than followers of Ayn Rand. --LMS

The word appears, but rarely, in the philosophical literature, I think.

Two examples I found on the web:

http://www.utm.edu/research/iep/j/justwar.htm

http://www.utm.edu/research/iep/i/interven.htm

However, the correct jargon here is 'intrinsic value theory', so I changed it.

Other examples of 'intrinsic value theory', besides the labor theory of value, would include various forms of environmentalism, and at least one theory (not of any repute, I think, but I did read it somewhere) that the 'real' value of any thing is the amount of energy it took to produce it.

The historical materialism page has a better explanation of the labor theory of value than the labor theory of value article, it seems. Ed Poor

That page has no explanation of the Labor theory at all; I have no idea what you're talking about. --LDC

Some mention ought to be made of Marx's use of his theory of surplus value, which he derivied from his version of the labor theory of value, in justifying violent revolution. Marx spoke of "capitalist guilt" and justified revolution of the working class against the "ruling class" of capitalists, on the grounds that capitalists were stealing the value of workers' labor. Marx ascribed no value to capital, technology, innovation, leadership, etc., but claimed that 100% of each worker's production belonged to the worker: any surplus resulting from, say, a factory selling the fruits of his labor is the precise moral equivalent of theft. Ed Poor

Ed, Marx did ascribe value to capital. According to Marx, the value of capital is the amount of labor required to produce it. Nor did he argue, AFAIK, that managers, entrepeneurs, innovators, etc. did no useful work, or didn't deserve any pay. As I understand it (and I warn you I have never read much Marx--Das Capital was too boring), his argument was simply that they were being paid a lot more than they deserved to be--that one hours work as a manager deserved no more pay than one hours work on the factory floor, not the tens or hundreds of times more pay that managers get in practice. -- SJK

I was interested by Ricardo's reductio ad absurdum argument given in the article.

The argument certainly seems logically correct, but I think the conclusion drawn is too sweeping. I would have thought a better conclusion would to be: for the labor theory of value to hold, the rate of profit should be zero. My understanding of, say, Marx is that he believed the rate of profit would indeed tend to zero, leading to his 'crises of capitalism'.

I'm not much of an expert at all on this, which is why I haven't changed the page, but I think this aspect of the argument deserves looking at. Enchanter

awhile back, I added the stuff about when prices directly correspond to value (the simple labor theory of price). One case is where the rate of profit equals zero.

I think that Marx may have seen prices not equalling values as a temporary situation and that in the end (when capitalism goes away), they will be equal. But I'm not very sure he believed that, so I've left it out. Jdevine 17:42, 28 Aug 2004 (UTC)

No, that is not what Marx believed - in fact the LTV applies to a market economy not to socialism. Marx's argument is not that profit is theoretically impossible, nor that it is obtained by raising prices over the labour value - rather that it is created by exploiting workers and paying them less than the product of their labour. I can't believe these obvious things need to be pointed out.--Jack Upland 04:22, 22 December 2005 (UTC)

you're right that the LTV doesn't apply to socialism in Marx (unlike for Stalin). The idea was that if the rate of profit fell to zero, so that there is a direct correspondence between values and prices of production would be either a step away from capitalist recovery (as accumulation grinds to a halt, unemployment soars, and wages collapse relative to labor productivity, so that the profit rate can rise again, as in ch. 25 of vol. I of CAPITAL) OR capitalism simply dies. Socialism need not result. Barbarism might.

The "LTV" applies under capitalism (a class-dominated kind of "market economy," or what Marx termed "commodity production"). But the equality of values to prices of production (PsOP) does not, except under very specific conditions (equal composition of capital between sectors, etc.) If Marx thought that values = PsOP under capitalism, he would have said so (rather than assuming so). In volume III, he analyzes the distinction, while in volumes I and II, he operates at a very high level of abstraction that ignores technical differences between sectors. If Marx thought that values = PsOP, his concept of the the fetishism of commodities (section 4 of ch. 1 of vol. I) would make very limited sense: class relations would not be hidden (their appearance distorted) by commodity relations, prices, supply & demand, etc. Jim Devine Jim 16:28, 17 January 2006 (UTC)

According to Marx, the profit rate falls because of our old friend, the organic composition of capital - a lack of 'living labour' in production overall. Not a value/price distinction. And I don't see the relation of this distinction to the fetishism of commodities - which Marx says is 'because the relation of producers to the sum total of their own labour is presented to them as a social relation, existing not between themselves, but between the products of their labour' (Vol 1 ch 1).--Jack Upland 05:58, 21 January 2006 (UTC)

The example given probably isn't the best refutation, since you correctly point out that it fails when profit is zero. But there are many, many, other reasons why the labor theory of value fails and is no longer taken seriously by any economist, not the least of which is the obvious superiority of economic subjectivism in producing models that actually work. --LDC

It's important to define what is meant by "the labor theory of values fail[ing]." In my additions to this entry, I distinguished between two different types of "labor theory of value" -- which imply two different kinds of "failure". I would agree that the "labor theory of value" fails as a theory of price (the labor theory of price) and I think Marx would agree, since he wasn't very interested in price theory (leaving it to volume III). I don't think he saw it as failing as a theory of society, however. That's the "alternative theory." Jdevine 17:42, 28 Aug 2004 (UTC)

additional points: saying that the LTV "is no longer taken seriously by any economist" is not only factually wrong (since _some_ economists take it seriously, e.g., moi) but also is a simple application of the fallacious democratic theory of truth. Just because a (vast) majority think that the emporer has clothes on doesn't mean that he actually does. Perhaps we should apply a "market theory of truth," in which unpopular theories (e.g., Marxian political economy and "Austrian" economics) are not excluded automatically by ideological fiat but are instead allowed to compete in the "marketplace of ideas." Since the market analogy is poor, this what people nowadays refer to as "theoretical pluralism" in economics.

"the obvious superiority of "economic subjectivism" is only part of a theory of supply and demand. Marx never rejected supply and demand, so economic subjectivism plays a role in his theory (rather than replacing it). Instead, he saw supply and demand as much less important than understanding the big picture -- the totality -- of capitalism as a society. It is that which helps determine the subjective wants that lie behind demand and to a lesser extent, supply.

A century ago, the AustroMarxist Rudolf Hilferding limned the distinction between "economic subjectivism" and Marxian political economy when it came to issues of value. The former simply looks at micro issues from a micro point of view, whereas the latter in addition looks at them from the macro (societal) perspective, putting them into context. Jim Devine Jim 16:28, 17 January 2006 (UTC)

The bizarre thing is that the LTV is the most attacked but most unassailable element of Marxism. Attacks against it are based on (a) misrepresentation, or (b) dogmatism (i.e. assuming the theory is wrong and calling this a 'failure').--Jack Upland 04:22, 22 December 2005 (UTC)

Profit is non-zero in the real world. Is this because profit corresponds to the interest paid on invested capital? Let's see... to give an analogy between equity and debt, an investor in effect "loans" a company capital, and the company pays "interest" for the use of the capital in the form of profit.

Or am I (as usual with respect to the social sciences) talking out of my rectum? --Damian Yerrick

Marx was trying to explain why profit -- or rather "normal" profit -- was non-zero in the real world. He was trying to explain, among other things, why interest was positive, non-zero. He looked a structural explanation, the exploitation of labor. Because workers work beyond the time necessary to pay the cost of their wages, there is positive profit (surplus-value). Jdevine 17:42, 28 Aug 2004 (UTC)

additional point: for Marx, surplus-value (profit in general) includes not just interest but also industrial profit and scarcity rents on natural resources ("land"). Much also shows up as part of the exalted salaries (and benefits) of capitalist managers. Depending on your theory, some of it may show up as taxes (net of benefits) received by the state, though that's very controversial. Jim Devine Jim 16:28, 17 January 2006 (UTC)

At the top of this page, I'm told that LTV is "obsolete". Since many people all over the world are still using LTV in their analysis of political economy, I thought that this was not a neutral point of view, so I editted that word out. The end of the first paragraph says "Much of Western economics turned away in the 1870s from theories of objective value and towards the economic subjectivism associated with the development of neoclassical economics". This conveys that better, that in certain places (the West) at a certain point (in the 1870s), LTV and like theories became more of a minority opinion in the economic discourse of economic specialists. In other words, it says some people think it is obsolete, which is a neutral statement, instead of saying that it is obsolete, which is not neutral.

I also felt that saying it was used to justify private property was too specific a statement. Marx certainly didn't think so! So I made that statement more vague, that it was used to justify attitudes towards property relations. The next statement restates Locke's private property justification anyhow.

I will probably be revisiting this page and doing further edits. I think the way to remain neutral is less to take a side of an economist on the "definitive" truth about the LTV, but to simply state what they say. Here is what Locke thought, here is what Ricardo thought, here is what Marx thought, here is what Eugen von Böhm-Bawerk thought, and so forth. --Lancemurdoch

I have tweaked how marxian value theory had been treated unequivocally as a subset of classical labor theories of value. This treatment is certainly the majority view, probably among marxists as well as their critics, but is nonetheless contested. My revisions permit the possibility of the minority view.

Summary: By some accounts, marxian value theory does not locate value-formation at the level of concrete labour-time units, but as an abstract social relationship. Marx explicitly establishes 'socially-necessary labour time', - not 'labour time' itself - as the unit he believes he is studying in Capital I, and rejects Ricardian definitions of labour values for failing to account for this particular socialised *form* of production. His discussion of 'forms' is somewhat Hegelian in character, and perhaps for this reason has largely been ignored in the work of Sweezy, Bortciewicz and other 'transformation problem' critics.

While there, I also tidied up some of the 'ratio' stuff which seemed slightly muddled and inaccessible.

- Adhib

Marx's view of socially necessary labour time is intended to deal with the issue of lazier/less productive workers (as discussed in the article - see Marx's Value, Price and Profit for a simple explanation). By all means invent your own theories but don't pretend they are Marx's!!!!--Jack Upland 03:29, 1 December 2005 (UTC)

Adhib didn't invent this theory. It's one of the major Marxian interpretations of the LTV, one that rejects the neo-Ricardian "labor theory of price." The bit about socially necessary labor time concerns much more than lazier workers, as seen in CAPITAL, vol. I. Jim 16:52, 17 January 2006 (UTC)

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I find this comment in the article a bit puzzling: "Strangely, Locke mentions the hiring of "servants" by the landowner without wondering why some or all of the product of their labor belongs to them rather than to the landowner."

Clearly, the hired servants are being paid wages in exchange for the fruits of their labor. Seems quite obvious to me.

Locke presumes private property already exists. If the servant mixes his labor with Locke's property, why doesn't it become the servant's? Now you may have an obvious answer, but Locke seems not to have thought about it at all. (He was not a deep thinker, unlike, say, Thomas Hobbes.) Jdevine 16:56, 29 Jul 2004 (UTC)

Adhib added the following to this entry: "According to some commentators, this modification is profound enough to support the claim that Marx's theory is not, after all, a labor theory of value, but a new type of value theory entirely. Marx goes to some lengths in the first chapter of Capital to spell out the significance of three aspects of value - its substance, magnitude, and most misleading of all, its form. His theory would therefore seem resistant, at least, to reduction to just one such aspect, the magnitude, typically thought of as a number of labor hours."

Is it possible to explain this a bit more, linking it up with the rest of the entry? Jdevine 16:56, 29 Jul 2004 (UTC)

Have done a bit more work there. Does that help, or complicate?! Adhib 19:02, 15 Sep 2004 (UTC)

Some simpler critiques

Okay, some less involved but just as sharp critiques.

"Dig a hole, fill it in again, where's the value" -- defeats naive version of the theory.

"Only socially necessary work counts, socially necessary work is work that produces value, so value-producing work produces value?" -- defeats the the fancier form by reducing it to a meaningless circularity.

Comment: there _is_ a circularity to Marx's conceptions. Much of his "theory of value" might be seen as a tautologically-true accounting framework. However, economists have always seen such frameworks as useful. (And tautology is very common in economics: utility maximization seems to be tautologically true.) But given Marx's historical materialism, his choice of which tautologies to use makes sense. In the end, it's how one uses tautologies that justifies (or doesn't justify) their use. Jdevine 17:13, 25 Aug 2004 (UTC)

The problem is justifying a revolution on grounds that are circular. If I'm going to take to the barricades, I'd like a better reason for doing so than anything of the form, "a is true because of b, and b is so because of a." Furthermore, offering such circularity as a reason for, say, liquidating the kulaks is worse that a logical flaw. It is a moral flaw. --Christofurio 15:02, Aug 28, 2004 (UTC)

I believe that Marx's justification of revolution wasn't logical as much as empirical. His theory was aimed at helping people understand empirical reality. Even if the "labor theory of value" had been "logical" in the Aristotelian sense of the word (which it wasn't and wasn't meant to be), it wouldn't have justified anything revolutionary or otherwise. The validity of this kind of (deductive) theory depends on the empirical validity of its premises and implications.

In any event, the point of the entry is to portray the concepts as clearly and rationally as possible rather than rejecting or accepting them. It's up to the reader to make the latter kind of decision. Jdevine 17:42, 28 Aug 2004 (UTC)

Marx of course would have regarded the notion that his theories have nothing to do with justifying revolution as the harshest of criticisms, not as explication. ("...the point, however, is to change it.") But let's talk about utility maximization, which you clearly regard as an analogous tautology.

The idea as the Austrians understood it was to watch the margins. If I have five beers this evening, the first will be veeeery refreshing. The second probably won't taste as fully satisfying as the first, and the fifth (or so!) will have a marginal utility of zero. So that's where I'll stop drinking. Now, it is open to you to say that this is a tautology -- "you'll stop drinking when the next beer no longer tempts your appetite? Tautology!" -- yet there is an empirical nub to it. The idea is built upon general psychological and indeed physiological facts about the fact of satiation. IMHO its not as empty as the LTV, if the latter is interpreted so as to be irrelevant to real-world prices. I'm not making an argument for changing the entry, BTW, just pursuing the "simple critiques" suggested here by one of our fellow editors. --Christofurio 20:53, Aug 28, 2004 (UTC)

>>>>> It's not that "his theories have nothing to do with justifying revolution". Rather, the theories are merely helpful. It's the capitalist _reality_ that Marx objected to. The theories help understanding of that reality.

>>>>> the marginalist theory you apply doesn't say anything about the crucial physiological and psychological facts behind your choice. Because of that, it's empirically empty. In fact, the only way economists can tell what makes you happy is to look at what you actually consume (what's called the theory of revealed preference), which makes the theory circular, tautological.

>>>>> BTW, the marginal theory assumes among other things that your tastes don't change, which of course they do since you're drinking so much. If tastes are allowed to change, then the marginal utility theory predicts absolutely nothing. Absolutely any behavior can be explained after the fact. Jdevine 21:04, 28 Aug 2004 (UTC)

I think this is a mischaracterization, but I won't pursue it here. A more appropriate venue is the entry on marginal utility, where I see you've already done some work. See you there soon!--Christofurio 18:31, Aug 29, 2004 (UTC)

>>>>> I start teaching again tomorrow. I'm bowing out, except sometimes on weekends and evenings. Jdevine 00:51, 30 Aug 2004 (UTC)

"A man works for an hour purifying drinking water. What is its value to a man stranded in a desert? What is its value to a man stranded in a flood?" -- attacks the idea of value independent of context.

Comment: this refers to "use-value," which differs from Marx's concept of value or exchange-value. But it's true that the (Marxian) value of a commodity does vary with context. One context where it doesn't apply is outside of society, i.e., when dealing with an isolated human. Marx's theory is one of society, specifically commodity-producing society. Jdevine 17:13, 25 Aug 2004 (UTC)

"I have a dollar, you have a loaf, the price tag says $1. If their value was the same to me, why would I bother to buy? If their value was the same to you, why would you bother to sell?" -- attacks the notion of a single value independent of the valuer, and hence the notion of price == value. The countercase ("I value the loaf more, you value the dollar more, so we trade") shows that both parties make a subjective profit on any free transaction, and therefore "profit exploitation" is bunk.

Comment: In my "alternative" view, the idea that individual price = individual value is rejected. That is, Marx's "labor theory of value" isn't a "labor theory of price." Jdevine 17:13, 25 Aug 2004 (UTC)

Interesting points. What do you think of the example of a cask of wine? I've discussed it in my article on John Ramsey McCulloch. --Christofurio 15:22, Aug 23, 2004 (UTC)

Summary of the wine question: "wine put aside increases in value, from whence came the increase?"

My answer: people simply prefer the older wine, and are thus prepared to pay more for it (relative to the prices of other things). This is illustrated by "snob value", where it takes a pro to even notice the slight flavor improvement.

As to the question of the guy who sets aside the wine, where does his profit come from? From the entrepreneurial activity of finding ways to improve things (in the opinion of others) and thus increase their resale price.

So wine improving by itself is an example of the subjectivity of value, and our investor in improved wine demonstrates that profit is genuine ex nihilo wealth creation (where "wealth" means: aggregate subjective quality-of-life).

Comment: the aging of wine refers to the creation of "use value," not value in Marx's sense of the word. But Marx didn't deny the role of entrepreneurs. A businessperson who introduces a lower-cost method of production gets a higher profit than do the others (Marx's example in volume I of CAPITAL). Similarly, introducing a new product might give someone a high profit. Marx's point, however, is that when looked at from the point of view of society as a whole, in order for anyone to get any profit at any given point in time, some workers have to work beyond the labor-cost of their labor-power. Jdevine 17:13, 25 Aug 2004 (UTC)

That point isn't established unless the LTV has some non-tautological significance, and the example of wine is one of many that indicates it doesn't. --Christofurio 15:02, Aug 28, 2004 (UTC)

Even if the "LTV" has a lot of non-tautological concepts (as neoclassical economics has its tautological concept of utility maximization), that doesn't mean that it has only non-tautological significance. The system of National Income and Product Accounts in macroeconomics is tautological (definitional), as is all accounting. But that doesn't mean that these have nothing but tautological significance. Jdevine 17:42, 28 Aug 2004 (UTC)

It has non-tautological significance if it has some value in understanding price movements. Otherwise, it may be a moral imperative introduced into economics from outside. I suspect that Marx himself wasn't sure which. --Christofurio 20:53, Aug 28, 2004 (UTC)

>>>>> The "moral imperative does come from Marx's sense of ethics (which he didn't develop, since he wasn't an ethician). His major ethical view in CAPITAL concerned the contrast between theory and practice. While the "bourgeois political economists" said capitalism was a realm of equality and freedom, Marx pointed to the reality of inequality (in distribution and power) and unfreedom (in production). In effect, instead of developing a full moral critique, Marx lambasted the economic thinkers of his day for hypocrisy. Jdevine 00:51, 30 Aug 2004 (UTC)

Going back to the original point that "socially necessary labour" equals labour that creates value and hence LTV is a tautology, this is a misrepresentation of Marx. Unfortunate though it may seem, some people who discuss Marx might actually need to read (!) what he said. The meaning of "socially necessary labour" is not "socially valuable labour" but the "quantity of labour necessary for its production in a given state of society" to use Marx's words in Value, Price, and Profit (Part VI) - i.e. a lazy or technologically equipped worker is not creating more economic value! In the same passage, Marx makes it clear he is talking about commodities which are sold. To say that a car (automobile) is more expensive than a pencil because of the relative quantities of labour involved may be wrong but it is NOT tautological!--Jack Upland 05:22, 31 December 2005 (UTC)

On the aging wine, there is labour involved (remember, we're considering a commercial operation): labour in building and maintaining the cellar, labour in R&D etc. This cost must be recouped through the sale of individual casks. And as we are talking about price, this is a case of exchange value not use value (as Jdevine stated). Relatedly, does Christofurio know of a bar where the price of beer falls the more you drink??! Lastly, with the loaf of bread and the $1 bill - this example actually implies the loaf is not worth its price, which is nonsensical! Here we have a difference in use value between the transactees - but of course there is no difference in exchange value!--Jack Upland 06:09, 31 December 2005 (UTC)

BTW, the issue of wine "growing more valuable (i.e., pricier) with age" involves natural scarcity rents, which are part of Marx's theory. Just as the price of land reflects not just supply but demand in his theory, the price of wine may easily exceed its value (the labor used to create it). In Marx's view, that scarcity rent represents a societal redistribution from industrial profit (just as interest does). The surplus-value is produced by labor (including winery labor) but the property income actually realized by the individual wine entrepreneur (wino?) depends on scarcity and demand. Jim 16:52, 17 January 2006 (UTC)

does Christofurio know of a bar where the price of beer falls the more you drink??! Well, I do. It's called "buying by the pitcher". radek 03:08, 17 January 2006 (UTC)

The example given implied that each sucessive glass was cheaper, not that he got a discount for buying in bulk. A discount reflects the seller's desire to increase sales, not the buyer's decreasing demand.--Jack Upland 04:18, 17 January 2006 (UTC)

PS Christofurio's comment (28/8/04) that LTV seeks to explain "price movements" is false - it is rather relative price differences between commodities.--Jack Upland 04:03, 3 January 2006 (UTC)

I certainly didn't mean to say that each successive glass would be cheaper -- though such a situation might arise in a single-customer bar. Overhead being what it is, I doubt such a bar would stay in business long, even if Foster Brooks were the one customer. With more than one customer, a bar attempting such a policy would ace the usual difficulties of price discrimination -- difficulties which the Austrians regard as outside of value theory. In general, I keep drinking until the price is higher than the marginal value of the next beer, at which point I stop and the aggregate demand for those beers falls (unless some other fresher drinker has just walked in) by virtue of my absense from the market. If things work out well, there isn't a net fall in aggregate demand until about 15 minutes before closing time. And why are you so sure that the prctice of selling cheaper in bulk has nothing to do with the anticipated drop in demand? Obviously, it also involves the tavern's desire to unload its supply, but remember that both blades on the scissor are involved in making the cut. --Christofurio 16:48, 18 February 2006 (UTC)

What your comment amply demonstrates is that marginalism is not true in practice, not based on reality. I understand the theory - and as stated ad nauseum LTV does not deny the supply/demand mechanism, only that it determines equilibrium prices. With regard to buying in bulk, substitute toilet paper for beer. Is a large pack of rolls cheaper because the 'satisfaction' of using toilet paper declines over time? No, it's because that the 'value' of the product - however understood - is useless to the retailer unless it's sold. Hence bulk sales are discounted on the 'bird in the hand' principle.--Jack Upland 01:38, 19 February 2006 (UTC)

The satisfaction of using toilet paper doesn't decline over time because each use is a different event. Whereas a single night's beer drinking can be treated as a single event from the point of view of satiation. You "substitute" a case that involves total utility with one that involves marginal utility when you make that move -- in other words, you change the subject, and your attempt at making a point fails. It isn't a matter of theory versus practice unless you get the theory right, and your substitution indicates you haven't. If I buy a pitcher of beer at a bar, it isn't because I intend to take it home and drink some of it the following weekend. --Christofurio 16:31, 19 February 2006 (UTC)

My point was not a theoretical confusion nor a confusion between beer and toilet paper. I was responding to your question, "And why are you so sure that the practice of selling cheaper in bulk has nothing to do with the anticipated drop in demand?" My point was merely that buying in bulk is a general phenomenon, and this general phenomenon cannot be related (as you yourself indicate above) to declining "satiation".--Jack Upland 00:21, 21 February 2006 (UTC)

And my point was and is that buying in bulk should not be treated as a unitary phenomenon, anymore than is the color green. Grass is green because it contains chlorophyll -- some walls are green because paint has been applied to them. We don't have to "understand greenness as a unitary phenomenon" by attributing the same cause to the walls and the grass. We'd be better advised not to. So my question concerning the single night's beer drinking remains unanswered. Why are you so sure that the practice of selling cheaper in bulk [as to single-satiation leven consumption], has nothing to do with the anticipated drop in demand? and your theoretical confusion doesn't disappear simply by virtue of denying its existence. --Christofurio 13:41, 6 March 2006 (UTC)

Well, after introducing the greenness of grass into an argument about the price of beer, I don't think you should lecture anyone about theoretical confusion. I rest my argument on Ockham's Razor: if we already have an agreed explanation for buying in bulk, why postulate a new one for specific cases?--Jack Upland 22:46, 6 March 2006 (UTC)

Bohm-Bawerk

The treatment of B-B seems third hand. I'll work on getting it right when I have the time.

Ah, there! much better, IMHO. --Christofurio 20:36, Aug 23, 2004 (UTC)

Jdevine, this isn't "minor editing"!

"Marx might respond that this did not contradict his understanding of prices, in which sectors of the economy which have higher "capital intensity" (greater roundaboutness) have higher prices, in order to give capitalists there the same profit rate as in other sectors (see below). The difference, it seems, between Marx and Böhm-Bawerk concerns perspective: for Böhm-Bawerk, roundaboutness justifies all entrepreneurial profits, whereas for Marx, it justifies only those profits of the more capital-intensive operations, which represent redistributions from less capital-intensive ones...."

It's absurd. B-Bawerk spoke of entrepreneurial profit only to distinguish it from what he called "originary interest." A trust fund baby can get originary interest without ever doing anything entrepreneurial. Both are "justified" in the sense that they help send information through the price system and redirect incentives (such as the incentive to minimize financial risks by hedging investments) but they are different. And how is this a difference of "perspective"? What does that mean? Are there some differences that are perspectival and others that aren't? Furthermore, it isn't obvious that roundaboutness correlates with capital intensity, or that relative capital intensity deserves any moral judgment one way or the other. --Christofurio 03:30, Aug 24, 2004 (UTC)

To the extent that "capital intensity" can be measured at all (and strictly speaking, it can't, as noted in the entry on the capital controversy), it's highly related to roundaboutness. If an "entrepreneur" engages in a roundabout process, that involves tying up a lot of capital in a fixed form for a long time. Relatively high fixed capital = capital intensive. I also changed the discussion of the differing perspective. (NB: I try not to characterize B-B's point of view, since I am not an Austrian. Sometimes I have to, but I hope that people correct my characterizations.) Jdevine 03:38, 24 Aug 2004 (UTC)

Your latest version is an improvement, and I especially like the reformulation on the issue of external costs. That's a VERY large issue, which would be a terrible tangent here, and is better finessed, or a lot of editors could end up expending a lot of labor time in a socially useless manner. I appreciate your open-mindedness. --Christofurio 03:47, Aug 24, 2004 (UTC)

I have shortened the article severely. I hope it's coherent. Jdevine 23:46, 28 Aug 2004 (UTC)

Restructure?

I'm finding this article heavygoing, with too few landmarks or recognizable cyc features for the reader to get his bearings. Instead, we meander through several of the incarnations of the theory, critiques of some or all versions, and various responses to those critiques. A complete restructure might make it more accessible and easy to comprehend. Can I canvass suggestions for a restructure? Adhib 19:07, 15 Sep 2004 (UTC)

I'm the main author of the entry, but I'll leave it for others to suggest a way to restructure it. Jim 15:46, Sep 16, 2004 (UTC)

I'd like it to start with a simple, logical exposition of what Labor theory means in general, with an emphasis on the prime difference between it and 'mainstream' economic theory - that there is an objective value embodied in goods, as opposed to a 'constructed' value, existing subjectively between buyer and seller. Then focus the account of the several distinct labor theories (and critiques relevant to the same) around their specific incarnations; ie, Smithian, Ricardian, Marxian, perhaps Sraffian. This historic approach would give the reader a narrative, to follow refinements to the theory. Some issues (exploitation, transformation problem) would be better moved to their relevant entries elsewhere. Thoughts? Adhib 10:28, 20 Sep 2004 (UTC)

I agree, that would be better. As it is now, it is dense, and the history and explaining is interlinked. Also, the language seems to be needlessly complicated. The labor theory of value (LTV) is a theory in economics and political economy concerning a market-oriented society: the theory equates the "value" of an exchangeable good or service (i.e., a commodity) with the amount of labor required to produce it. could easily be changed to The labor theory of value (LTV) is a theory in economics and political economy: the theory equates the "value" of a product with the amount of labor required to produce it.' without actually dropping any information. Regebro 06:48, 24 Sep 2004 (UTC)

I shortened it again (especially the history part), since the Wikigods told me to. Also, I dropped the references to "subjective" and "objective" value theories, because these terms need to be explained (making the entry longer). I see the former as referring to the view of individual participants within the system as a whole, while the latter refers to the institutional structure of the totality of the system. Jim 22:50, Sep 23, 2004 (UTC)

A link to Economic subjectivism would take care of that explanation, I guess... Also, I think some info deserves a page of their own, like the explanation of Marx theory of exploitation.

It's funny how this article looks like it comes from a paper encyclopedia, where you want all information to be close together, but in fact it has evolved into that collaboratively. :) Regebro 06:57, 24 Sep 2004 (UTC)

Bluemoose, why did you change the alternative interpretation? I reverted to the previous version. Unless there's a good reason, I say keep the text the way it is. Jim 17:44, Feb 9, 2005 (UTC)

Locke

Locke's theory is a moral justification of private property. It has really nothing to do with the labour theory of value which is an economic explanation of price levels and therefore doesn't belong here.--Jack Upland 02:56, 30 November 2005 (UTC)

That's right. That's the labor theory of property, rather than the labor theory of value. I'll remove it. RJII 17:27, 9 January 2006 (UTC)

Sorry that I've been away from the Wikipedia for a long time (too much work!). Though Marx does not present a "moral justification of private propery," he does have a moral critique. He makes it pretty clear that he judges capitalism by its own moral standards thoughout much of CAPITAL, volume I. Exchange at value (which he assumes) represents "equal exchange," the moral standards of simple commodity production. SCP is relevant because the ideologists -- the political economists that Marx is critiquing -- want to mix up capitalism with SCP (a classless and exploitation-less society). But he argues (in chapter 25 and afterwards), the production and accumulation of surplus-value lead SCP to turn into its opposite, a class society. Thus, the system is wrong according to the ideologists' own standards (which Marx rejected).

I used the phrase "labor theory of property" because Marx was not as concerned with prices as Ricardo was or modern economists are. He was concerned with the social nature of capitalism.

Neo-Ricardians (Sraffians) assert that the "labor theory of value" is "an economic explanation of price levels." Nowhere in Marx does he agree with this. He never does price theory until volume III, and there, prices are determined by prices of production (Smith's "natural" prices) as centers of gravity. Prices of production are related to values, yes, but at the aggregate level, with the sum of all values determining the sum of all prices (when stated in the same units, of course) and the sum of all surplus-values determining the sum of all property income. He was clearly not interested in calculating the individual prices of production from the individual values except for expositional purposes. In fact, it seems to violate his method. The whole and the parts are clearly distinct.

what IS the purpose of Marx's LTV? Read through CAPITAL and find out. I'd say that it's part of the "acid of abstraction" that Marx used to destroy the fetishism of commodities (see volume I, ch. 1). Jim Devine 71.107.9.186 02:33, 17 January 2006 (UTC)

Most people would say Capital Vol 1 ch 1 discusses price theory.--Jack Upland 09:56, 18 January 2006 (UTC)

Alternative interpretation

The alternative interpretation section is just an wishy-washy attempt to reconcile Marxism with neoclassical price theory. Neither Marx nor any other prominent proponent of the LTV ever endorsed the view that LTV was unrelated to prices. In Value, Price and Profit(1865) Marx wrote:

It suffices to say that if supply and demand equilibrate each other, the market prices of commodities will correspond with their natural prices, that is to say, with their values as determined by the respective quantities of labour required for their production.

Hence the attempt to present the LTV as fundamentally a moral critique of society is baseless. This 'alternative interpretation' - along with the references to Locke mentioned above, has therefore no place in this discussion.

Furthermore, the article is too structured round critiques (or supposed falsifications) of the theory. You cannot explain any theory if you don't give it room to breathe.--Jack Upland 03:19, 30 November 2005 (UTC)

I don't know about "wishy-washy." I totally reject neoclassical price theory, i.e., Walrasian general equilibrium theory. Like Marx, I think that supply & demand are okay (within limits). The problem is that markets and prices are not the topic of CAPITAL. Rather, it's class relations.

As I've argued elsewhere (in e-mails to Jack), Marx did not believe that prices of production (natural prices) equaled values. He was aware when he wrote volume III (before VP&P) that they were unequal. The "equality" is at the aggregate level, as I sketched above. It's also something that he assumes in volume I.

FWIW, I never presented the LTV as a "fundamentally moral critique." Maybe one could interpret it that way: it's hard to believe, but Marx actually wrote it so that workers could read it. He thought that it would help workers break through the fetishism of commodities (or what he called the "illusions created by competition" in volume III). This would allow them to understand the _totality_ of capitalist society, something that's obscured by commodity relations (markets, prices). Jim Devine 71.107.9.186 02:47, 17 January 2006 (UTC) revised 71.107.9.186 04:42, 17 January 2006 (UTC)

The 'moral critique' came from the association with Locke which has now been largely removed.
It's hard to accept that 'markets and prices are not the topic of Capital as Marx discusses them incessantly while he leaves classes to the final incomplete chapter of Vol 3!
In Value, Price & Profit Marx states baldly, 'Price, taken by itself, is nothing but the monetary expression of value'. It's hard to get round that.--Jack Upland 10:03, 18 January 2006 (UTC)

In addition, the following argument is very problematic:

However, on the macro level, there is a clear relationship between price and value... the total value of the product (the total amount of labor done) corresponds to the total price of the product (such as that measured by Gross Domestic Product). That is, labor embodied equals labor commanded (production equals demand) on the macro level.

Yes, GDP = aggregate expenditure = aggregate income. But this does not really support the case for LTV or Marxist exploitation. A market economist could reason: "Prices are set by supply and demand, sales revenue comes from prices, all incomes are ultimately paid out of revenue (directly via profits and wages, indirectly via interest, taxes etc), and hence incomes match prices. The workers do not create value, they just receive a share of the proceeds, and are not exploited if they are paid at the market rate." [1]

Furthermore, the constant reference to "labor commanded/labor embodied" is misleading. This might be Adam Smith's formulation, but it Marxist terms it is nonsensical as it implies that profit (exploitation, surplus value etc) is impossible i.e. that wages (labor commanded) equal prices (labor embodied). [2]

The argument is buttressed by spurious references to Marxism, in order to justify calling it a "interpretation", such as:

The contrast between the "macro" level of values and the "micro" level of prices corresponds to the contradiction that Friedrich Engels saw under capitalism, between the socialized production of wealth and the individual appropriation of it.

However, the cited passage by Engels has no reference to the value/price contrast! [3]

The piece concludes:

now that Marx has explained the nature of capitalist exploitation, why do we need the LTV?

But Marx's view of exploitation is bound up with the notion of "surplus value" and the LTV. If capitalists are all entrepreneurs satisfying the subjective demands of consumers, if value derives from utility, then profit derives from the marketplace, not the production process. Consumers are as likely to be "exploited" as workers. [4]

Hence the entire piece fails to connect with the issue.--Jack Upland 04:03, 12 January 2006 (UTC)

I've inserted some numbers in brackets above. Now here are my comments.

[1] a "market economist" might say what you say, but is the Wikipedia supposed to deal with every point? is the article supposed to _prove_ the Marxian theory? The article is already much _too long_ isn't it? All I did was to present "an alternative view" for people to digest, to think about. The actual proof of the Marxian theory of exploitation should go somewhere else, in a book or an article. Some of it already appears in what I added to the Exploitation part of the Wikipedia.

[2] The labor commanded vs. labor embodied distnction does appear in Smith, but it reappears in Marx's CAPITAL as the distinction between exchange-value and value. Most people just ignore the difference, which arises from the fact that in volume 1 of CAPITAL, Marx assumed that they were equal. (His prose is also not the best.) Of course, they aren't the same, as indicated by the (in)famous "transformation problem." For example, capital with a high organic composition will be able to command more labor per unit of output (have a higher price of production) than might be justified by the amount of labor embodied per unit of output (the Value of the commodity).

Jack writes that in "Marxist terms it is nonsensical as it implies that profit (exploitation, surplus value etc) is impossible i.e. that wages (labor commanded) equal prices (labor embodied)."

For Marx, wages do not equal "labor commanded," while prices do not equal "labor embodied." The labor commanded would be the price of a commodity (in value terms) or its exchange-value (what it can buy). The labor embodied would equal Marx's value (its cost, in value terms). Exploitation arises, according to Marx, even when exchange-value equals values (as he assumes in volume I).

Marx's idea is that there's a difference between the value (= exchange-value, by assumption) of the product and the value (= exchange-value) of the labor-power used to produce it. The commodity "labor power" (the ability to work) is a special commodity for Marx, one that has the use-value (i.e., living labor, human activity) of being able to produce more value (exchange-value) than it costs to pay the wages (exchange-value) of that commodity. He spends a lot of time talking about the real-world production process (rather than markets), but a lot of people simply ignore that part of the book.

Unfortunately, Marx leaves the main explanation for why labor actually produces surplus-value to the end of the book. (I think he may have been influenced by a mystery writer. Wilkie Collins?) The value produced by labor exceeds the cost of labor-power because workers do not own the means of production and subsistence and thus must work for the capitalists in order to survive as human beings.

[3] In the book in question (the anti-Duhring), Engels wrote a summary of the Marxian viewpoint, using Marx's commentary on his manuscripts as a guide. The stuff about the contradiction between individual appropriation and social production is very central to their shared viewpoint. It seems to me that it makes sense to put Marx's LTV in that broad context. This is especially true because so many try to understand Marx's LTV from a non-Marxian perspective, assuming that he's talking about price theory, etc. No, he's talking about the dynamics of capitalism as a social system.

[4] see comment [1] above and the explanation of Marx's theory of exploitation in [2]. My rhetorical question (that Jack quotes) was simply an effort to avoid being dogmatic. I think that _given his theoretical framework_ (including the volume I and II (and VP&P) assumption that exchange value = value), Marx did demonstrate the existence of surplus-value. But it's unclear if that that theoretical framework is really needed. John Roemer, for example, claims to have demonstrated the existence of surplus-value and exploitation in a perfectly competitive Walrasian general equilibrium model. I think he failed in that effort, but the entry is already too long for the Wikipedia. Jim Devine 71.107.9.186 04:42, 17 January 2006 (UTC)

[1]The point is the theory loses any explanatory power. [2]A practical example might make the point clearer. Say I have an item with the price $20. The 'labour commanded' is how much labour I can hire with $20, say 1 hour. The 'labour embodied' is how much labour went into the item. If this is the same as 'labour commanded' (i.e. 1 hour), then with wages at $20/hr the producer can never make a profit. The difference is between labour commanded and embodied is hence essentially that between wages and price. This has no relation to the Transformation Problem as presented in the article. It relates in Marx's theory to the creation of 'surplus value', not to a distinction between 'value' and 'exchange value'. Attually, Marx does not make much of a distinction between 'value' and 'exchange value', saying in Capital:

Therefore, the common substance that manifests itself in the exchange value of commodities, whenever they are exchanged, is their value. The progress of our investigation will show that exchange value is the only form in which the value of commodities can manifest itself or be expressed.[1]

Marx's prose is not at fault just because he doesn't say what you want. And it is simply confusing to talk about Marx's meaning for a term ('labour commanded') that he doesn't use! [3]However, neither Marx nor Engels made the point about the 'contradiction' of values and exchange values. [4]I see - but it reads strange. --Jack Upland 07:40, 18 January 2006 (UTC)

Transformation Problem

This passage is overly long and theoretical. The issue could be summed up (without the algebra) as: given the varying proportions of "living labour" in different types of production and the theory that surplus value (i.e. profit) is only extracted from "living labour", how can the tendency of profit rates to normalise be explained? Ironically, Marx addressess this in Capital by the competition between firms (as does the article, point 6), but the article buries this point!--Jack Upland 02:07, 10 January 2006 (UTC)

L>v

In Marx's theory explained there is a constant reference to L>v which supposedly equals exploitation. The conception that workers should receive the entire product of their labour as wages was denounced by Marx in the Critique of the Gotha Program (I.3.) as under socialism funds still need to be set aside for investment, social services etc. This "explanation" goes beyond this misconception by arguing that under capitalism L>v is not a given i.e. that profit-making is not a given. This is plain nonsense.--Jack Upland 07:08, 12 January 2006 (UTC)

Restructure

I propose that Exploitation and Transformation Problem have their own pages and only linked with summary here. The Alternative Interpretation should be pruned down (apart from reference to Roemer it seems original research anyway) and placed on Exploitation page (after all, it denies LTV). Does anyone have a problem with that?--Jack Upland 07:15, 12 January 2006 (UTC)

Physiocrats

Did the Physiocrats really support the LTV? The citation says they did, but my understanding is that they said that agriculture was the source of all wealth. I wonder also about the other works cited. While I have seen Franklin quoted, the other theories might not actually amount to LTV.--Jack Upland 04:54, 13 January 2006 (UTC)

There being no support, I declare this assertion deleted.--Jack Upland 04:55, 6 August 2006 (UTC)

I agree with your deletion. I think whomever added that was probably mistaking the physiocrats for theorists theorists of labor value due to their importance as theorists of surplus value. --Cplot 07:48, 6 August 2006 (UTC)

Böhm-Bawerk Trimmed

I've replaced the short critique of Bohm-Bawerk's argument which was deleted by an unnamed user. I had trimmed down the previous section, which was getting like a debating forum, but it's only fair that the obvious responses to the argument are briefly mentioned.--Jack Upland 07:56, 27 January 2006 (UTC)

Intrinsic Theory of Value

I've moved criticism of the theory from the introduction to its own section - otherwise the article isn't neutral. The assertion that the LTV is 'intrinsic' certainly isn't true for Marx who saw the theory as only applicable to capitalism (see the quote from Gotha given in the article). I deleted the reference to a 'rock' being more expensive to extract than a diamond since I think it is nonsensical.--Jack Upland 10:09, 18 February 2006 (UTC)

I totaly disagree with your point. To say that the LTV is outdated, is simply stating a fact. It is NOT a criticism. If at the begining of an article on steam engines I where to say "steam engines where the main driving force during the 19th century, but now are mostly of historical value" that would not be a criticism, it would be a statement of fact.

A better example: for centuries we thought the world was the center of the solar system. Then we discovered it was not. What prompted us to look for a new theory? because the heliocentric explanation failed to account for certain movements of the planets. It would not be out of place in the introduction of an article on heliocentrism to state "this theory has been disproven, and is currently of historical value only". This would not be a criticism, it would be a statement of fact.

The labor theory of value fails to account for certain disparities in worth, most importantly the diamond-water paradox. It has been superceded by more modern theories of value. That is a fact. I am sure a lot of people wish it wasn't so, because an entire ideology (marxism) is built uppon LTV. But you can't wish facts away. The statement belongs in the intro, not in a "criticism" section.

Dullfig 19:37, 18 February 2006 (UTC)

The diamond-water paradox is not really applicable as a failure of the labor theory of value. Adam Smith used the labor theory of value to actually explain the Diamond-Water paradox. The paradox is that water is more useful (valuable) than diamonds yet water has a lower market price. Smith's explanation for diamonds having a higher market is that diamonds take more labor to obtain than water. Smith's labor theory of value says that the things that take no labor to acquire are free --such as air. So, when you purchase something, you are actually purchasing someone else's labor. What the labor theory of value actually does seem to be awkard in explaining is why, for example, a movie that costs 2 years of labor to create should command a higher ticket price than a movie that costs 1 year of labor to create. Why would more labor being spent on the movie make it more valuable? Or, why would a rock that took the same amount of labor to obtain as a diamond be less valuable? Why shouldn't it command the same exchange value? RJII 21:02, 18 February 2006 (UTC)

And it doesn't explain why emeralds, which are even harder to find, are not as valuable than diamonds. That is why it no longer is called the "water diamond paradox", but the Paradox of value. There are many more such discrepancies that the LTV cannot explain, and therefore is outdated. -- Dullfig 21:22, 18 February 2006 (UTC)

I believe the point is that the value of an item is equal to the amount of labor that is necessary to produce it. Thus, a rock that took the same amount of labor to obtain as a diamond is less valuable because much of that labor was unnecessary - you could have obtained an identical rock by other means, consuming less labor. Useless labor does not add to the value of an item. I am not aware of any advocate of the LTV who ever said that any and all labor creates value. The LTV says that all value is created by labor, but that does not imply that all labor creates value. -- Nikodemos 22:18, 18 February 2006 (UTC)

That's incorrect. The labor theory of value says that the value of anything is the amount of labor that went into producing or acquiring it. Of course labor creates value. Those who espouse the subjective theory of value strongly believe that labor creates value. But, the STV says that the maginitude of the value of a thing is not contingent upon the amount of labor that went into producing that thing. LTV disagrees. RJII 22:22, 18 February 2006 (UTC)

I can't speak for Smith or Ricardo, but Marx clearly talks about the socially necessary amount of labor that went into producing or acquiring an item. As for the STV, it clearly holds that there is no relationship between labor and value. If value comes from personal subjective judgements, an item that took less labor to produce can be worth more than an item that took more labor to produce. -- Nikodemos 22:29, 18 February 2006 (UTC)

Those who hold the subjective theory of value do believe that labor can create value. If someone finds a boulder that no one values, then sculpts a figure out of it, value has been created. In other words, a thing that people value has been created. But, they say that the exchange value (the price) of the figure is not contingent upon how much labor that went into sculpting it. The exchange value is properly contingent only upon individual subjective value judgements. A strict labor theory of value says the exchange value should match up with the amount of labor that went into sculpting the figure. RJII 22:53, 18 February 2006 (UTC)

A strict labor theory with such features would indeed be daft. But I think Marxists don't (or shouldn't) espouse such a thing: in this case, the value of a particular sculpture would instead be fixed by the entirety of the social commitment of people and time that is required in order to produce items of just its quality - that total social commitment (the socially-necessary labour time) being shared out over the total number of items so produced. So the price is an aliquot part of a social whole, never an isolated, material process local to the particular commodity and its particular maker. If the sculpture is primitive, the value is low, as the institutional overheads behind its construction are minimal. If the sculpture is of exquisite subtlety and profoundly innovative in form, the institutional overheads informing the artist who crafts it are likely to have been extremely high. Around this rational core one may expect, of course, several layers of tendencies influencing the precise value of any piece at any given time. As I've urged contributors to consider before, I find strong evidence here that Marxian value theory is mischaracterised as a labour theory of value. It's a theory of social relationships. Adhib 21:39, 17 May 2006 (UTC)

Funny, in Marxian economics value and exchange-value are separate things. Infinity0 ^talk 23:06, 18 February 2006 (UTC)

But surely they aren't on altogether different planets. In the Austrian view, which unsurprisingly uses somewhat different terminology, the market value of an item is the aggregation of the subjective individual valuations. They are different things in much the same way that a pile of sand is a different thing from any single pebble. --Christofurio 19:45, 20 February 2006 (UTC)

The STV says "the value of an item is determined by individual perception" - a circular definition when applied to market price, and labour independent. Infinity0 ^talk 22:30, 18 February 2006 (UTC)

I don't subscribe to the subjective theory either. PLEASE read Rand. You can't make an informed judgement without reading all views. Everyone keeps droning on and on as if intrinsic and subjective where the only options. -- Dullfig 23:22, 18 February 2006 (UTC)

Rand was not an economist, and it is not clear to me how her theory of value is anything other than a specific branch of the STV. The STV says that the value of an item is determined by individual perception. Rand agrees, but goes on to say that individual perception itself is not completely up to the individual's imagination; it depends on the physical properties of things. This does not contradict the STV - it merely builds upon it. -- Nikodemos 00:37, 19 February 2006 (UTC)

Intro. To state in the introduction that LTV is 'outdated' (i.e. wrong) is clearly POV. Perhaps we could say that in mainstream economics it has been superseded.
The Diamond-Water Paradox. In Chapter 1 of Capital Vol 1, Marx comments, 'If we could succeed, at a small expenditure of labour, in converting carbon into diamonds, their value might fall below that of bricks'. This predicts cubic zirconiums. How does a 'subjective theory' deal with this?
Emeralds. As I have stated earlier, the emerald/diamond difference may be explained by the work needed to cut diamonds and the monopolistic nature of the diamond industry. Fundamentally, you can't dismiss the LTV based on one convenient example - any more than you can dismiss marginalism with the example of air.--Jack Upland 01:26, 19 February 2006 (UTC)

Can you explain to me how a shoe, which takes quite some time to manufacture, is of no value to a man with no legs? Why is penicilin worthless to someone who is not sick? Why is wine worthless to a mormon? Why is a car worthless to an amish?

Take two primitive men. One makes pottery. The other makes arrowheads. They strike a deal, and exchange 1 pot for 1 arrowhead. To the arrowmaker, a pot MUST be more valuable than an arrowhead, or he will not trade. To the potery maker an arrowhead MUST be more valuable than a pot, or he would not trade. how can both objects be simultaneously more or less worthy depending on who's trading? The value of an object can NEVER be entirely outside the judgment of the user.

And by the way, superceded is exactly what the intro used to say. -- Dullfig 06:53, 19 February 2006 (UTC)

[It didn't say "in mainstream economics" it was more definitive and implied the theory was wrong - which isn't neutral.--Jack Upland 10:18, 20 February 2006 (UTC)]

And don't tell me it's because my example is within a primitive economy. When you buy a car for $5000, you MUST consider the car worth more than that, or you will not buy it. And the guy selling the car HAS to value the $5000 more than the car, or he will not sell. -- Dullfig 06:53, 19 February 2006 (UTC)

People make subjective judgements of value all the time. This is a fact. The point of any objective theory of value (including the labor theory) is that sometimes these judgements are wrong. If a man with no legs finds a shoe and thinks it doesn't have any value, for example, he is dead wrong. Of course the shoe has value. He could take it and sell it to a man who does have legs.

HAHAHA!! I don't think you realize what you just said: if he finds the shoe, and then sells it, he will be making money that by your theory he did not EARN because he did not MAKE the shoe. So within your framework of thought, the only legal thing the guy could do is give the shoe away. So it is STILL worthless to him. And of course you said "found" because the guy would never actually BUY the shoe, because shoes are indeed worthless to him. The individual judment of each person has to be taken into consideration when figuring out value. -- Dullfig 17:45, 19 February 2006 (UTC)

The value of the shoe comes from the labour that goes into making it. It is not necessary to LTV that the labour be performed by anyone in particular, it just has to have been performed by someone. LTV does not attempt to define the notion "value of object X to person Y", it attempts to define a non-subjective notion of value. Cadr 18:35, 10 March 2006 (UTC)

"How can both objects be simultaneously more or less worthy depending on who's trading?" Easy: They can't. One of the traders is right, and the other is wrong. -- Nikodemos 07:13, 19 February 2006 (UTC)

You're back to making this claim? I thought you had climbed down from this limb, at least in the universalist terms in which you make it here. You have a painting in your basement that makes no real appeal to you -- maybe you inherited it from a grandmother whose tastes in art ran to impressionism, whereas yours differ. I would put your painting on my wall with great satisfaction if I could only get hold of it. So I offer you $150 for it. The painting is worth much less than that to you, and more than that to me. Show me why either of us is wrong! If we're both right, then the total utility in society would seem to be maximized by allowing such trades.

Maybe the painting isn't entirely worthless to you. Maybe you like having something around the house that reminds you of Grandma, who was a fine old gal however horrid her taste. So its worth ... $20. Maybe I'd be willing to give as much as $300 for it. In this case, if we settle at $150, your utility will increase by a net of $130, and mine by a net of $150. Incidental transaction costs are small, so the society which includes the two of us has just improved its utility by $280. (I'm not a utilitarian, but I use the lingo for illustrative value, and because you say that you are.) --Christofurio 16:34, 19 February 2006 (UTC)

The labour theory of value tries to put an intrinsic value on something. The subjective theory of value states the obvious. The question that should be asked is "what are people's perceptions of value based on?" rather than "what is value based on?" In the end, market price is only average(people's perceptions of value).

Christofurio states it well. I'll state it in another way. It just comes down to personal taste. If one person values chocolate ice cream the most and another person values vanilla the most, they're both right --UNLESS value is intrinsic. The labor theory of value says value does not depend on personal taste. It says that there is an objectively best ice cream --one that is intrinsically more valuable than all the rest. How do you determine what the most valuable flavor of ice cream is? By observing which flavor takes the most labor to produce. With this as a premise, some theorists draw conclusions that have to do with profit and exploitation. In order to not exploit the producer of that ice cream, you should pay him more than the producer of the ice cream that takes less labor to produce --even if you value the ice cream that was less laborious to produce more. Otherwise, you're stealing the labor of the worker. (The moral is, check your premises.) RJII 20:17, 19 February 2006 (UTC)

Exploitation theorists don't always use the LTOV. The worker is treated as an object, another tool in the process of production, rather than as human being with rights to own the products of his labour. Their wage is never equal to the products of their labour, since they are traded on different markets. And the employer always makes a profit off the employee, otherwise he wouldn't employ him. Infinity0 ^talk 20:41, 19 February 2006 (UTC)

"The worker is treated as an object, another tool in the process of production, rather than as human being with rights to own the products of his labour." You must be talking about communism. RJII 20:50, 19 February 2006 (UTC)

This conversation is getting silly if not deranged:

Again, use value is equated with exchange value! This is begging the question. In fact, as we have seen again and again, they aren't the same - a problem with "utility" based theories. It is not about the "best" ice cream, but the most expensive. As they say, the best things in life are free etc... (Well, air is pretty important anyway.)
The argument that exchange must be based on differing values is false. Why can't you exchange at equal value? I grow potatoes, you raise pigs, and we mutually exchange so we can both have bangers and mash. I think it's called comparative advantage.
Exploitation in Marxist theory is not based on the customer underpaying, so regrettably the whole tirade on ice cream is just waffle.--Jack Upland 10:12, 20 February 2006 (UTC)

Who are you talking to? Me? I'm not equating use value with exchange value. I'm saying the labor theory of value says that the ice cream flavor that is the most laborious to create is has the most intrinsic value and therefore should have the highest exchange value. Of course you can have a trade of goods with equal labor-value --that's exactly what some labor-value advocates advocate. And no, that's not called "comparative advantage." And, the seller charging a higher price than the labor cost is the same as "customer underpaying" if the customer is the one purchasing the money with the ice cream. RJII 14:40, 20 February 2006 (UTC)

You don't understand:

The concept of "socially necessary labor".
The reason why LTV is not a moral/intrinsic theory.
The concept of equal trade, which is implied by the concept of "comparative advantage" (i.e. one side doesn't lose in relation to the other).
The concept of purchase (someone selling an icecream does not "purchase" money!)--Jack Upland 00:28, 21 February 2006 (UTC)

You don't know what "Comparative advantage" means. It doesn't mean "one side doesn't lose in relation to the other." It means one side has a cost advantage over the other side, in regard to a good he can trade out. And, of course someone selling ice cream is purchasing money. Money is just as much a commodity as ice cream is. When you make a trade, you're simultaneously selling something and purchasing something. When you sell something, you're purchasing what you're receiving in exchange --whether it's money or some other commodity. When you purchase something, you're selling what you're giving in exchange. There is no trade made without a simultaneous sale and purchase by both parties to the trade. Read Wealth of Nations or something. You need to get some basics down. RJII 02:35, 21 February 2006 (UTC)

"Theoretically" you're correct on "purchasing money" - but it defies common sense. I never said "comparative advantage" meant "one side doesn't lose" but my example above is related to the concept of "comparative advantage". You should read and think about what your criticising first because you're essentially begging the question in this discussion.--Jack Upland 02:56, 21 February 2006 (UTC)

What do you mean I'm "theoretically" correct. I'm actually correct, no caveats. It may defy "common sense", but common sense is often not reliable. And what are you talking here: "The argument that exchange must be based on differing values is false. Why can't you exchange at equal value? I grow potatoes, you raise pigs, and we mutually exchange so we can both have bangers and mash. I think it's called comparative advantage." ??? First of all, again, that's not called "comparative advantage." Secondly, you CAN "exchange at equal value" under the LTV. To do that means two goods are being exchanged that were produced by an identical amount of labor. That would constitute a profitless transaction --neither side is reaping more labor-value than they're giving in exchange. Those who hold a subjective theory of value don't see any sense in trying to match up amounts of labor --value is in the eye of the beholder. Value (including proper exchange value) is not determinable by calculating how much labor it took to produce something. Whatever price someone pays for something is a reflection of his valuation of that thing, be it a good or labor itself, and to subject his valuation (including the resulting exchange value) to judgement of being correct or incorrect is bizarre. RJII 03:20, 21 February 2006 (UTC)

I was responding to the argument above that equal exchange is inconceivable. I was not basing my argument on LTV.
I would have seen profit as the difference between the sale price and the costs of production. Silly me. Now everyone can make a profit so long as they believe strongly enough.
If price is dependent on the individual, then how do you account for real world prices which are generalised?--Jack Upland 07:34, 21 February 2006 (UTC)

The "cost of production" is labor. Selling a product for more than what accords with the amount of labor that went into producing it is profit. "Real world" prices, in a market economy, are the result of two individuals agreeing on a price. They're not agreeing on a objectively "correct" price that can be calculated irrespective of their own personal taste. RJII 14:43, 21 February 2006 (UTC)

"The worker is treated as an object, another tool in the process of production, rather than as human being with rights to own the products of his labour." You must be talking about communism. RJII 20:50, 19 February 2006 (UTC) - I'm not a communist; that comment doesn't have an effect on me. Also, it's a straw man, as I was talking about wage labour and capitalism. Infinity0 ^talk 13:51, 21 February 2006 (UTC)

You couldn't be talking about capitalism. In capitalism the individual has the right to own the product of his labor --private property. RJII 14:43, 21 February 2006 (UTC)

But real world prices are usually not the result of individual bargaining. Get real.--Jack Upland 02:25, 23 February 2006 (UTC)

Some real world prices are the result of individual bargaining and others are the result of coercive State interference in economies, including setting prices on labor and goods by force-backed decree. Is that what you want hear? RJII 04:31, 23 February 2006 (UTC)

Most customers who go into a supermarket do not bargain on each item.--Jack Upland 05:21, 23 February 2006 (UTC)

Yes they do. If an asking price is too high for your taste, you don't buy the item. You're contributing to a lack of demand. If someone else thinks it's too expensive, he doesn't buy the item. And, so on. If only a couple people are willing to pay that price for the item, the seller isn't going to make a profit. Eventually he will lower his prices to attract you and other potential buyers like you. If too many people buy and it looks like he could run out of his supply too easily, he raises his price knowing that people are willing to pay more than they're paying now. There's not vocal haggling going on, of course, but it is a process of quiet negotiation. Each individual has an effect. It's called "supply and demand." RJII 05:34, 23 February 2006 (UTC)

In capitalism the individual has the right to own the product of his labor --private property. - no, sweatshop workers don't get to own the t-shirts they make. Infinity0 ^talk 14:42, 23 February 2006 (UTC)

If you go to work for somebody, you consent to giving them part of the product of your labor --you make deal with someone: "If you let me use your tools and machines, I'll give you part of what I produced." If you choose to use your own tools, you get to keep the full product of your labor. No one is allowed to force you one way or the other. RJII 14:49, 23 February 2006 (UTC)

Well, LTV accepts supply and demand (as you have trouble coming to terms with). But this doesn't mean there is an individual price for each individual customer.--Jack Upland 07:11, 25 February 2006 (UTC)

There is Only One 'S' in "Intrinsic"!

I'm glad I got that issue of proper spelling off my chest. Here goes ....

Thanks for your thoughts, Jack. A few points, if I may.

Air -- to take your example -- isn't free. To the extent that it is maintained as a 'commons' it quickly becomes problematic. Any efforts to keep it breath-able within an industrialized world entail costs, and unless you are going to take the position that the human race ought to de-industrialize, you'll have to maintain that those costs ought to be paid by somebody through some mechanism or other. My own preferred mechanism would be a continued development of tradeable emission rights. Which gets us back to the issue of value where we started.
If you already have some potatoes, but you don't have any meat, and you want to make a meal consisting of both, then the marginal utility of meat, the stuff you don't have yet, is greater than the marginal utility of your last few potatoes. The trade you propose will be based upon the difference between the two marginal utilities. You're right that this is closely related to the issue of comparative advantage. It also is perfectly consistent with the general principle that exchanges arise from differing values.
This is an article about the LTV in general, and much recent discussion has concerned the alternative offered by the STV. There's no reason any one should limit discussion to the Marxist mechanism for exploitation specifically. At any rate, consumerist examples happen to be convenient illustrations, whether they involve ice cream or whatever (your own example involves a meal with two components -- another consumerist illustration -- so you know this full well). Portfolio theory provides another field of illustration, though. I may be willing to buy some tradable emission rights (for re-sale, since I don't own any factories), and buy them at a higher price than you would, consistent with rationality on both of our parts, because it fits within my over-all portfolio better than it fits within yours. --Christofurio 15:00, 20 February 2006 (UTC)

Sorry, but in terms of "exchange value" air is free. When did you last pay for a breath? Who would you pay? "Market"-style attempts to deal with pollution (carbon trading, emission rights) are in fact government constructs. They no more represent goods or services in themselves than taxes do.
The meat and potatoes example was intended to convey that both farmers value (subjectively and in terms of exchange) both products. Yes, you can conceptualise this in marginalist terms. The point is that the exchange doesn't necessitate a different values as was argued above. Both farmers could believe they had the best of the bargain, but if they have an identical meal of bangers and mash at the end of it, why would they?
My farmer tale is really a "direct producer" example. This is simple. When you start talking about Marxist exploitation (which was the point of the ice cream tirade) and then ignore the role of the capitalist and talk about consumers, you are really up chocolate creek without a paddle pop.--Jack Upland 00:49, 21 February 2006 (UTC)

First, the fact that I don't pay for my breath doesn't make air free. It means by definition that it is free for me, but I may just be getting away with something. I might be the beneficiary of somebody's generosity, or a tax-based subsidy, or I just might be a thief. 'Free for me' doesn't mean 'no value.' Jacques Cousteau certainly paid for a lot of air during the course of his career. More to the point, my father paid for compressed air in his final years as his lung condition worsened. He was a Korean War veteran -- the V.A. paid for it, and accordingly taxpayers paid for his air. Still, there was nothing free about it. And watching him in his final years certainly removed from me any temptation to believe that breathable air is of no value in any sense. Emission rights begin as government constructs just as chickens begin as eggs. So what? Somebody will have to pay through some mechanism to keep the air clean enough to use in an industrial world -- in this sense, we are all in the position of Jacques Cousteau -- and whatever the mechanism is, this brings us back to value questions, and can be treated through either of the contended theories we've been discussing. If the construct of "exchange value" hides from us the expense of breathable air, then this is a drawback of it, not a merit.

Seond, neither farmer has to believe he had the "best of the bargain" in order to confirm the point about different values. You seem to be presuming your conclusion again. The potato farmer may believe that he bought meat that is more valuable for him than were the potatoes he sold, while also understanding that the same is true from the pig-merchants' point of view. Neither party has to believe that he cheated the other, which is where you seem to want to take things, in order for both to believe, rationally, that the deal was profitable, because it made that two-component meal possible.

Third, all you've really established is that if you presume an objectivist (small "o"!) point of view, you reach objectivist conclusions about value. And from objectivist conclusions, turned around into premises, the original premises can be inferred as conclusions. You seem to think that this helps us settle for one set of premises over an alternative, but all the circularity of it does is get us always back where we started. If the farmers simply want to cook for themselves, their proposed meal is a consumer good. But again: who cares? that categorization issue is trivial. --Christofurio 14:12, 21 February 2006 (UTC)

Your contention that normal breathing is not free is in the context of a discussion of "exchange value"/price absolutely nonsense, and you know it.
With meat and potatoes, I was responding to the earlier assertion that someone has to win, someone has to lose. We both agree that's not true.
I was also responding to the assertion that, assuming 'objectivist' values, no one would bother trading. Clearly false. Again, you are responding to an argument that wasn't made against your opinion.--Jack Upland 02:31, 23 February 2006 (UTC)

- Yes, I am saying that even normal breathing is not free. If this is nonsense, you should show me why instead of justsaying so. I certainly don't know it to be so, indeed if I have any knowledge on the subject, I know it to be very important to remember that all living, and thus all breathing is an activity that imposes costs. My own breathing right now has no price for me, but a wallet has no price for an 'artful dodger.' Show I'm not thereby a thief, or (more kindly) the beneficiary of a subsidy.
- If "exchange value" just means "price for me" then "exchange value" is as subjective a concept as is marginal utility. Your appeal to me to tell you whether I personally paid for my oxygen was susceptible to that counter.
- If "exchange value" means "market price," then it simply fails to take account of the possibility that a market may be suppressed by political action, and a comprehensive theory of value should account for such possibilities, and help us to examine whether they do good or harm. This consideration indicates that we shouldn't put the concept of "exchange value" as you seem to understand it at te heart of value theory. On the other hand, if "exchange value" means the value that something would have if there were a market, then breathing has an exchange value. It is a small value for a healthy person, i.e. "too cheap to meter," but not thereby non-existent. Indeed, we should all be concerned and act so as to keep it cheap, because on the global scene we are all in the Jacques Cousteau's flippers. Doing so means means, IMHO, privatizing various exhaust rights. At the minimum, it means adopting a subjectivist theory of value and recogizing that "exchange value" is simply the accumulation of a lot of individual use values. --Christofurio 15:31, 23 February 2006 (UTC)

Normal breathing is free because neither I nor you nor anyone else have ever paid for it.
As I point out above, the LTV is not an instrinsic/objective theory of value in the strict sense of the word. It relates to the current phase of human society. As Marx stated in The Critique of the Gotha Programme:

Labour is not the source of all wealth. Nature is just as much the source of use values (and it is surely of such that material wealth consists!) as labour, which is only the manifestation of a force of nature, human labour power...And in so far as man from the beginning behaves towards nature, the primary source of all instruments and subjects of labour, as an owner, treats her as belonging to him, his labour becomes the source of use values, therefore also of wealth. The bourgeoisie have very good grounds for falsely ascribing supernatural creative power to labour: since precisely from the fact that labour depends on nature it follows that the man who possesses no other property than his labour power must, in all conditions of society and culture, be the slave of other men who have made themselves the owners of the material conditions of labour.

Exchange value does mean average market price. And it is this we must discuss when we discuss economics - not what we "ought" to pay. (And after all old Mother Nature has no bank account.) The fact that air is free is not due to government interference with markets. Constructions like the Kyoto Protocol are perverse government constructions of artificial "markets" irrationally based on the premise that governments are the "problem not the solution".--Jack Upland 07:06, 25 February 2006 (UTC)

"Other Criticisms" deleted

I have deleted the "Other Criticisms" section, except for the critique of "socially necessary" which I placed after the discussion of this concept. My reasons are:

It restated the "Transformation Problem" which is already dealt with at length.
It did so wrongly, speaking in terms of "labor intensive industry" and implying that capital goods are not the product of labor.
It used the nonsensical argument that corn could be argued to be the basis of value as much as labor. Except that corn is not used to produce each and every product!!!!

In short, it was just an insult to everyone who has worked on the article or actually thought about the issue.--Jack Upland 09:54, 20 February 2006 (UTC)

The source is the Stanford Encyclopedia of Philosophy, certainly a reliable source. [2]Ultramarine 09:56, 20 February 2006 (UTC)

I don't care if it's Stanford or your grandma, it's wrong and unnecessary!--Jack Upland 10:13, 20 February 2006 (UTC)

Well, Wikipedia policy cares. This is not the place to publish original reserach. Ultramarine 10:16, 20 February 2006 (UTC)

Well, if your grandma said it first it's not original. (See, I can put forward irrelevant arguments too.) To get to the point: now that you have the explanation for the deletion, how do respond (apart from bowing before St Anford?).--Jack Upland 10:22, 20 February 2006 (UTC)

Again, reliable source given. Publish your objections outside Wikipedia and come back.Ultramarine 10:24, 20 February 2006 (UTC)

Here is another source also mentioning the "corn theory of value".[3]Ultramarine 10:32, 20 February 2006 (UTC)

But what about logic? This seems to be a bad instance of "appeal to authority". I can show you a million sources which attribute Marxism to a Jewish plot - should be incorporate this somewhere?? It looks like I can't reason with you. But seeing as the transformation problem is already discussed, why not just have St Anford's cornball theory on its own in this section? I know Wikipedia has a policy on overlong articles?--Jack Upland 10:39, 20 February 2006 (UTC)

Again, Wikipedia is not the place to publish original reserach. From the second source: "As Robert Paul Wolff has also shown, one can even formulate a "corn theory of value and exploitation" and rederive analogous results that the corn suppliers are exploited. "By reproducing for corn or iron or coal, all the striking results that Marx derived concerning for labor, we have, it seems to me, raised questions about the foundations of Marx's critique of capitalism and classical political economy. [Wolff 1984, 172]""

Thus, this is an old critique. You should certainly be able to find some Marxian economist who have made some objection. If you quote him, then there is no original research.Ultramarine 10:43, 20 February 2006 (UTC)

I wasn't suggesting that "my research" be put into the article, just that your research be left out as it is unnecessary, and wrong. But by all means let's keep the cornball argument. It's quite funny. I don't think we need a puppet "Marxian economist" to contradict it, it bears witness against itself and its supporters. But please don't write any more on the transformation problem here - it has its own (overlong) article too you know!--Jack Upland 10:47, 20 February 2006 (UTC)

Let us discuss this matter with clear heads. Ultramarine, you and I both know that economics is not your domain of expertise (notice, for example, that you seem to wrongly attribute the LTV to Marx or Marxism, when in fact it was formulated by Smith and Ricardo). Jack Upland's point is that the objections which you are trying to add have already been discussed higher up in the article. You might not have noticed this because they are presented differently - and, again, with all due respect, your domain of expertise is history, not economics. -- Nikodemos 18:01, 20 February 2006 (UTC)

I see nothing. Please quote exactly.Ultramarine 18:03, 20 February 2006 (UTC)

From the Transformation problem section:

For Marx, the essential problem is: given the varying proportions of "living labor" in different types of production and the theory that surplus-value (i.e. profit) is only extracted from "living labor", how can the tendency of profit rates to normalise be explained?

This is the correct formulation of the problem. Your discussion of "labor intensive industries" confuses the issue.--Jack Upland 01:00, 21 February 2006 (UTC)

PS I've had second thoughts and included a response to the 'corn theory' by a 'Marxian economist' as suggested - none other than Karl himself.--Jack Upland 01:23, 11 March 2006 (UTC)

Paradox of value

I have taken the reference to the "paradox of value" from the intro, because as discussed above, this is not a particular problem for LTV. It is more of a problem for "utility" based theories (including marginalism!). The LTV simply says well diamonds require more labor than water. QED. And as discussed above (under the heading Intrinsic Value) the term "intrinsic" is not really appropriate and rather amounts to a misrepresentation of LTV (which is based on market conditions).--Jack Upland 00:16, 21 February 2006 (UTC)

How is LTV based on market conditions? And how does LTV explain why diamonds are worthless to amish people? And Marginalism was though up precisely because LTV failed to account for many discrepancies in value. -- Dullfig 00:41, 21 February 2006 (UTC)

My impression - regrettably strengthened by this discussion - is that marginalism was thought up to avoid the implications of Marxism. So diamonds are free in Amish communities? The point that subjective theories can't deal with is that market prices are generalised. As to the LTV being based on market conditions, read the article's comments under "Justification..." and follow the links if you don't believe it.--Jack Upland 00:54, 21 February 2006 (UTC)

LTV does not explain the disparity in car prices, when they take pretty much the same amount of work. -- Dullfig 00:58, 21 February 2006 (UTC)

"My impression - regrettably strengthened by this discussion - is that marginalism was thought up to avoid the implications of Marxism."

As a matter of history, your impression may very well be true. Why would the strengthening of such a true observation be regrettable? Is there some less-regrettable origin for a theory? Or do you just regret that there are non and anti-Marxists in the world? Suppose, in studying the development of physics, I come to the conclusion that relativity was 'thoght up' in large part to escape certain unpalatable consequences of the older Newtonian point of view. Suppose it was some aesthetic unpalatability in particular that bugged Einstein, something outside the domain of what generally is considered 'doing physics'. Would that cause a rational person to regret that it was thought up at all? Or would that cause him/her to 'regret' hearing any evidence that confirmed that historical point? Would it bear on the rightness of Einstein's constructs one way or another? See under genetic fallacy for further discussion. --Christofurio 14:21, 21 February 2006 (UTC)

Who said cars take "pretty much the same amount of work"? Besides the practical aspects, I would argue that a car-buyer also pays for the image which is created by the work of designers, marketers etc.

BINGO!! the subjective evaluation of value by the buyer enters into the equation. It doesn't matter how long marbles (for example) take to make, if no one wants them! The subjective evaluation of each individual HAS to be taken into account, therefore the government cannot decide, by some kind of formula, how much an object should cost. -- Dullfig 19:05, 23 February 2006 (UTC)

"Regrettably" was ironic. (Or I could argue that I would rather be in a wrong-headed minority than live in a world where the majority were dead wrong!)--Jack Upland 02:39, 23 February 2006 (UTC)

- So the genetic fallacy is not a fallacy and only a dead-wrong majority think it one? --Christofurio 15:29, 23 February 2006 (UTC)

- - Obviously, a buyer needs to exist for the product to be sold. Marx for one is quite aware of this. But this does not differentiate between different products. And the LTV does not hold that the government should determine prices based on formulae- you should read the article.
  - As to the "genetic fallacy", my comment was made in a particular context (see above).--Jack Upland 06:46, 25 February 2006 (UTC)
    - The genetic fallacy is always committed in a particular context. So, for that matter, is any other fallacy. --Christofurio 13:18, 6 March 2006 (UTC)

I think you're going off on a tangent. I doubt many marginalists would accept their theory was originated for political reasons, even though you could argue that by "strict logic" this doesn't make it false.--Jack Upland 22:51, 6 March 2006 (UTC)

By any valid logic, formal or informal, that doesn't make it false. That's my only point here. If it's a tangent, it is one upon which you have insisted, and the scare quotes around logic, above, constitute a continuation of this rather wrong-headed tangential insistence of yours. Purely as a historical matter, I think most of the original generation of marginalists would have been happy to concede that their reversion to Marxism led them to take another look at the LTV, to see whether it could be replaced, and by what. Indeed: why should they not have been willing to concede that? Too strictly logical? You're sounding a bit like Dr. McCoy of the Enterprise! --Christofurio 14:41, 7 March 2006 (UTC)

I think you mean "adversion" or "revulsion", not "reversion". If you looked at the context, you would have known I did not say that the origin of marginalism proved it false. I was responding to Dullfig's comment that marginalism was developed to deal with discrepancies that LTV couldn't account for. (By the way, I think there are many instances where the genetic fallacy - while strictly logical - is not necessarily practically applicable. For instance, most people would consider a theory based on the research of an expert better than one generated by a chimp banging at a keyboard. Of course, the mere fact the theory was originated accidentally by a chimp doesn't necessarily mean it's false - by an astounding coincidence it could be true. Perhaps you could read Alice in Wonderland and see many examples of supposedly logical arguments which are completely nonsensical. But as I said this is a tangent.)--Jack Upland 22:25, 7 March 2006 (UTC)

Yes, I meant "aversion" (which doesn't need a "d," if we're going to nitpick spelling on a Talk page!) I think that whatever you believe on the merits, comparing Mises and Hayek to chimpanzees at a typewriter is a bit of a stretch. In terms of the genetic fallacy in the context in which you applied it, is isn't even probabilistically sound. --Christofurio 13:22, 25 April 2006 (UTC)

It's amazing to me how many inconsistencies and contradictions inherent in LTV you are willing to totally gloss over. So long as LTV helps you explain why the world should be socialist, you swallow it bait, hook and sinker. It seems that you decided, "the world should be socialist, therefore LTV has to be true", instead of "I think LTV is true, therefore the world should be socialist". I think you believe that employers are blood sucking bastards exploiting workers; Then you decided that socialism is the way to go, and since marx said "LTV is the truth", you defend LTV to the bitter end, no matter what. Kind of like religion. And they said socialists where not religious... :-) -- Dullfig 17:57, 8 March 2006 (UTC)

I think you've got it the wrong way round. You reject LTV because it's associated with Marx - even though Smith, Ricardo etc gave it credence.--Jack Upland 02:43, 10 March 2006 (UTC)

Oh, please! Ricardo and Smith where the first ones to try to explain what capitalism was. But make no mistake, they did not invent capitalism, it was happening all around them. They merely tryed to explain what was going on. They are by no means infalible, and their explanations are not the definitive answer of what capitalism is. Their theories are outdated. Period. You are using Smith as a straw man. Just because you can prove Smith wrong, does not mean LTV is right. Like I keep saying, read Ayn Rand's work. Much harder to disprove her theories. try it. -- Dullfig 07:31, 10 March 2006 (UTC)

I think you missed his point. He wasn't saying that Smith/Ricardo were infalible, or that they invented capitalism. He isn't using Smith as a straw man either -- he's hardly mentioned him. And Ayn Rand probably shouldn't get any space in the article, not being a respected economist (or even a respected philosophor, by objective standards). Cadr 18:26, 10 March 2006 (UTC)

I find it curious how so many people dismiss her off hand, without taking the time to read her writings... Dullfig 05:54, 11 March 2006 (UTC)

She's pro-capitalism and self-interest. She's got to be evil. Oh, and she's a woman. We can't stand a woman being more intelligent than us. RJII 06:02, 11 March 2006 (UTC)

Don't be so absurd. First, I have read a little bit of what she's written, and I'm quite familiar with sympathetic second-hand descriptions of her ideas. In other words, I'm probably as familiar with her cannon as you are with comparably significant left-wing thinkers (e.g. Baukinun). Second, it's very silly to suggest that people dismiss her because she's female. Unfounded accusations of sexism/racism/whatever make it impossible to have any kind of sensible discussion.

Having said all this, I think it's worth pointing out again that whatever your opinion of Rand's work, she is not generally very well respected as a philosopher or political thinker -- at least, not amongst other philosophers and political thinkers. She has been quite strongly criticised even by prominent libertarian intellecutals (see for example [4]). All of these facts together suggest that she shouldn't get too much attention in this article. I was a little too strong in my previous post. There should probably be one or two sentences outlining her views on LTV.

If anyone can show that her views on LTV (and the alternatives) have had a significant impact on peer-reviewed literature within economics and political philosophy, I'll be very happy to change my mind. Don't bother trying to convince me that Rand was right, because that's not the editorial standard used by Wikipeida. Cadr 18:18, 13 March 2006 (UTC)

I suppose the fact that Alan Greenspan wrote a couple of chapters for her book Capitalism: the Unknown Ideal, and that he subscribed to the Objectivist theory of value, doesn't cont.... Dullfig 23:15, 14 March 2006 (UTC)

It counts, but not for very much. It makes her (by Wikipedia's standards) less significant that thousands of economists/political philosophers who've published original research in peer-reviewed journals, and who have had a traceable influence on economic thought. As I said, a few sentences on her views would be fine by me. Do you want to have a paragraph or more? Cadr 00:11, 15 March 2006 (UTC)

A paragraph would be fine. -- Dullfig 01:22, 15 March 2006 (UTC)

Well, don't let Christofurio hear you say that - it's the re-emergence of the dreaded genetic fallacy!--Jack Upland 21:50, 11 March 2006 (UTC)

Yes, that darned Vulcan logic. And my ears are so big! Calm yourself, Doctor McCoy. --Christofurio 13:51, 26 April 2006 (UTC)

It's the invasion of the big-eared monkeys*!!! I knew the time would come.--Jack Upland 11:03, 28 April 2006 (UTC)

[*Acutely hearing pedants please note: I am well aware that chimps aren't monkeys!--Jack Upland 11:19, 28 April 2006 (UTC)]

Corn Law Edited

„Corn Theory“ – Corn Law is something else.

As stated above, I think this section is pretty stupid. But it is so much more stupid if this rather simple point is loaded down with unnecessary argumentation. I have deleted a long section of pro-Marx verbiage which adds nothing and is not directly related to corn!...

It is related to the previous sentence:

„Since neither corn, iron, nor coal could be said to be common to all commodities, this critique may appear flawed.“

The point of this section is, that there is no physical difference in the production process between a worker and corn, therefore no basis for a special LTV, a cornTV could do it also. What I wanted to point out with the help of A. Freeman is, that the difference is, that corn is owned by capitalists, whereas labour power is owned by free workers, who are free to sell this labour power and forced to sell this labour power at a wage, which is so low, that they cannot buy back all products produced. This is the basis for exploitation and - assuming that the capitalists do not cheat on each other - the basis for an exchange of commodities according to labour time – as a first approach, see transformation problem. The sentence in the article of Marx about „labour being the social substance of value“ will not convince many without further comment.

...Deletion of this comment, however, needs some justification:

However, due to automation labor power also is not necessarily common to all commodities.

Firstly, this is wrong. Automation is just an increase in labor productivity - it does not remove labor from the process....

How do you explain unemployment?

... (If you don't believe me, think of a product produced with zero labor.) In fact, automation and mechanisation in general has historically borne out the LTV by delivering cheaper products.

If in a branch no labour is used anymore due to full automation, no value is created in that branch. However, due to the tendency for equalisation of profit rates, there is also in this branch profit and a profit rate, because surplus value is transferred from those other branches which still use labour. Only if in all branches there is full automation, absolutely no value is created and the rate of profit therefore zero, see Marx’s Grundrisse.

Secondly,the point (if true) that some products are produced with zero labor belongs elsewhere (perhaps in the list of problematic issues). It has nothing to do with the corn law.

(Again „corn theory“) It has something to do with the wrong statement quoted above that an essential difference between labour on the one hand and corn, coal, steel etc. on the other is that labor is directly involved in the production of all other products whereas corn, steel, coal are not. This is not an essential difference.

Thirdly, as stated above, we cannot keep adding arguments and counter-arguments indefinitely. Particularly in such a trivial section.--Jack Upland 09:43, 29 March 2006 (UTC)

If arguments are allowed, which are not more than thirty years old, then there will be some adding of further arguments. Furthermore, I did not add an argument, but replaced one („uncultivated labor“) by another („automation“). I added a comment to explain in more detail the special role labour power has as „social substance of value“ in distinction to other means of production, which according to this section technically do not differ from labour.

Finally, if in the introduction the subjective value theory is explicitly mentioned, there should be a remark about the role subjective or use value plays in Marx’s LTV and possibly labour values in the subjective value theory, also to clarify the ideological background of the two theories. Alex1011 20:53, 30 March 2006 (UTC)

I wish you hadn't written responses in my text - it makes it hard to follow!

Corn Law - I was thinking of Law of Value. Sorry.
I see how you relate your argument now - but the connection wasn't made clearly in the text.
The fact remains, however, that corn is not common to all production so it is not true to say there is "no physical difference". Even if wrong, the LTV is coherent, stating in its simplest form that economic value is proportional to labor input - all other inputs being reducible to labor input. The corn theory is not coherent as all inputs are not reducible to corn input, and it is not possible to entertain the idea that the price of any good is related to the amount of corn in it!
A corn theorist could respond to your presentation of the issue by saying small corn farmers are in the same position as laborers. They are forced to sell their corn at a lower price etc. Labor, however, isn't just another commodity. A worker is a human being. In a human economy, the human involvement in the process - which is what labor is - is not incidental. It is fundamental.
Raising the issue of unemployment is a non sequitur. Mechanisation leads to greater labor productivity, which can lead to unemployment. Not an issue.
Automation as discussed by you is not an issue here as it is not presented as in conflict with the LTV. If, on the other hand, you asserted that some products were produced with no labor input at all in the process, you would have a case against LTV (but you'd be wrong!).
Of course, I don't object to arguments being included, the issue is with appropriate length and placement.--Jack Upland 01:02, 31 March 2006 (UTC)

Remarks:

The corn theorists say that corn is used to produce all other goods, directly and indirectly. Directly, if you produce bread, indirectly, for instance, if you need labor to produce steel, but bread to “produce” labor. The conclusion is then, that mathematically there is no difference between the reduction of all commodities to the amount of labor needed directly or indirectly to produce them, or to reduce all commodities to the amount of corn (steel, coal etc.) needed directly or indirectly to produce them. Therefore any “basic commodity” like labor, steel, corn etc. can be used as a measure of value – according to the corn theory.

If a branch is fully automatised, then no labor is needed directly to produce the products of this branch. There is still indirectly labor needed to produce the robots which then produce the final products. In such a branch no labor value is created. However, due to the tendency of equalisation of rates of profit, surplus value is transferred from other branches, where labor is still used, into this fully automatised branch, so that this branch also achieves the general rate of profit (which falls the more automation in production spreads).

If all labor would be slave labor, but the producers of corn were for some reason only allowed to produce corn and nothing else, so that they have only their corn to sell to make a living, and all other means of production, including labor, are owned by the capitalists, then indeed a corn theory of labor instead of a labour theory of value would rule. I think this is the argument of Alan Freeman: That of all means of production only labor is not owned by the capitalists but by people of another class. This enables the capitalist class to exploit the working class by buying labor at its value and selling the final products at their value. And this is the reason, why labor values prevail and not corn values.

“Labor, however, isn't just another commodity. A worker is a human being. In a 'human' economy, the human involvement in the process - which is what labor is - is not incidental. It is fundamental.” Against this one might argue, that this is not a scientific, but a moral argument. There is no reason, why in a capitalist society human aspects should play a role in essential economic issues like value determination. Alex1011 20:21, 17 April 2006 (UTC)

But not all labourers eat corn and no one eats only corn! This is a simple unwillingness to face facts. The argument falls down at a basic commonsense level and should just be discarded.
All production is the result of the input of labour and materials. These materials in turn are the result of the input of labour and other materials. And so on. All production can be reduced to labour inputs. It cannot be reduced to corn inputs.
How is my statement that we live in a human economy - an undeniable statement of fact - a 'moral' rather than 'scientific' argument? I don't have a moral objection to the cornball theory, any more than I have a moral objection to the tooth fairy.
In our human economy, human beings are the ultimate producers and consumers. Human activity in this system is not just another commodity. Commodities come and go. For instance, we rarely use tin now. But this is incidental. Imagine the absence of people from the economy. It's impossible.
Slaves are not analogous to machines as you imply. Their creation is a natural process, not the result of the application of labour like manufacturing. In Marx's terms, slave labour involves exploitation as much as wage labour. The difference is that it is done all at once and externally, whereas in Marx's words the wage labourer sells himself piecemeal.--Jack Upland 23:01, 17 April 2006 (UTC)

YOU concede that if all workers would have to eat corn, then a corn theory of value can be assumed. Whether a LTV or a CTV can be assumed depends then on an incidental empirical fact.

YOU concede that if all production could be reduced to corn inputs, then a corn theory of value can be assumed. Whether a LTV or a CTV can be assumed depends then on an incidental empirical fact.

IMAGINE the absence of machines from the economy. It’s impossible.

My version of a LTV, in which free wage workers selling their labor power to the owners of the means of production is the basis for values measured by labor time, does not depend at all on the incidence of the empirical facts mentioned.

YES, I do imply that in a capitalist economy slaves are analogous to machines, that money spent on buying slaves is constant capital. It is an uncomfortable thought, but in the southern slave states of the US, there was commercial „breeding“ of slaves for the market (cf. America’s Revolutionary Heritage, ed. George Novack. This caused also conflicts between slave breeders and slave users. Perhaps an immanent contradiction of a „pure“ slave society.). Slave breeding involving a „natural process“ does not change anything, the breeding of horses or apple trees also involves natural processes. As to the LTV, the value of a slave, like the value of a machine, depends on the amount of wage labor directly or indirectly needed to produce a slave (waged overseers and so on).

This is often denied for moral, emotional, or humanistic reasons, or because of class war rhetoric. (In my opinion, morality, emotional life, humanity, or class war victory does not need a wrong version of the LTV, but some seem to think so.) The price to pay is a contradictory and inconsistent LTV. (Why can human beings produce value, but not trained monkeys?) Marx’s warning in his critique of the Gotha program, that labor is not a supernatural power to produce values, although mentioned in this article, was not understood.Alex1011 16:18, 22 April 2006 (UTC)

I think if it was impossible for anyone to work unless they had corn, then a corn theory of value would actually make sense (or CTV and LTV would be equivalent), so I don't see that as a big problem for LTV. Cadr 21:16, 22 April 2006 (UTC)

Exactly!

On the less important points:

The phrase 'incidental empirical fact' speaks volumes. The role of labor in a capitalist economy is not incidental. The analysis of capitalism based purely on logical and mathematical abstraction is a fallacy. Capitalism is a particular economic system existing at this point in history, not in the realm of universal metaphysics.
Since no one has put up a moral defence of the LTV, why is this being debunked? I think the LTV is a question of practical present-day reality - far removed from the bizarre fantasies of corn-based economies and trained monkeys.
Slavery is a vast topic, not particularly relevant here. But, no, I wouldn't class horses or trees as machines, because they are part of the natural world, not a creation of human labor. To reiterate, many natural things are vital to the economy but have little or no economic cost: sun, air, water etc. The point of the Gotha quote is that the natural world produces many 'use values' which are not recognised as 'exchange values' in the capitalist economy as they don't involve labor. The horse - or for that matter the metal machine - is not strictly speaking capital. The capital is actually the labor required to produce the horse. Labor and capital are essentially human relationships because, yep, we live in a human economy and so it will remain until the corn-fed monkeys invade.--Jack Upland 05:56, 23 April 2006 (UTC)

"Exactly!" maybe. But the corn theorists or the neoricardian school, as they are also called, never claimed, that the Labor Theory of Value is wrong. What they simply claim, is, that not only labor, but any "basic commodity" can serve as a measure of value. A "basic commodity" is defined as a commodity necessary to produce all other commodities at least in one stage of the production process of that commodity. Then, with the help of "abstract mathematical models" one can compute the values of each commodity according to the definition of Marx as the amount of that basic commodity necessary to produce this commodity. So you have a choice of labor, corn, coal, steel and so on theories of value (which might be all equivalent).

From this the Neoricardians conclude that Marx’s theory of exploitation does not make much sense, because not only the owners of labor power, but all the owners of any other basic commodity can claim to be exploited in the sense that the surplus product must be ascribed to all basic commodities, not only to labor (which technically is correct).

There are now two alternatives to respond. Either to remain in the neoricardian world, but simply deny, that besides labor power there are any other basic commodities. This is not a very propitious path, because on the one side, the status of labor as a basic commodity might be threatened by automation, on the other side, there are commodities like steel, oil and so on which can also claim to be a basic commodity.

The second alternative is, what I have described already, that all basic commodities are the property of the ruling class except one: labor power, which must be bought from the working class. This is the basis for exploitation and for the LTV. To make this point clearer I mentioned unfree slave labor, which according to this reasoning cannot produce value, because slaves are not free but – like machines, coal, steel etc. - property of the ruling class. Alex1011 14:59, 27 April 2006 (UTC)

'...a "basic commodity" is defined as a commodity necessary to produce all other commodities ... So you have a choice of labor, corn, coal, steel and so on...'

Well, this returns to the complete non-sequitur which started this discussion. What you and the other corn-worshippers (or neo-Ricardians, if you prefer) fail to acknowledge is that the initial premise is incorrect. Neither corn, coal, nor steel are necessary to produce all other commodities, though labor is. Moreover, mechanisation - of which automation is an aspect - makes commodities cheaper. As discussed this is explained by the LTV - it is not explained by these substitute theories...--Jack Upland 11:16, 28 April 2006 (UTC)

It is you, who is arguing in a neo-ricardian framework. The difference between you and other Neo-ricardians is that you claim that there is only one basic commodity, namely labor, thinking thereby to save the LTV, whereas other Neo-ricardians would claim, that besides labor there are other basic commodities. Thereby they question the importance of the LTV and the consequences Marx drew from it. A corn theorist, for instance, is a Neo-Ricardian, who claims that besides labor also corn is a basic commodity. Against this reo-ricardian reasoning some Marxists argue (who are then of course no Neo-ricardians), that it is the common social substance (see quote of Marx in the article!) and not the physical or technical "substance" that matters, for the rest see end of article.

In your "clarification" there was confusion between, first, a neo-ricardian point against the neo-ricardian corn theorists - the neo-ricardian counter-claim being, that only labor can technically produce all products and not corn -, and, second, an argument against Neo-ricardianism altogether. This second argument states, that it is the social substance that matters (see again Marx's quote!) and not the physical or technical substance, that Neo-ricardians take as a starting-point. Alex1011 07:47, 29 April 2006 (UTC)

I deleted the following from this section:

However, the same thing can said for labor; for example uncultivated land and clean air involve no labor but has value. Marx would respond that these things are not "social" but belong to nature which he explicitly excluded. But this seems to make his argument a form of circular logic: Only those material things which involve labor are commodities. Thus, automatically, labor is common factor for all commodities.

However, it has been reverted. My reasons were:

It interrupts the flow.
It duplicates material elsewhere (see Inapplicability section at end).
It's biased in that it puts words into Marx's mouth and then attacks him for circular logic.
In the example of "clean air" it confuses the concept of use-value and exchange-value, which ignores what has been explained in the rest of the article. To put it plainly: commodities are defined here are items exchanged and value here is monetary value. Clean air as such does not have monetary value. (Land values are discussed elsewhere.)
Finally, it's irrelevant. No matter how many objections of this kind are raised to the LTV, it still doesn't enable corn to be said to be as common to commodities as labour.

I submit that it should be deleted again.--Jack Upland 23:25, 4 July 2006 (UTC)

I agree with the delete. There are several these problem edits in this article. Our job in writing an encylopedia article is not to present the reader with a dizzying array of back and forth arguments, but to present the basics of the labor theory of value followed by a section of the criticicms that should be able to stand on their own for anyone who already knows whtat the theory is about (which hopefully they will from reading the previous portions of the article). We're not trying to decide if the LTV is right or real or true. (I fotgot so tign this at first --Cplot 03:38, 5 July 2006 (UTC)

Transformation problem (2)

I think this section needs a sumary paragraph at the begining, explaining in lay terms what the section contains. The information given is at the same time important, and dense. Most people will stop reading after they reach the first formula, skipping the section altogether (Infinity0 probably doesn't mind if no one reads it ;-). -- Dullfig 17:21, 24 March 2006 (UTC)

This issue has been discussed before:

I have already summarised the issue (in one sentence).
But people keep adding to the section, expanding it even further!
There is already a separate and very long article on the topic!--Jack Upland 01:20, 26 March 2006 (UTC)

After consideration, I propose that this section be cut down to a couple of paras. There's no point in duplicating the separate article. Any seconders??--Jack Upland 05:44, 17 April 2006 (UTC)

Proposed new MOP summary

This proposed section is to describe the way value of means of production (constant capital, capital goods) enter into the value of finished commodities. This is merely a first draft and requires citations before it could be moved over to the article, but this gives a sense of where I expect to take the article.

LTV and the labor process^[1]

The value of a commodity increases in proportion to the duration and intensity of labor performed on average for its production. Part of what the LTV means by socially necessary is that the value only increases in proportion to this labor as it's performed with average skill and average productivity. So though workers may labor with greater skill or more productivity than others, these more skillful and more productive workers will thus produce more value through the production of greater quantities of the finished commodity: each unit still bearing the same value as all the others of the same class of commodity. By working sloppily, the unskilled workers may drag down the average skill of labor, thus increasing the average laobr time necessary for the production of each unit commodity. But this unskillful workers cannot hope to sell the reusult of their labor process at a higher price (as opposed to value) simply becuase they have spent more time than other workers producing the same kind of commodiies.

However, production not only involves labor, but also certain means of labor: tools, materials, power plants and so on. These means of labor — also known as means of production — are often the product of another labor process as well. So the labor process inevitably involves these means of production that already enter the process with a certain amount of value. Labor also requires other means of production that are not produced with labor and therefore bear no value: such as sunlight, air, uncultivated land, unextracted minerals, etc. While useful, even crucial, for the production process these bring no value to the process. In terms of means of production resulting from another labor process, LTV treats the magnitude of value of these produced means of prdouction as constant througout the labor process. Due to the constancy of their value these means of production are referred to, in this light, as constant capital.

Consider for example workers who take coffee beans, use a roaster to roast them, and then use a brewer to brew and dispense a fresh cup of coffee. In performing this labor, these workers add value to the coffee beans and water that comprise the material ingredients of a cup of coffee. The worker also transfers the value of constant capital — the value of the beans; some specific depreciated value of the roaster and the brewer; and the value of the cup — to the value of the final cup of coffee. Again, on average the worker can transfer no more than the value of these means of labor previously possessed to the finisehd cup of coffee^[2] So the value of coffee produced in a day equals the sum of both the value of the means of labor — this constant capital — and the value newly added by the worker in proportion to the duration and intensity of their work. Often this is expressed mathematically as:

c+L=W

,

where

$c$ is the constant capital of materials used in a period plus the depreciated portion of tools and plant used in the process. (a period is typically a day, week year or a single turnover:meaning the time required to complete one batch of coffee, for example)
$L$ is the quantity of labor time (average skill and productivity) performed in producing the finsihed commodities during the period
$W$ is the value of the product of the period ( $w$ comes from the German word for value: wert)

Note: if the product resulting from the labor process is homogenous (all similar in quality and traits, for example, all cups of coffee) then the value of the period’s product can be divided by the total number of items (use-values) produced to derive the unit value of each item. ${\begin{matrix}w_{i}={\frac {W}{\sum uv}}\,\end{matrix}}$ where $\sum uv$ is the total items produced.

The LTV further divides the value added during the period of production, $L$ , into two parts. The first part is the portion of the process when the workers add value equivalent to the wages they ar paid. For example, if the period in question is one week and these workers collectively are paid $1,000, then the time necessary to add $1,000 to — while preserving the value of — constant capital is considered the necessary labor portion of the period (or week): denoted $NL$ . The remaining period is considered the surplus labor portion of the week: or $SL$ . The value used to purchase labor-power, for example the $1,000 paid in wages to these workers for the week, is called variable capital ( $v$ ). This is because in contrast to the constant capital expended on means of production, variable capital can add value in the labor process. The amount it adds depends on the duration, intensity, productivity and skill of the labor-power purchased: in this sense the buyer of labor-power has purchased a commodity of variable use. Finally, the value added during the portion of the period when surplus labor is performed is called surplus value ( $s$ ). From the variables defined above, we find two other common expression for the value produced during a given period as:

c+v+s=W

and

c+NL+SL=W

The first form of the equation expresses the value resulting from production, focussing on the costs $c+v$ and the surplus value appropriated in the process of production, $s$ . The second form of the equation focusses on the value of production in terms of the valued added by the labor performed during the process $NL+SL$ .

Proposed new TP summary

(To replace the existing section which is way too long for this article: with proposed section heading) It still needs citations, but its a start.

The relation between values and prices (and the transformation problem)

One issue facing the LTV is the relationship between value quantities on one hand and prices on the other. If a commodity's value is not the same as its price; and therefore the magntudes of each likely differ, then what is the relation between the two (if any). Various LTV schhols of thought provide different answers to this question. For example, some argue that values act as a center of gravity for prices. As counter-intuitive as this may seem to those accustomed to neoclassical price theory, some empirical evicdnce suggests values are a better predicter of empirically recorded prices than prediction by any other means‹The template Talkfact is being considered for merging.› ^{[citation needed]}.

However, other schhols within LTV expect, at least conceptually, that prices are more strongly influenced by an equalization in the rate of profit. The equalization in the rate of profit combined with the application of different proportions of means of production and labor-power in various industries implies thatt the price of any given commodity will often diverge significantly from its value. The demonstration of the relation between commodities' unit values and their respective prices is knows as the transformation problem or the transformation of values into prices of production (in Marx's terminology). The transformation problem has probably generated the greatest bulk of debate about the LTV, even originating as early as Smith's work. The problem with transformation is to find an algorith where the magnitude of value added by labor, in proportion to its duration and intensity, is sufficiently accounted for after this value is distributed through prices that reflect an equal rate of return on capital advanced. If there is an additional magnitude of value or a loss of value after transformation comapred with before then the relation between values (proportional to labor) and prices (proportional to total capital advanced) is incomplete. Various solutions and impossiblity theorems have been offered for the transformaton, but the debate has not reached any clear resolution.

That's a start anyway. I think we also need some elaboration before this on the role of means of production or constant capital in forming the value magnitude of a commodity. --Cplot 06:13, 5 July 2006 (UTC)

External links

I question the value of having an external link such as the "Disproof of the LTV" (relabelled by me as "Critique...) because it undoes so much of the work of the article by retailing a list of fallacies, including:

That the LTV denies supply and demand,
That the LTV denies the "value" of nature,
That the LTV implies that a lazy/unproductive worker creates as much value as a productive one,

etc All these objections are succinctly dealt with in Marx's Value, Price & Profit and indeed by this article. So why refer readers to such inferior material?--Jack Upland 00:49, 14 May 2006 (UTC)

Because Marx "deals" with them in a totally nonsensical way. Salvor Hardin 05:41, 15 May 2006 (UTC)

How much of Marx have you read? But regardless of how nonsensical Marx is, it makes no sense to present a critique of his theory without referring to what he actually says - and even worse to present objections without acknowledging Marx's previous responses to these. It is very easy to present your opponent as wrong and even nonsensical when you refuse to acknowledge anything he says!--Jack Upland 23:57, 20 May 2006 (UTC)

PS I've written a blow-by-blow demolition of this supposed 'disproof' which is available to whoever's interested (!)--Jack Upland 10:17, 1 June 2006 (UTC)

Proposed reorganization

I was just browsing this article and thinking about it in terms of an average encylopedia reader and I think it falls short on that count. I doubt this is anyone's fault, but just the result of many edits without stepping back and looking at the full article. The lead section, I don't think does much to clarfity what the labour theor of value is about. Then the rest of it jumps into a defensive posture like the section entitled "The justification of the theory".

Lead Section
Changing concepts of value in the LTV (this section will differentiate the erm 'value' as it's commonly understood from the term 'value' as it's deployed in LTV which seems to be a big source of confusion over LTV)
1. price
2. use-value, exchange-value, price, value
Implications
1. Distribution (Ricardo / Sraffa's invariable standard of value)
2. Exploitation
3. Alienation
The theory’s development
1. Marx on Aristotle
2. Pety, Franklin and Smith
3. Ricardo and his critics (including Bailey's corn theory of value and collasping labour and labour power)
4. Marx and his critics. (Discuss Marx's consideration of Ricardo and his critics and his attempts to address those criticisms)
  1. Wagner
  2. Böhm-Bawerk’s critique
  3. Problems in transforming values into prices (e.g., Bortkeiwicz)
Modern Criticisms (I'm not sure the current ones stand very well on their own right now. They're more like "see also's" than criticisms, but I think we should keep them until something better can be written)
1. Menger's Critique
2. Applicability of LTV
An alternative interpretation (I'm not sure if this has a place here. It may be more appropriate in another article)

I think it's important for the article (especially such a controversial one as this one) to include criticisms, but I think they should primarily have their own section. It only confuses novice readers to have a back and forth argument going on in the main body of the article. Likewise I think the criticicms and their own section can be just left to stand on their own without further back and forth. The problem with the article as it now stands is that it includes this debate way too much and way too finely grained. Any other suggestions? --Cplot 19:26, 4 July 2006 (UTC)

As I said before, the Transformation Problem already has its own article, and I don't think we need to go into it in such great detail. I added the Justification section not out of defensiveness, but for clarity's sake. You must explain why anyone holds/held this theory. The fault with earlier versions of the article is that they plunged straight into discrediting the LTV without considering this.

I think the Implications section should fall later in the piece and be tied to the historical development of the theory and Marx's contributions (exploitation, alienation). There's a tendency for anti-LTVers to shift the argument to talk about the notion of exploitation, but this really is another topic and belongs in another article.--Jack Upland 22:53, 4 July 2006 (UTC)

I didn't mean to suggest the section is inappropriate or porrly written. Just that the heading for the section is too defensive. Clearly there are detractors for the labor theory of value, and their views can be presented in the criticism section. But I think the very first should start out boldly stating what the labor theory of value is. Rational and empirical supports for the LTV could follow after that.

Manual of Style edits

I began making some stylistice changes to the article. I introduced the ref element <ref>. If anone's unfamiliar with these wiki elements they basically allow notes to be entered in the body of the text making maintenance of the article easier. A footnotes section is automatically generated from those ref elements. If you click on the edit link next to the Notes section you will only see "<references>" in the edit window. By clicking on the up arrow next to each note you can jump to the section of the article where the note would be edited.

I also tried to make sure there's a reference for each note (arranged alphabetically by author last name) and tried to complete some of the missing bibliographic information. Please help check these references and add any missing information. Per Manual of Style recommendations it would be helpful for anyone adding a not to add the source to the reference list and if removing the last note citing a reference move the reference to the "External links" section. Unfortunately Wiki doesn't automatically manage these tasks yet.

Finally I removed some of the sentences that represent back and forth argument within the text. The best way to present criticicms is enter them in the criticism section. You'll have the last word in the article. The crticicms can also be read more coherently than just as points scoring against one or antoher disjoint sentence in the article. Readers will have a much easier time understaning the main agruments and the criticims in this way. --Cplot 01:19, 5 July 2006 (UTC)

Extracted pieces for criticism section development

As I mention above I think a high priority is in providing a place for coherent criticims that don't detract from the explanations within the article. To start the discussion, here's some suggestions for the modern criticisms section drawn from what's currently in (or not in) the article.

"Socially necessary" ambigous and subjective

Robert Nozick, however, has criticized the qualifier "socially necessary" in the labor theory of value as not well-defined and concealing a subjective judgment of necessity.

Critic of Böhm-Bawerk

My sense is this only contributes to the back and forth and we should just let the criticisms stand on their own without further rebuttal. They may however point out weaknesses in tthe article that could use improvment (or simply the LTV itself in which case we're done with the article)

Critics of Böhm-Bawerk argue that workers in fact face more risks, including injury and job loss, and have less ability than an entrepreneur to diversify and minimize risk, having only their labor power as an asset.

This sentence was contributed by me in order to summarise the criticism of the criticism. I totally understand your argument about the back and forth, but I think that that we do need some response to B-B.--Jack Upland 10:03, 28 July 2006 (UTC)

A new corn theory criticism

There may be a new corn theory criticism out there, but if there is I haven't seen it. I think as it stands now this simply violates the original work policy and needs much more support than what's been provided. The "corn theory of value" criticism dates from about 1830, is considerred within Marx's treatment of value theory and no one has yet offered any new criticims of Marx's work (that I'm aware of) except to simply restate the oritignal criticism as Bailey applied it to Ricardo's LTV. My disclaimer here is "as far as I'm aware". I think something could certainly be in print that I haven't come across. That's the great part of this collaboration we call wikipedia. (this is the only piece I deleted from the article).

However, the same thing can said for labor; for example uncultivated land and clean air involve no labor but have value (usefullness). Marx would respond that these things are not "social"‹The template Talkfact is being considered for merging.› ^{[citation needed]} but belong to nature which he explicitly excluded‹The template Talkfact is being considered for merging.› ^{[citation needed]}. But this seems to make his argument a form of circular logic: Only those material things which involve labor are commodities. Thus, automatically, labor is common factor for all commodities.

As previously stated, I think the corny theory should just be deleted on the grounds that it is stupid.--Jack Upland 10:05, 28 July 2006 (UTC)

I understand what you're saying. I actually think it belongs in the historical portion before Marx. I think Marx considered it a serious criticism of Ricardo's work that needed to be addressed. The silliness is that after Marx addressed it it just simply gets regurgitated as if nothing else has been said about it (since 1830). Of course to cover up this fact the proponents like to suggest they came up with it. And the amazing coicidence is that the example they always come up with is "corn" which is exactly the example used by Bailey in 1830 and cited by Marx in the first chapter of Capital. I actually know of two contemporary economists who stopped speaking to each other because they disagreed on who among the two of them first came up with the "corn theroy of value" criticism. --Cplot 00:36, 29 July 2006 (UTC)

Steedman

One of the most important modern criticims of LTV is Steedman's work which is conspicuously absent in this article. I hope someone could write up sometihng on that (if I don't get to it). It's similar to Böhm-Bawerk, but it stands as the most significant criticism of the modern LTV.

extracted pieces from criticism sections (in favor of LTV)

In moving the criticicms to an appropriate section, I found these back-and-forth comments interspersed. Rather than have discussion within the article it would be better to establish these facts about LTV so that a reader comes to the criticisms with a relatively full understanding to judge the criticicms. I collect them here for as a reference for improving the main section of the article.

to Menger

Marx writes in response to this interpretation of the LTV:

This, however, would be a sad mistake. You will recollect that I used the word 'social labour,' and many points are involved in this qualification of 'social'. In saying that the value of a commodity is determined by the quantity of labour worked up or crystalized in it, we mean the quantity of labour necessary for its production in a given state of society, under certain social average conditions of production, with a given social average intensity, and average skill of the labour employed.^[3]

As said, I accept your criticism of the 'back and forth', however, as this is a common - and stupid - criticism, I think Marx's comment should be included somewhere.

to Böhm-Bawerk

Marx might respond that this did not contradict his understanding of prices, in which sectors of the economy which have higher "capital intensity" (greater roundaboutness) have higher prices (see below). The difference, it seems, between Marx and Böhm-Bawerk concerns perspective: for Böhm-Bawerk, roundaboutness explains entrepreneurial profits on the microeconomic level, whereas for Marx, a society-wide institutional explanation is needed. To him, roundaboutness explains only those profits of the more capital-intensive operations relative to less capital-intensive ones.

Critics of Böhm-Bawerk argue that workers in fact face more risks, including injury and job loss, and have less ability than an entrepreneur to diversify and minimize risk, having only their labor power as an asset.

Revision as proposed

As proposed, I redrafted the section on the "transformation problem" to make it a more appropriate size for the article and to bring it current with the topic as its understood today. also don't understand how the section entitled "An alternative interpretation" fits in the topic of the article, so I pulled that too. I'd like to move the corn theory of value selection hgigher up in "the development of the theory" section since this arose as a criticism of Ricardo that Marx treats in depth. I'll leave that for later.--Cplot 23:31, 10 July 2006 (UTC)

added disambiguation

I'm not sure how someone can be so confused about a topic and yet still jump in and start editing. TheIndividualist clearly was looking for another sense of the term value than the one used here. So to help stop that sort of confusion I added a link to the value page. Some of those topics are still stubs, so they could use some work. --Cplot 16:30, 29 July 2006 (UTC)

What does this mean: "Value in the labor theory of value is different than other uses of the term value, such as moral value, appraised value (potential price), price or usefulness. Therefore the assessment of a thing's value within the labor theory of value’s use of the term will likely differ from the other assessments of a thing's value according to other meanings of the term." ??? Why doesnt it just come out and say what value refers to in the LTV? TheIndividualist 16:32, 29 July 2006 (UTC)

The previous sentence gives an introductory statement of what the LTV understands value to mean. The reason for the subsequent sentence is because often stating what value meant in the LTV does not help readers understand that there are different uses of the term value. So it's important to add a more explicit statement of that with the sentence you're asking about. Even after that sentence, some will have incredible difficulty in understanding that value can be a homograph and a homonym for completely different meanings of the term (there is a footnote on that). Typically, many will think that value has to mean one thing. For some that's the usefullness of something (its use-value). For others it's the amount of money paid for something (its exchange-value). These are all different homographs for the term value used in the labor theory of value: which is the amount of abstract labor required to produce a commodity.

The reason the diamond-water paradox is a paradox is because Smith was trying to disambiguate these meanings. The puzzle for Smith was that if a commodity's value is determined by its usefullness (use-value), why are diamonds so expensive (exchange-value) and water so inexpensive. When clearly water is much more useful to us than diamonds are. This is how Smith moves the reader in the direction of the LTV — though Smith's rendition was early in the theory and had many logical and empirical problems. But for Smith the LTV helped explain the water/diamond paradox, becuase despite the usefullness difference, water took very little labor to acquire (in most enviorments) while diamonds took very much labor to acquire (on average). I hope that helps clear htings up. --Cplot 17:06, 29 July 2006 (UTC)

But Smith found exceptions to the rule so the rule was not valid. For example, two paintings can take the same amount of labor but command enormously different prices. So obviously, the LTV is not the correct solution to the paradox. TheIndividualist 17:10, 29 July 2006 (UTC)

The first sentence is incorrect: "The labor theory of value (LTV) is a theory from classical economics that understands the value of an exchangeable good or service as equal to the amount of labor required to produce it, including the labor required to produce the raw materials and machinery used in the process." It should say that "the value of a good is equal to how much labor for which it can be exchanged." There is a difference. TheIndividualist 17:13, 29 July 2006 (UTC)

Yes there is a difference, but you're referring to exchange-value., not value itself. The first sentence refers to value, you're proposed sentence refers to exchange-value. Those two terms along with use-value are all discussed within the context of the labor theory of value, but value without any qualifier is what the first sentence is intended to address.

Smith was one of many to rwite on the topic of the LTV. He's an important historical figure in the theory in the same way that Ptolemy is an important figure in the history of astronomical theories. However contemporary astronomy doesn't use terms exactly the Ptolemy did and neither does the contemporary LTV use the terms exactly as Smith did. --Cplot 17:24, 29 July 2006 (UTC)

Well, maybe we need to show the different definitions of the term. Not everyone defines it the same way. TheIndividualist 17:29, 29 July 2006 (UTC)

That is not the paradox. Smith said that the value of a thing is how much labor for which it can be exchange in the market. So it concludes that diamonds are more valuable than water. But, we all now water is more valuable to life than diamonds. So, there is a paradox. The theory of marginal utility resolved the paradox, by saying that value is not determined by how much labor it can be sold for but on how useful the first few units of a good are to a person. TheIndividualist 17:56, 29 July 2006 (UTC)

I don't think Smith referred to value as just the amount of labor for which a commodity can exchange. He talked both about labour commanded and labor embocied: but thought at least historically those were the same thing. The paradox doesn't apply to either of those things (not labor emboeied nor labor commanded), but to use-value. So it's the marginal theories of value that face the paradox. In what sense are the first few diamonds I use more useful to me than water?

Here too you have it backwards. For marginal theory, It's nt the usefulness of the first few items that determine how much value they have, but rather: people will keep consuming items until the usefullness of the next item (we're talking about the next item after the last few items) would be greater than the opportunity cost of consuming it (in other words, its exchange-value or price). So a person will continue buying diamonds until they assess the usefulness of another diamond would exceed the price they have to pay for it. The issue that marginal theory leaves unaddressed (except by invisible hands and Walraian auctioeers) is what determines that exchange-value or price in the first place: the price that exeeds my subjective assessment of its usefullness if I purchase another diamond. --Cplot 21:01, 29 July 2006 (UTC)

Water Diamond Paradox

I took a nother look at Smith. He doesn't even refer to it as a paradox, and I'd say it's not presented as a paradox, but more in the spirit of the confusion THeIndividualist is expressing with regard to value. Smith writes

<b.ockquote>

“The word value, it is to be observed, has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called "value in use"; the other, "value in exchange." The things which have the greatest value in use have frequently little or no value in exchange; and, on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce anything; scarce anything can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it. ”

To suggest that Adam Smith's "paradox" endorses the marginalist view, is bizarre. If they (the marginalist) were to claim (and I'm nost saying they claim this, but I get the sense ThIndividualist is claiming theydo) that value in use determines value in exchyange, rather than the strawman LTV where supposedly labor determines value in exchange (again, that's not the LTV it's a strawman LTV)., then they would have to explain to Adam Smith why something that has "scarcely any value in use" — a diamond — commands so much value in exchange. You can quote Encylopedia Britanica, but I think Wikipedia aims (and should aim) a little higher than that shill fodder. The point of those books is to be as heavy as possible so that they can be sold more ezsily.

Also the criticism section now mis-states the marginalist point of view. Their view is that the consumer consumes until the last unit consumed (not the first units) are considered just as useful as the money that the consumer has to part with to purchase that useful commodity. --Cplot 05:13, 1 August 2006 (UTC)

I'm glad someone else has read Adam Smith too. Also check out the Paradox of Value page!--Jack Upland 04:41, 6 August 2006 (UTC)

I've removed that section because:

a)Smith Rhetorically used Water/Diamonds to expound LTV.
b)The whole point was that water is useful and diamonds are expensive and LTV says this is so because the latter takes more labour to obtain, despite not being as useful.
c)Paradox of value has its own page and is not spoecifically directed at LTV as a problem (see discussions ad nauseum there).--Red Deathy 08:00, 15 August 2006 (UTC)

change in lead section

I added some more discussion distinguishing between uses of the term value and removed the strawman explanation from the Austrian school section of encylopedia britanica. The Austrian position belongs in one of the modern criticisms sections (if it belongs here at all, certainly not as the definition of the term in the lead section). --Cplot 18:25, 2 August 2006 (UTC)

I had to revert another change in the lead section, again tryin g to claim that the LTV is a labout theory of price. It cited a FAQ which actually disproved the assertion that LTV is a labor theory of price. I think it probably constitutes vandalism sincce the contributor did not even botherr to note anything here in the discussion page and we've been getting a rash of these bizarre edits lately. --Cplot 20:05, 3 August 2006 (UTC)

What do you mean? The FAQ says straight out: "The LTV is the theory that market prices are attracted by prices proportional to the labor time embodied in commodities. In other words, relative prices tend towards relative labor values." [5] Economizer 22:25, 3 August 2006 (UTC)

And David Ricardo said "The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not as the greater or less compensation which is paid for that labour." In other words the price or exchange value (the quantity of another commodity that it will exchange for) depends on how much labor was put into it. Economizer 22:35, 3 August 2006 (UTC)

I think you're trying to read the FAQ in the narrowest possible way to support a strawman definition of the LTV so that you can criticize it more easily. There are those who think that the price of a commodity will tend towards its value and that strain is discussed in the article. But even those I'm familiar with still understand these quantitites to be different (price and value). And they spend much of their research trying to understand the differences, similarities and corelations between them. This strain of thought is reflected in the article and perhaps it could receive mention in the leading section, but it violates NPOV policy to insist this is the only view.

As for the quote from Ricardo, he certainly took this view, but later moved away from it with his analysis of prices of production. Yet he never dropped his committment to the LTV despite ackowledging prices divereged from values. I don't have the source handy, but I know in an important letter Ricardo wrote in response to the practical empirical fact that prices and values diverge, he says something along the lines: "I can think of no other meaning for the value of something than the labor it took to produce it." I believe this quote is referenced in Sraffa's introduction to Ricardo's collected works. In any event prices cannot possibly diverge from values if they're the same thing as you seem to suggest. In addition, the FAQ you point to discusses prices of procution, so it too sees values as different from prices (or there's no reason to discuss prices of production and their relation to values).

I think Smith and earlier might have held to the LTV you speak of, but from the 19th century onwards the theory developed in a different direction. It would be like discussing hwo the universe revolves around the sun in an article on contemporary astronomy. Yes there may be adherents to this view. And yes historically there were certainly adherents to this view. And the article editors might want to discuss it somewhere in the article. But it should provide the basis to replace the lead section of the article. --Cplot 03:05, 4 August 2006 (UTC)

First of all you've convinced me that you're not acting in good faith, because twice now you've called my edits "vandalism." In your latest edit summary you said "this is to correct the vandalism." You know damned well that I did not vandalize the article. I'm providing sourced definitions and you're not. It looks to me like you're just making this stuff up off the top of your head. I am going to change it back until you can supply a source for your definition. Economizer 03:37, 4 August 2006 (UTC)

Need another source? "neoclassicists explained market prices not by reference to the differing quantities of human labor needed to produce assorted items, as in the theories of Ricardo and Marx, but rather according to the intensity of consumer preference for one more unit of any given commodity." -MS Encarta [6]

Again, you're trying to read these sources to support your argumen tthat has no support. Marx and Ricardo both explained prices by reference to values. In other words they explain prices by reference to the labor embodied in commodities. However, that's not to say that values and prices are the same thing. By your logic you'd have to say that for neoclassicists, market prices are identical to the intensity of a consumer's preference for something. That's not neoclassical economic theory. A consumer's preference ordering or cardinal utility are distinctly different from the prices a consumer pays: though neoclassical economic theory relates the two. SO you can keep pulling out quotation that don't support your view, or you can just admit you don't have any familiarity with this area of human thought and try to comprehend the article as it stands. It is not proper etiquette to simply jump into an article that has lenghty discussions an just change it to something else: especially when you don't have knowledge in this area of economics.--Cplot 05:06, 4 August 2006 (UTC)

Now you toss out another insult. Not only do you accuse me of "vandalism" but now you accuse me of having no familiarity with the subject. There is no way to have a discussion with someone as immature as you. Economizer 05:23, 4 August 2006 (UTC)

Let's start again

Let me appologize for the insults. I had felt insulted myself to see an article I'd work with others to improve simply altered without any discussion on this page. I should presume you meant no insult by that, and just overlooked the discussion page. I've done that myself at times in jumping in to improve an article. I never meant to suggest your view of the LTV isn't reflected historically. However, I think its difficult to find someone important in the theory who doesn't distinguish between prices and values: especially today. So I think there's room to present the theorists who advocated prices magnitudes identical with commodity value magnitudes (in fact I've tried to insert those where I thought it was relevant). But to wipe out a good portion of the lead section to insert only that view-point is counter-productive. I think it probably should get some mention in the lead section (currently it only shows up below that), but the lead section should reflect a broader understanding of the LTV in its contemporary form. Again, my appolgies, but this is a page that is frequently vandalized by those who simply want it to reflect some strawman position of the LTV. That's not to say your's is a strawman position, but its closer to the strawman position than many other strands of the LTV. Again, I welcome some dicsussion here about how to improve the lead section and incorporate important contemporary and historical views of the LTV. --Cplot 05:35, 4 August 2006 (UTC)

Ok, I'm glad you lightened up. I don't have any interest in presenting anything but what I believe to be accurate information. Let me tell you straight out that I am not familiar with Marx's version of the labor theory. But I am relatively familiar with Smith and Ricardo. And I'm relatively familiar with the subjective theory of value. I agree with most economists that the labor theory of value as an explanation of market prices does not work. The intro as it stands now is not very good. For instance it says that "value" in the labor theory of value does not apply to price. But that is exactly what it applies to, as the quote from Ricardo shows. It says that the exchange value (price) of any good is determined by how much labor went into producing it. If Marx does not think that amount of labor exerted determines market prices then he has a different labor theory of value. Economizer 05:49, 4 August 2006 (UTC)

I don't understand your latest edits. What are you saying that the distinction between price and value is for Ricardo and Smith? Economizer 06:33, 4 August 2006 (UTC)

Perhaps the lead section reflects heavily on Marx's influence on the LTV. Yet both Ricardo and Marx are the biggest contributors to this theory. And even Ricardo alters his view between publication of the different editions of "Prinicples". Within the first edition of "Principles" too, you can see Ricardo distinguishing bwteen market price, natural price (and even value though not as clearly). The correspondence between Ricardo and Mlthus and others is where this really comes out as is discussed in Sraffa's work on Ricardo. In fact Sraffa's position (as the compiler of Ricardo's collected works) was that Ricardo's search for an invariable standard of valule was his way of linking the quantity of labor embodied in commodities to their price (again acknowledeging that their's a distinction between the two magnitudes).

Marx from the outset (by chapter 3 of capital; a work of over 100 chapters) makes the distinction clearly. Plus the 'transformation problem' that occupies so much or the work in value theory since Marx is all about the difference between value magnitudes on one hand and exchange-value magnitudes (in this case prices of production) on the other. So while Ricardo, Marx, Sraffa and many others discuss the relation between price magnitudes and value magnitudes, they understand those as distinct. Even Smith understands them as equal only in "the early and crude state of society”.

As for contemporary theorists, there's Anwar Shaikh, Fred Mosely and Paul Cockshott & Allin Cotreel who theorize prices as closely correlated with though not the same as values (in various ways). But I'm not familiar with any others in contemporary theory who take such a strong position as you're advocating. Can you provide some sources of contemporary thinkers who adhere to this view? --Cplot 06:39, 4 August 2006 (UTC)

I don't know of any contemporary thinkers who hold Ricardo's labor theory of value which says exchange value depends on the amount of labor put into a good. It is so obviously deficient in explaining exchange value. I am not claiming that anyone holds the labor theory of value. I'm just stating what it is. The labor theory of value, in general, is an anachronism. Economizer 06:56, 4 August 2006 (UTC)

Perhaps the edit I just made to the discussion page answers your question, but let me just reiterate. Smith in the Wealth of Nations rejects the idea that commodities exchange according to quantity of labor embodied in them: limiting that to only the "early and crude state of society" (sorry I don't have access to the book everything's in storage right now). Ricardo makes the distinction in chapter 4 of his Principles. But espeecially in response to criticisms of his book, in correspondence and in the alterations between the first and second editions of Principles' he draw out the distinction further. However in the end he asserts that despite the price of a commodity he adamantly declares that its value is the amount of labor that's required to produce it (that's again in a letter in the collected works of Ricardo). --Cplot 06:45, 4 August 2006 (UTC)

Ricardo is just saying there "accidental and temporary variations of price." He believes that in the long run, prices of goods resolve toward how much labor was put into producing them. Economizer 07:01, 4 August 2006 (UTC)

Let me also add that I've long thought the historical section of this article could be improved. I'd particularly like to show how early theorists such as Petty, Smith and Ricardo all grappled with these issues of use-value, exchange-value and value itself without coming to clear terms about the dis;tinction. That only came later with more recent theorists. But that should not diminish the important contributions they all made to the LTV (and even their critics such as Bailey and Malthus). --Cplot 07:11, 4 August 2006 (UTC)

One more thing about this accusation of independent researtch. I'm chasing down all thesee references to support the discussion in the lead section. And I suppose I could do this forever. But I'm hard prssed to come up with any source that supports your view. Not Ricardo, not Smith, not Marx and certainly no one I can think of since Marx. So if its a historical footnote you want to include in the lead section thats fine. But is there any contemporary advocate of the LTV that holds value is identical to or equal in magnitude to exchange-value or price? I can't think of one. So to me it constitutes original research to assert that value is identical with exchange-value or price (or its again just the strawman argument placed in th lead section so that it can easily be knocked down in the criticisms section). --Cplot 07:53, 4 August 2006 (UTC)

As I understand it, marx interpreted value as composed of the socialy necessary labor required to make an item, plus an arbitrary profit charged by the business owner, just because he can. Marx viewed the profit portion as constituting exploitation. So if you abolish profit, wouldn't the price of an item be equal to the labor required to make it? how can you say that LTV is not a theory of price? or am I misunderstanding you? -- Dullfig 17:59, 4 August 2006 (UTC)

No Dullfig you're misunderstanding Marx. For Marx the value as a magnitude is eual to the quantity of socially necessary labor time (not "plus an arbitrary 'profit' charged by the business owners"). However, for Marx the price of a commosdity was something else. Asi I've cited elsewhere on this page. So if its a LTV attribued to Marx it definitely doesn't say that price is equal to the quantity of socially necessary labor-time of the commodity being sold. --Cplot 05:19, 11 August 2006 (UTC)

Rmoved Original Research Banner

I rmoved the original research banner I think it was put on there prematurely. To add something like that you need to present a case here on the discussion page. I've responded diligently to your requests for more suppor. You have not provided one citation that supports your view of the LTV. The first heaeding of Ricardo's first chapter in his "Principles" was the closest thing at it only vaguely could be construed to support the arggument that value and exchagne-value are the same thing. Here's a quote from later in that same chapter that demonstrates Ricardo understood the difference:

Adam Smith, who so accurately defined the original source of exchangeable value, and who was bound in consistency to maintain, that all things became more or less valuable in proportion as more or less labour was bestowed on their production, has himself erected another standard measure of value, and speaks of things being more or less valuable, in proportion as they will exchange for more or less of this standard measure. Sometimes he speaks of corn, at other times of labour, as a standard measure; not the quantity of labour bestowed on the production of any object, but the quantity which it can command in the market: as if these were two equivalent expressions, and as if because a man's labour had become doubly efficient, and he could therefore produce twice the quantity of a commodity, he would necessarily receive twice the former quantity in exchange for it (Ricardo 1817).

I don't know if you've heard: Smith is obsolete. :) -- Dullfig 18:00, 4 August 2006 (UTC)

Use-value, exchange-value and value are different terms denoting different concepts in the LTV. Even as early as Ricardo who discusses all three in just the first chapter of his "Principles". Smith may make the mistake of collapsing the two at times, but as an early pioneer in the field we should grant him some lattidutde in the sense that he was exploring much new territory. The contemporary LTV owes a debt to Smith despite his occasional sloppiness. Yet even Smith discusses all three concepts, just not as clearly denoted as the later thinkers in the LTV. Such discussion is appropriate in the history section, but not in the lead section. You're welcome to add that there, but please first carefully read these sources you plan to discuss before changing the article. --Cplot 17:16, 4 August 2006 (UTC)

It is still original research because you're your own source. You're making footnotes but *you're* writing the footnotes and using them as a reference. You're pointing to sources but you're the one interpreting them and asserting that the sources are saying what you're saying, instead of providing direct quotes. Are you familiar with WP:OR? Economizer 19:20, 4 August 2006 (UTC)

"[Smith] disowns what is naturally thought of as the genuine classical labor theory of value, that labor-cost regulates market-value. This theory was Ricardo’s, and really his alone." (Albert C. Whitaker, History and Criticism of the Labor Theory of Value) [7] That is the standard labor theory of value. Labor determines exchange value or market price. Economizer 20:10, 4 August 2006 (UTC)
"The labour theory of value dominated the research agenda of economics for more than two centuries, from at least the time of Sir William Petty in the 1660’s until the 1870’s when Leon Walras, Carl Menger and William Stanley Jevons established the marginal utility theory of value. One generation of economists after another struggled to explain the price of commodities by the labour required to produce them, but nearly everybody saw errors in the work of their predecessors." (Peter C. Dooley, The Labour Theory of Value: Economics or Ethics?) [8] Economizer 20:30, 4 August 2006 (UTC)

OK, you're bringing up good points that belong either in the hitory section of the criticisms section. They should not lead off the article on the topic. Yes, the LTV deals with prices as the lead section and the article discusses. However, the LTv is first a theory of value. The article does already reflect the ideas that the LTV also explores the way value (or embodied labor) “regulates market-value“ or exchange-value. However in three paragraph's above you then jump to the conclusion that labor alone determines exchange-value which you won't find in Smith, Ricardo, Marx or any contemporary adherenet to the LTV that I'm familiar with. And you haven't yet named any contemporary (or historical) adherenets of the LTV who hold this vview. Your new edits should be moved to one of either the history section or the criticisms section. You can't jump inito history or criticisms until the conecpt itself has been duly explained. --Cplot 20:40, 4 August 2006 (UTC)

Economizer's new edits

quoting yoru new section “This contrasts with the subjective theory of value as an explanation for differing prices of goods, which says that value is determined by a good's ability to satisfy a want and its scarcity.” Ricardo himself discusses this verry topic (scarcity and desire in shaping exchange-value) in the his “Principles”. So again you're erecting a strawman artilce so that you can contrast it with your original research (which is only original in that it plagarizes Ricardo and then uses him as the strawman against which your article is contrasted). --Cplot 20:45, 4 August 2006 (UTC)

I noted that Ricardo found exceptions to his labor theory of value. But, he did not abandon it in favor of the subjective theory. The labor theory clearly cannot explain exchange value, the adherents to the labor theory tried for a long time. By the way, now you're getting nasty again, by claiming I'm plagiarizing Ricardo. Economizer 21:04, 4 August 2006 (UTC)

We're not talking about exceptions to his labor theory of value. We're talking about his theory of exchange-value where he always sees exchange-value influenced by value along with scarcity and desire for a commodity. He doesn't use the term LTV nor does he use the term subjectivist, because those terms are contemporary terms. But the contrast you make is completely contrived. You provide no supporting evidence from Ricardo that supports anything you say about his theory of exchange-value. BTW, are you saying that for the subjectivist theory, production conditions do not effect exchange-value. Because then I could see the contrast. But you should probably just contrast it with contemporary neoclassical economic theory that more people are familiar with, because neoclassical theory (like Ricardo) holds that both production conditions and scracity effect exchange-value. And you've gotten nasty by claiming an article that carfeully cites sources is original research while working on an article that cites no sources whatsoever (the subjectivist theory of value) --Cplot 21:26, 4 August 2006 (UTC)

Saying that I think you're engaging in "original research" is not accusing you of doing anything malicious or dishonest. It just means that I think you're drawing your own conclusions from things instead of referencing sources that draw those conclusions. I could be right or I could be wrong. Your statements may be referenceble or they may not be. If they're not referenceable than they shouldn't be here. I don't doubt that you're doing your honest best to try to interpret correctly. Don't accuse me of "plagiarizing." Plagiarizing means taking someone's words and claiming them as my own. If you think the subjective theory of value article is original research, then by all means put some tags up so we can verify things. This is how Wikipedia articles are improved. Please work with the process. Above all, don't think that the article will ever be stable even if a consensus is reached, because new people are always coming in and a new consensus has to be reached. If you worked on the ariticle before and got it the way you wanted it, great. But everything in this article will be erased and redone in another way over and over and over. It's very sysiphian. I look it more as a learning experience than anything else. If all my work is destroyed in time, and it will just as yours will, I really don't care. Economizer 21:56, 4 August 2006 (UTC)

It's not my work per se that I'm trying to proect. I understand how wikipedia works. However, this article and many artciles related to this are subject to very hoaky edits like the ones you've been trying to make. People want the LTV to be a certain strawman theory so that they can knowck it down. They have countless obsscure authors no one haw ever heard of to cite. Or they cite reputable suthors but construe them in ways that are entirely unsupportable (your quotation of the very first heading in Ricardo's ‘Principles’ comes to mind). Besides that heading, there's very little in the chapter that supports the ridiculous strawman position you accuse Ricardo of. The whole thing degrades the Wiki experience (for editors/contributors and readers alike). So I don't care much that my work is sacred or that my prose should not be touched. But this is an article I care to see held to decent academic standards. Whereas many people (who think the LTV is anacrhonistic) want to the article to serve some auxillary purpose.

So I welcome honest contributions from those who've read primary and secondary sources on the LTV. And I welcome contributions to the criticism section from those critical of the theory (those I'm less familiar with). But I don't support the view that the critics should be the one defining the theory to make their jobb of criticism easier. If one want to be a critic, then one has to take on the theory as it exists and as it actually developed; not as you wished it developed to make the job easier.

As for secondary sources the Dussel piece I cited is a good secondary source for Marx and his distinctions. For a secondary source on Ricardo I can think of none better than Marx himself who wrote held great respect for both Smith and Ricardo and wrote at length on both. The advantage of all those sources is they have full text versions online for free so they can be readily checked and the topics more thoroughly explored. The Wolff, Roberts. and Callari piece also is a good contemporary treatment of the LTV that maintains a clear distinction between price (or exchange-value) and value. Those are all in the reference list along with many others that support the view. You still haven't offered one source that supports your view. In fact, you admit you didn't even know the theory had modern adherents, which suggest you might not be in the best position to be interpreting these works. That's fine there are many articles on Wikipedia that I don't feel qualified to contribute to. In those cases, I simply enjoy the learning experience associated with reading and thinking about the article. --Cplot 01:04, 5 August 2006 (UTC)

My frustration is also fueled by your obvious disingenuine attitude. You're asking for unprcedented list of sources here on this article. Meanwhile the article you want this article to support (the subjectivist theory of value) has no sources listed. I don't care to plaster a template on that article because to me its just a hoaky article that's similar to something most wiki users would just post in their user space. The fact that its in the general space doesn't concern me. However, that you're happy to let that article go without a single reference while insisting this article add reference after reference after reference demonstrates that you're just messing around here (I doubt you're learning much of anything). --Cplot 01:08, 5 August 2006 (UTC)

I think the onus should be Economizer to produce a primary source (i.e. from an LTV theorist - Smith, Ricardo, Marx etc) to back whatever definition of LTV he supports. The problem with secondary sources is that - as Cplot has said - many orthodox economists do have a tendency to present a straw man LTV, often a tautology or a nonsense proposition (i.e. capital costs don't contribute to price). Finally I don't think it's necessary - or even desirable -to provide citations in the introduction so long as the introductory comments are repeated and supported in the body of the article as they should be.--Jack Upland 05:43, 5 August 2006 (UTC)

Smith, Ricardo, and Marx all had different but similar labor theories of value. Giving a source for Ricardo's labor theory of value is not going to be the same for Smith's, and so on. I think the definition at the top of the article is wrong. So I'm asking for a source. Every source I come across doesn't define it that way. They say it is the theory that value in exchange is determined by labor costs. Economizer 03:24, 6 August 2006 (UTC)

The primary sources are all different, so a single secondary source - written by someone who disputes the theory entirely - is going to be definitive??? That makes no sense!
Marx, whom all your sources will cite as a leading proponent of the LTV, specifically denied that labour costs were the determinant of value in exchange:

To determine the values of commodities by the relative quantities of labour fixed in them, is therefore, a thing quite different from the tautological method of determining the values of commodities by the value of labour, or by wages. [Value, Price and Profit VI]

My understanding is that Smith didn't recognise this distinction and therefore argued that the LTV wasn't fully operational under capitalism as it couldn't account for profits (i.e. the sum total of prices being higher than wages).--Jack Upland 04:52, 6 August 2006 (UTC)

The topic of the relation between valaues and prices is discussed at lenth in the article. That discussion draws on various sources. More vould be provided. There is not a major theorist of the LTV that does not discuss the difference between the value of a commodity and its exchange-value. Thos two things cannot be the exact same thing and still talk about the difference. Smith called it labor embodied v. labor commanded. Ricardo calls it value v market price. Marx calls it value (in itself) v. exchange-value. Any major proponent of the LTV discusses at some poin the difference between exchange-value and price on one hand and value (as the magnitude proportional to the labor required to produce a commdoity) on the other hand.

Let me draw from the same analogy I drew before. Neoclassical economic theory argues that prices depend upon the technology, endowments and preferences of economic agents. However you cannot skip the first steps and say that technology, endowments and preferences are all the same as prices. If you could you might say that neoclassical economic theory argues that the price of a commdoity is determined by one's preference for it. So if I really like generic coloa, I pay much more for it than coca cola. This is a mischaracterization of neoclassical theory becausee it collapses prices into preferences and does not maintain them as two distinct entities each effecting the other.

Finally, on the sources you provided.. The Ernest Mandel page does nott support your argument because Ernest Mandel was a caefeul student of Marx an understand that exchange-value differs from value. It is not discussed on that page because that page is making a different distinction (betweeeeen use-value and exchange-value which is where Marx begins his disticntion too). The other page actually undermines your position be4cause it more solidly places Marx's theory as a LTV theory which means the LTV distinguishes between value and exchange-value as Marx did.

In any event, you need to do morre than just post lenghty articles on other websites. You need to establish where in the article you find support for your argument. I find it hard to believe your intentions are sincere in all this. You seem to simply want us to chase down source after source to see if this one finally changes the entire history of the LTV. You don't provide any contextual argument to back up what you're saying. The quotation never stand on their own; they always require context. The debates we're having here were appropriate for the early part of the 19th century: not the 21st. I am not aware of a single proponent of the LTV as it stands today who believes that the exchange-value of a commodity is equal to in quantity — let alone identical with in quality — its value. --Cplot 19:36, 6 August 2006 (UTC)

The labor theory of value is the belief that market prices are proportional to labor costs. The reason you can't find anyone who agrees with it today is because it is a bad theory. The amount of labor put into the production of a commodity can't explain why prices are what they are in a market economy. Just because few people, if anyone, agrees with it anymore doesn't mean that that's not the labor theory of value. Every source I come across defines it the same way. For example, "The labor theory of value says that, in competitive markets, commodities that can be produced over and over again exchange in the marketplace according to the amount of average quality work time it takes to produce them." ([http://mrzine.monthlyreview.org/yates011205.html Let's Put the Nature of Work on Labor's Agenda: Part Seven, by economist Michael D. Yates) Economizer 21:58, 6 August 2006 (UTC)

Every source you come across does not define it in the same way. The source you just gavve is the frist one that supports your view. However, the article is not addressed toward the intricacies of the theory, but is rather citing the theory to make some other point. Its written as a simplification or popularizing piece. I imagine if you had the author to speak with and you pressed him on it (asked him about the transfromation of values into prices of production and the tendency for profit rates to equalize discussed by Marx) he would explain that yes, "I was just simplifying". This sort of simplification of a theory is common in popularizing articles. Marx did it in his Value, Price and Profit. Neocclassical economics does it when they draw horizontal demand curves for the firm. And this piece you've cited does it to avoid getting into all of the complications involved when exchange-values deviate from values.

Either way its fine if you want that view reflected in a subsection of the article. Feel free to write something. I tried to cover some of that in my discussion of the relation of prices to values. If you want that section to say that Michael Yates believes the two are identical in quantity and quality you're welcome to add that (though again I think you're just trying to find sources to quote out of context and be pedantically unfair to).

Also I find it ironic for you to say that no one believes in the theory today and then cite a source form 2005 about the belief in it (as well as some of the other contemporary pieces you've cited that don't support your “bad theory” view). Just because you're unfamiliar with a body of literature does not mean it doesn't exist. Please take the time to read this article here at Wikipedia. Then with the knowledge you gain from reading this article, go read Smith and Ricardo and above all Marx. Read some of the contemporary sources cited in the article. You'll see that not only is the LTV not what you think it is, its also not a “bad theory” to use the technico-logical terms from the field of deductive reasoning :-). The theory you think is a bad theory has not actually been held by anyone you're ascribing it to. Good luck with that learning process.. --Cplot 22:28, 6 August 2006 (UTC)

Even if Smith, Ricardo, or Marx didn't subscribe to belief that prices are determined by labor costs, the labor theory of value is still what it is. It is the belief that prices are determined by labor costs. In fact there are arguments around that none of them subscribed to the labor theory of value. But that is not a denial of the commonly accepted definition of the labor theory of value. We can't do "orginal research" here. We have to use the standard definition. You need to look at Wikipedia like a learning process, rather than assuming that you know all there is to know, because obviously you don't. And you need to pay mind to the rule against "original research." Economizer 05:40, 7 August 2006 (UTC)

I think this debate is getting pointless. There are different forms of the LTV but they all connect price to labour in some way. 'Value' is only a theoretical construction, it should be borne in mind: the only things that exist in the real world are price and labour. My objection is to the definition of labour as labour costs (i.e. wages). The LTV was first explained in terms of independent producers (hunters, farmers etc), not wage labourers. Market prices (or exchange in barter) are theorised as proportional to labour itself (i.e. the amount of work). Having said that, I understand that Marx's LTV is a lot more sophisticated than saying price=labour. This is, however, the starting point for his theory. I don't think Marx's distinction between value and exchange-value is particularly helpful. As I understand it, it only refers to absolute v.s relative amounts of labour. And it confuses the hard distinction between use- and exchange-value.--Jack Upland 07:30, 7 August 2006 (UTC)

"Labor costs" doesn't mean wages. It simply means the amount of labor necessary to produce an item. Adam Smith held that the cost of everything was labor. Economizer 03:47, 8 August 2006 (UTC)

If that is what you mean, I don't have a problem with what you're saying essentially; it's just ambiguous, in that 'labour costs' can mean wages. Marx for one made a distinction between the 'value' created by labour and the 'value of labour' (i.e. the labour necessary to sustain the labourer - i.e. wages). They're not the same thing: a person can often produce more than is necessary to provide for him or herself.--Jack Upland 05:37, 9 August 2006 (UTC)

Original Research != citing sources from the field of knowledge on a topic

Economizer, now you're saying that forget the entire history of the LTV. Rather just accept what you say it is. Now you've twisted around the original research rule to say if an article cites the significant theoriests for the LTV it is original research. If it just accepts what Economizer says is the standard definition (despite the fact you only provide sources that undermine your position) then that's not original research. You've got it all backwards again. --Cplot 22:43, 7 August 2006 (UTC)

idea for a new section or even a new article

Economizer you gave me this idea. How about a section where we say:

The LTV also refers to a theory that has no proponents and a theory no one has ever aehered to. Rather this LTV is simply a strawman argument for those dabbling in economics to have a foil to fight against. It is typified my misquoting particular giants in the field of political economy, drawing statements out of context, and then showing how ridiculous those statements now appear. Typically this LTV, which has never had a single propoment (only oponents), understand the prices of commodities to be proportional to, equal to or — in its most extreme strawman role — identical with the labor required to produce them.

References

(Note: since no one actually adheres to this view, we list here only references for the economists whom embarass themselves by promoting this nonsense.)

Wrong. There are actually people who have a similar view. Here's a source right here: What Was the Labor Theory of Value? Donald F. Gordon, American Economic Review, Vol. 49, No. 2, Papers and Proceedings of the Seventy-first Annual Meeting of the American Economic Association (May, 1959) , pp. 462-472 [9] The author says, "This paper will establish, or at least affirm, two points; first - based mainly on accepted interpretations - that no major economist of the classical period held what would, by modern usage, be called a labor theory of value...By the modern meaning of the phrase "theory of value," the labor theory of value is presumably the proposition that commodities exchange at ratios that are reciprocals of the quantities of labor involved in their production." Note that this is yet another source that defines the labor theory of value as I have been defining it. You have provided no sources whatsoever. You're conducting original research. Economizer 02:27, 8 August 2006 (UTC)

The article you cite probably doesn't address this but we can add it from other sources. So to paraphrase for contemporary LTV: “no major economist of the current period held what would, by [the strawman LTV], be called a labor theory of value [by starwman stawman LTV theorists] ”. The author's use of the term modern is unfortunate, because it neglects all the modern theorist of a LTV that don't use the strawman definition you propose for both classical and contemporary theorists of the LTV. So again you keep producing articles that support my view and not yours and then wanting to go change the article to the nonsense you've just shown as nonsense. I keep checking the calendar to see if this is April fool's day. This citation argues that no one has held the strawman LTV. Yet there are those histrocially and today adhere to something they call a LTV. So again that supports my suggestion for a new section based on the strawman LTV (SLTV). There we could describe all of the comical material your new source points to regarding the SLTV that apparantly is meant to bolster the egos of modern commentators on the SLTV. Personally I think your discovery belongs in another article all its own, but if you want to include it here as its own section I would welcome that. That's an excellent source in support of your new article. -- Cplot 03:50, 8 August 2006 (UTC)

If a modern theorist calls his theory a "labor theory of value" that's fine. But would be an idiosyncratic labor theory of value that does not accord to the labory theory of value as is commonly defined. Have you forgotten that the first sentence says "the labor theory of value is a THEORY FROM CLASSICAL ECONOMICS"? Economizer 03:58, 8 August 2006 (UTC)

No I haven't forgotten that LTV is a theory from classical economics. And through your diligent production of sources you've established that the classical didn't understand, in their LTV, that commodities exchanged according to their values (in other words, in proportion to the labor required to produce them). The article you produced above from the AER says: “We may reject, with great confidence, that they contain a labor theory of price” (Gordon 1959 p446). Now you say that if their are any modern theorists who follow the classicals in treating the LTV as a theory Not about commodities having exchange-values or prices equal to their values (or embodiedlabor) then those modern theorists should be dismissed as idiosyncratic. So the only thing left is what you're looking for in your vandalism: that only the opponents of the theory should define what it is. Even if you can find no one historically or today that ever advocated such a theory. Even better since its easier to win an argument that has no opponents (living or dead). This is all absurd! --Cplot 04:56, 8 August 2006 (UTC)

Cplot, though I agree with your point in general about the SLTV, I think you are taking the Transformation Problem too seriously. It's largely pedantry. Though prices vary due to supply and demand and the tendency of profits to normalise - note: it's only a tendency - prices are still roughly proportional to labour. Even mainstream economists acknowledge this implicitly when they talk in terms of 'costs of production' and 'normal profit'.--Jack Upland 05:44, 9 August 2006 (UTC)

Citing Sources

Economizer, you cannot just supply sources to claim this is not vandalism. The sources have to support the POV you want to inserrt into the article. However, I think the POV you're interested in inserting is already in the article if you read beyond the lead section. It may need further elabboration, but it only serves to confuse readers by not introducing them to values before talking about the relation between values and prices. Until you actually participate in the discussions here on the discussions page and act in good faith, I will continue to treat your edits as vandalism. I think there's much room for compromise here, but you first have to agree to participate faithfully in the discussions. --Cplot 05:15, 9 August 2006 (UTC)

I've supplied ample sources and have been engaging in ample discussion as anyone can see above. You have done nothing but be unethical, by engaging in personal attacks and calling my edits "vandalism" and asserting that I'm acting in bad faith. From this moment on I will have no more discussion with you. I am not going to have anymore discussion with someone as unreasonable and dishonest as you (such as calling my edits vandalism in edit summaries). You apologized for your attacks earlier but you've started it again. If anyone else wants to discuss things then I'm open to that, but not with you. Economizer 05:54, 9 August 2006 (UTC)

You have not discussed in good faith. You've produced citation after citation with no discussion whatsoever. The citation's you've provided either do not say what you claim they say or, in any event, you do not point out the specific ways that they support your view. That is not good faith. I am convinced by your attitude and your behavior that you're much more interested in showing how an endeavor such as Wikipedia cannot work than in contributing to that endeavor. I will continue to be diliegent to make it work. --Cplot 06:39, 9 August 2006 (UTC)

I want to reiterate a quotation from the source that Economizer provided so that he could change the article to read prices proportional to labor rather than values proportional to labor. The Gordon Piece in the AER reads: “We may reject, with great confidence, that they contain a labor theory of price” (Gordon 1959 p446). To repeat with the contextual information inserted: “We may reject, with great confidence, that [the classical theories of the LTV] contain a labor theory of price” (Gordon 1959 p446, context inserted). The quotation you give says: “This paper will establish, or at least affirm, two points; first - based mainly on accepted interpretations - that no major economist of the classical period held what would, by modern usage, be called a labor theory of value.” If you include the context here, the author means by the phrase “by modern usage“ is the term “value” not “labor theory of value”. In other words. they do not mean price. So just like so many of the sources you've thrown up here they support exactly the opposite position than the one you want the article to take.

This has been typical of the sources you've provided all along. You list a source usually without quotatin, but when you do quote something it still doesn't support your view. I go read the source to see what discovery you've made. And once again I find the source supports the aarticle as it stands and not the article as you (Economizer) want it to be. You may simply be misreading these sources. You may simply be googling madly and not reading at all. But your obstinate responses here suggest to me that you're simply throwing source after source at this discussion page to justify changing the article to support the strawman view you need it to reflect for your original research piece over at Subjective_theory_of_value. --Cplot 06:55, 9 August 2006 (UTC)

Economizer you need to engage in discussion here. I've explained how those sources are not saying what you think they're saying. You need to explain how they are. You cannot simply change the article to suit your needs elsewhere. Reader come to this article to learn what the LTV is about: not what strawman theory has been developed to support some other theory. --Cplot 04:55, 11 August 2006 (UTC)

Economizer's vandalism

I want to breifly explain why I view Economizer's edits to the article as vandalism. First Economizer has insisted that the LTV is a theory that is merely anacrhonistic and a bad theory. Economizer insists that the LTV is a theory with no adherents that can only be dfeined through secondary sources. Economizer has not shown that the secondary sources provided define the theory in the way Economizer insists. Econoomizer simply wants a strawman definition of the LTV here so that it can be more easily criticized elsewhere. Some indicative quotations from Economizer himself:

“The labor theory of value, in general, is an anachronism.”

“The labor theory of value is the belief that market prices are proportional to labor costs. The reason you can't find anyone who agrees with it today is because it is a bad theory. The amount of labor put into the production of a commodity can't explain why prices are what they are in a market economy. Just because few people, if anyone, agrees with it anymore doesn't mean that that's not the labor theory of value.”

However, the LTV (though it may have many different forms) has both historical and conermporary adherents. Many of those adherents are referenced in the article. Those adherents have conflicting views on the relation between value (as a quantity of labor embodied in a commodity) and price (as the amount of money or other commodity given over for a commodity). As shown by the second quotation above, Economize has waffled between insisting that the LTV is about prices equal to the quantity of labor on the one hand and prices as equal to the costs of labor on the other hand (apparantly not understanding there is a difference).

Finally, despite my requests and my attempt to engage Economizer in a discussion on these issues, Economizer has refused to even provide any arguments or specific discussion to explain how the sources cited support the claims of Economizer. --Cplot 05:46, 11 August 2006 (UTC)

Another point worth mentioning. If as Economizer insists the LTV has no adherenets and never had adherents, then that is something that should be in the real story about the LTV and should receive featured status in the lead section. The dispute over the term value would be of much less consequence. I do not believe that is the case and the article already lists sources of many adherents, so I think this is another inndication that Economizer is engaging in a form of subtle vandalism. --Cplot 17:07, 11 August 2006 (UTC)

I put some comments up on this edit war: [10]. I suspect my comments will satisfy nobody, and I offer little in the way of suggestions for resolution.

IMNSHO Economizer's edit does not comply with WP:Lead - the points they raise can and should (if they are valid) be reaised elsewhere in the article (especially the bits about Smith & Ricardo). The excessive referensing is ugly and unnecessary. Primary references should be preferred where they can be found and secondary only used to illustrate and elucidate. I support Cplot's reversions (though not necessarilly the description of poor edits as vandalism, that sounds unnecessarilly hostile to me).--Red Deathy 07:24, 17 August 2006 (UTC)

Red Deathy, thanks for the support. I think Economizer's work here goes beyond mere poor edits. Economizer has refused to discuss the edits on this page. Economizer insistts the LTV is a “bad theory” which is why there are no proponents. When proponents are pointed out to Economizer, Economizer insists that those proponents are using the theory incorrectly and that only the opponents of the theory should be allowed to define what it is. Then Economizer parades lengthy and frequent new secondary sources which do not support the arguments Economizer makes. When this is pointed out on this page, Economizer simply ignores the discussion and precedes with the edits. So I think this goes way beyond poor edits; Economizer presents one absurd argument after another (and I believe Economizer is fully aware of the aburdity).

Economizer is engaging in a very subtle form of vandalism that I call Sakalism (after Allan Sokal). Economizer knows there's no support for the arguments Economizer makes. For Economizer this is all a game. An opportunity to prey on the goodwill of the Wikipedia community. By allowing freely editiable articles and encouraging the inclusion of all points of view in an article, Economizer thinks this allows for the inclusion of made up material. This is an opportunity for Economizer to demonstrate that cooperative efforts canot possibly work: in particular because there are people like Economizer who will undermine those cooperative efforts given the opportunity.

If you llok through the limited discussions Economizer has engaged in here and follow through on Economizer's supposed sources I think you'll see what I'm saying. The goal for Economizer is to see what Economizer can get away with, how long the carefully crafted vandalism edits will remain on a page without notice and so on. --Cplot 19:34, 17 August 2006 (UTC)

I agree that the numerous footnotes are ugly. I'll condense them into one. But CPlot's intro is dead wrong in saying that "value" in the labor theory of value doesn't refer to price. The reason I have so many sources is because he denies that it's true, so I have to keep adding sources. Look at the sources. They all say that the labor theory of value is a theory of exchange value or price. I appreciate you pointing out that I am not vandalizing the article. I refuse to discuss the article with CPlot because of his claims that I am vandalizing the article and his incessant accusal of "bad faith." If I have bad faith then why is he upset that I'm not discussing anything with him? It wouldn't make sense to speak to someone that has bad faith. Likewise, it doesn't make sense for me to have a discussion with someone that keeps attacking me in that way. But, I am willing to discuss with anyone else that doesn't accuse me of bad faith and my actions as "vandalism." Economizer 19:56, 17 August 2006 (UTC)

Economizer, I've tried to assume you're making edits in good faith. However, when I follow up on your sources and point out that the sources don't say what you claim they say, You've acused me of original research because I'm interpreting your sources, rather than allowing you to interpret them without question. I would say that comes across as bad faith. A key concept at Wikipedia is verifiability. If I'm not allowed to interpret your sources and verify that they say whay you claim they say then nothing you say if verifiable. Also your claim that the WP OR policy implies that no one can cite primary sources, only secondary sources is another bizarre claim. This all strains your credibility that you're making all these claims in good faith. --Cplot 22:00, 17 August 2006 (UTC)

Let me add too that, Economizer's vandalism also violates the NPOV policy in that the view that prices are euqal to values is reflected in the article before Economizer arrived. What Economizer insists on is that the article reflect only the POV that prices are equal to values, even though he can cite not a single primary source that makes such a claim. If prices tend toward values then they cannot possibly be equal to values or it woould make no sense to claim they tend toward values. --Cplot 22:04, 17 August 2006 (UTC)

User:Economizer says But CPlot's intro is dead wrong in saying that "value" in the labor theory of value doesn't refer to price. I can't speak on Smith or Ricardo, but that is definitely true of Marx's version of the theory (If the converse were true, there would be no such thing as bargains or rip-offs.--Red Deathy 09:27, 18 August 2006 (UTC)

Yes, Ricardo did sometimes use "value" to refer to labor values independently of prices. I have some long quotes, from primary, secondary, and tertiary sources, on my blog [11]. -- RLV

One has to understand Economizer's position. Economizer's position is that price equals value is not true for Marx, Ricardo nor Smith. It is not true for any clasical propoenents of the LTV. It is not true for any contemporary propoenents of the LTV. But the proponents of the LTV are all wrong about what the LTV is. Only the opponents understand what the LTV truly is. Anyone claiming to be a propoment is simply mistaken about what the LTV truly is. And what it truly is is only what Economizer says it is (for Economizer, no supporting sources necessary) QED! --Cplot 20:05, 18 August 2006 (UTC)

Cplot: yes or no questions: Is it not true that Marx said that the reason prices are higher than the labor-value, was because under capitalism, workers are exploited? and that if factories where no longer in the hands of capitalists, but instead in the hands of collectives, that the price of an item would be equal to the labor-value? and isn't it true that he asserted that workers are exploited, by saying that all value is created only through labor? -- Dullfig 23:18, 18 August 2006 (UTC)

I hope Cplot's answers for the first two are: No, some prices tend to be lower than labor values. No, not after communism is established; see Marx's remarks on the Gotha program. My answer for the last is no. But apparently Dullfig thinks this is Usenet. It's certainly true that Ricardo and Marx, for example, talked about "value" independently of exchange value, at least according to a whole host of interpreters. And they pointed to text in Ricardo and Marx, for example, to justify their views. -- RLV

Wait, wait, you mean this ISN'T usenet?! -- Dullfig 18:00, 19 August 2006 (UTC)

Dullfig, No on the reason prices deviate from value. No on the "instead" part too. And a qualified yes on the question about exploitation. If you read the artcile (specfically the setction on the labor process) you'll see how the labor process is tied in to the creation of value. Finally, ,on the last question, yes its true that all value is created by labor (tautologically true as Marx mentions in thi "Critique of the Gotha Programme"). However, just becuase labor creates all value it doesn't frollow that workers have to be exploited. Workers could collectively appropriate the surplus labor they produce collectively already. In that case th4e workers would not be exploited although the produce surplus value. This is all independent of the deviation of prices from values. Marx was particularly critical of the view you ascribe to him that profits come from charging more than a commodity's value.

Our job here at Wikipedia is not to chornicle common misconceptions about a topic, it is to produce sourced, verifable, npov discussions of a topic that are written to a general audience. I've said before that, to the extent these misconceptions are influencing general readers, we should try to address that in the article. But it doesn't address it by sweeping the actual LTV under the rug and simply patronizing those misconceptions. --Cplot 18:25, 19 August 2006 (UTC)

Sources for Economizer's rewrite of intro

The intro before I started working on it was flat out wrong. It said that "value" in the "labor theory of value" does not refer to exchange value or price. The overwhelming view of sources disagree. The intro apparently was written by Cplot by interpreting writings of the classical economists by himself. That cannot be relied upon. For complex topics we must defer to the scholars. Scholars disagree with him. Here are several sources saying the labor theory of value refers to value in exchange.

"To the classical vision of capitalism, Marxism was in large measure a sharp rebuttal, but to some extent it embodied variations of classical themes. Marx adopted, for example, a version of Ricardo's labor theory of value. With a few qualifications, Ricardo had explained prices as the result of the different quantities of human labor needed to produce different finished products. Accordingly, if a shirt is priced at $12 and a pair of socks at $2, it is because six times as many hours of human labor entered into the making of the shirt as the socks. For Ricardo, this theory of value was an analytical convenience, a way of making sense of the multitude of different prices in shops. For Marx, the labor theory was a clue to the inner workings of capitalism, the master key to the inequities and exploitation of an unjust system." (Economics. MS Encarta)

"The labor theor of value says that, in competitive markets, commodities that can be produced over and over against exchange in the marketplace according to the amount of average quality work time it takes to produce them." (Yates, Michael D. Let's Put the Nature of Work on Labor's Agenda: Part Seven)

"The LTV is the theory that market prices are attracted by prices proportional to the labor time embodied in commodities. In other words, relative prices tend towards relative labor values." (Vienneau, Robert. Frequently Asked Questions about The Labor Theory of value)

"The central claim of the labor theory of value is that products exchange in proportion to the amount of labor time required for their replacement." (King, Peter and Ripstein Arthur. Did Marx Hold a Labor Theory of Value?)

"The labor theory of value states that the market prices of commodities tend to be proportionate to the labor socially necessary to produce them. (Zachariah, Dave. Testing the labor theory of value in Sweden)

"Marx and Engles subscrived to an economic theory known as the "labor theory of value." When they first began their economic studies, that was the state-of-the-art theory in economics. Not only had the two great economists Adam Smith and David Ricardo developed it, but all other writers on economic matters, among them Benjamin Franklin, had held it. Marx quotes Franklin extensively. In outline, the labor theory of value asserts the following: All commodigies are useful to someone (otherwise they will not sell). They have, in the classical terminology, "use value." But they also exchange with other commodities, The ration in which they exchange with other commodities in called their "exchange value."...The theory further assumes that in most exchanges, equals exchange for equals. In some way a quarter of wheat is equal to x blackling or y silk or z gold..But that raises a further question immediately, namely, in respect to what are a quarter of wheat and the specific quantities of other commodities equal to one another? The classical economic theory answered: with respect to the emobodies labor. The value of a commodity was the labor time embodied in it. Hence the labor time embodied in any given commodity determined the proportion in which this commodity exchanged with others. (Schmitt, Richard. Introduction to Marx and Engels: A Critical Reconstruction. Westview Press (1997), p. 104-105)

"Adam Smith theorized that the labor theory of value holds true only in the "early and rude state of society" but not in a modern economy where owners of capital are compensated by profit. As a result, "Smith ends up making liteel use of a labor theory of value." (Canterbery, E. Ray, A Brief History of Economics: Artful Approaches to the Dismal Science, World Scientific (2001), pp. 52-53)

"The classical economists adopted the simplifying assumption of the labor theory of value. This theory asserts that labor is the only factor of production and that in a closed economy the prices of all commodities are determined by their labor content. In particular, since our interest lies mainly in relative as opposed to absolute prices with regard to the pure theory of trade, according to the labor theory of value, goods are exchanged against one another according to the relative amounts of labor they represent." (Chacholiades, Miltiades. The Pure Theory of International Trade, Aldine Transaction (2006), p. 14)

"Like most of the classical economists, Marx tried to explain price formation by a labor theory of value. The rates at which goods exchange against each other are explained by the amount of labor that has gone into their production." (Elster, Joe. An Introduction to Karl Marx, Cambridge University Press (1986), p. 64)

"The labor theory of value, for Marx, played a double role - as a theory of exchange and a theory of exploitation. Marx's approach was to use the theory of exchange as a conduit to generate the theory of exploitation. (Roemer, John E. Analytic Foundations of Marxian Economic Theory, Cambridge University Press (1989), p. 52)

"Marx believed the exchange value of a commodity was determined by the amount of labor time necessary for its production. His theory is therefore usually called the labor theory of value." (Hunt, E. K. Property and Prophets: The Evolution of Economic Institutions and Ideologies, M. E. Sharpe (2002), p. 109)

"The labor theory of value states that the value or price of a commodity is equal to or can be inferred from the amount of labor time going into the production of the commodity." (Salvatore, Dominick. Schaum's Outline of International Economics (1995), p. 15)

Let me know if you need any more. Economizer 20:55, 21 August 2006 (UTC)

One could adopt one of several perspectives on Marx: (1) Marx expounded a labor theory of price in the first volume of Capital. He discovered he was wrong, but he was never honest enough to admit it. (2) The labor theory of value was a theory of price. Marx rejected this theory. Hence, Marx's theory of value was something else. (3) Marx adopted a labor theory of value, and this was something other than a labor theory of price. I think the first perspective is just incompetent at this date. I tend to be more sympathetic to (2). However, anybody well-read recognizes that the third perspective exists. If I look, I can find literature arguing that it is the rejection of the labor theory of value that characterizes "vulgar political economy". (Look at Freeman and Carhedi (1996), Fine (The Value Dimensuib, 1986) or Mandel and Freeman(Ricardo, Marx, Sraffa, 1984); I'd have to review Foley (1986).) I like to think some of the mocking in the literature directed at Steedman, Elster, or Roemer is in good spirits. I even quoted Terry Peach - no Marxist him - finding something like this third perspective in Ricardo. I don't care how many sources "Economizer" quotes (although I am disappointed in Hunt's simplification). Until "Economizer" acknowledges the existence of this third perspective, he'll appear dishonest to me. -- RLV

RLV, don't be too disappointed by Hunt's quote. As I've tracked down all of Economizer's prvious citation, he's shown an incredibl knack for taking statemnts of authors compleetely out of context. I souldn't be surprised if Hunt makest that statement just to knock it down (or something else like that). I would certainly acknowledge your point 2) abvoe. But Economizer has produced sources that say the same about Ricardo and Smith. So again we're left with a LTV (as Economizer defines it) that has no proponnents contemporary or classical. I think point 1) is very mistaken, since Marx wrote the LTV chapters of Capital after he wrote volumes II and III. If one reads Capital with that in mind you can see how Marx is abstracting from the differences between price magnitudes and value magnitudes and not assuming they're equal (even as a tendency). Regardless, thanks for the vote of support here,. Sometimes it feels like I'm all alone with this crazy person. --Cplot 01:20, 22 August 2006 (UTC)

Why are you calling me dishonest? This incivility has to stop. Are you CPlot in disguise? Apparently you haven't noticed that I did acknolwedge and pointed out in the intro that it is arguable whether ANY of the classical theorists agreed with the labor theory of value as it is commonly defined. I have no claim one way or the other. I'm just pointing out the common definition of labor theory of value. Whether any of the theorists believed in it, or whether they had an altered form of it is a subject that can be explored in the article. I am not claiming ANY of the theorists agreed with the labor theory of value. I'm just pointing out what it is. I did not supply the sources above in order to prove that Marx subscribed to the theory or didn't but to point out the definitions. Marx just HAPPENED to be in some of the quotes. I have absolutely no POV in this matter other than to provide the common mainstream definition of the labor theory of value, whatever that may be. Do not accuse me of "dishonesty" again. Economizer 23:59, 21 August 2006 (UTC)

"Economizer" should not behave so adolescently.

"The very obscurity of their typical proposition that 'labor is the sole producer of value' suggests that that those authors could not have intended it to have the same meaning as the proposition that 'goods exchange in proportion to their labor contents'" (Gordon 1959).
"Price of production are internally consistent and may be used for a materialist theory of value. It is not clear how important labor values are to such a theory, or whether it can properly be described as a labor theory of value." (Vienneau, Robert. Frequently Asked Questions about The Labor Theory of value)
"So, since the rate of profits is normally positive, the labour theory of value is in general false as a theory of relative prices. As shown below, this was clear to both Ricardo and Marx, so the question is, in what sense and to what purposes did they nonetheless adopt the labour theory of value. ... Marx in volume I of Capital (1867) takes for granted (except for some cryptic hints in footnotes) the labor theory of value, to the extent, differently from Ricardo, of defining values as the exchange ratios (in terms of gold) determined by the labour theory of value; but in fact he knows that prices of production are not proportional to 'labour values'..." (Petri, Fabio (1998). "The Labour Theory of Value", in The Elgar Companion to Classical Economics)
"The labour theory of value can be stated simply as the principle that the source of the value added of the mass of commodities produced is the labor expended in producing them." (Foley, D. (1986). Understanding Capital: Marx's Economic Theory)

The first two references are Economizer's, and Cplot has pointed out they can be cited in his favor. Not only did Economizer ignore this, he also ignored the distinctions between three points of view in the comment to which he is pretending to reply. (I think the article has deteriorated a lot from when Jim Devine contributed and am mainly amused by this edit war.) -- RLV

Personal attacks aside, if you have sources, great. Then add them to the article. I have no vested interest one way or the other in what the labor theory of value is. But it's pretty clear to me that most sources agree that is is a theory of exchange value or price. I think you present a fringe viewpoint. If you can show that most sources think that it's not, then great. Again, I don't care what the labor theory of value really is. All I care is what the consensus of sources says that it is. Wikipedia is supposed to reflect what the sources say is the truth, not necessarily what the truth actually is. We are not supposed to do "original research" here. The "truth" is what the sources say it is. And so, far, most overwhelming number of sources presented agree that it is a theory of exchange value or price. Economizer 00:50, 22 August 2006 (UTC)

I've said this before, but got no response. If you cannot point to a single proponent of what you mistakenly think of as the LTV, maybe its time to consider that maybe the LTv isn't what you thought it was. There are many proponents of an LTV. They (include Richard and Marx, but also many contemporary theorist too. These theorists are typically denigrated for having a different pseudo LTV that has no proponents. Wikipedia's job is not to reproduce the common misconceptions about a theory, but to try to address those and clear them up.

What you refer to as "the common mainstream definition" is those misconceptions all tangled together. Earlier I had suggested a separate section or an entire article (linked from this one) that discussed this fictional straw-man LTV. You refused to even acknowledge the discussion. You just keep posting the same incorrect, misconceived version of the LT without listing a single source that is a proponent of this theory. If you truly believe that the common misconceptions about the theory are the actual theory than your intro would at least acknowledge that there are no proponents of that theory. Also it should acknowledge that it's merely used as a straw-man theory to bolster other theories. Regardless, the intro would have to acknowledge the contributions of the classicals and especially Marx in reshaping that theory into one that doesn't conform to the common misconceptions.

Time and time again, I've invited compromise on this. There should be room to discuss both the LTV and the misconceptions about the LTV. Consider the theory of evolution. It is a common misconception that Darwin's evolution of evolution is mixed up with prior theories of use and disuse. Would you therefore advocate that an article on evolution should remove any discussion of Darwin in favor of the common mainstream understandings of Darwin? i think that would be absurd. Likewise I think it is absurd to remove the LTV as its major proponents defined it in favor of contemporary mainstream misconceptions about the theory (especially without a single proponent source). If Ricardo wasn't a proponent of the theory you describe; and Marx wasn't a proponent; and Smith wasn't a propoenent; and no one contemporary is a proponent becasuse: "The reason you can't find anyone who agrees with it today is because it is a bad theory" (Economizer above); well then who is a proponent of this theory. Because if this is a theory without proponents/adherents that's the most remarkable thing about it and has to appear in the introduction. Economizer what you keep saying in these discussion is that there are no proponents which to me is the same as acknowleding you can find no sources for your explanation of the LTV. .--Cplot 01:00, 22 August 2006 (UTC)

Just a reminder. I will not discuss anything with the above editor and will not read his comments. Cplot has attacked me as "vandalizing" the article and accused me of bad faith. He apologized once, so we resumed discussions. But then he started it again. I will not accept any more apologies and there there is no point in us having a discussion. Why he would want to have a discussion with someone who he thinks has "bad faith" is bizarre. I want nothing to do with him. Economizer 01:11, 22 August 2006 (UTC)

Economizer, you have not engaged in discussion at all. Anyone can read the record above. Any substantive points I've raised you've ignored. I started calling it vandalism when you refused to engage in discussions. I had even early on explained by over-zealous concern for vandalism of this article and why. You ignored that discussion and went ahead and made the changes you wanted to make, continuously producing sources through some mad googling: sources which one after the other I've shown do not support your arguments. You version is unverifiable. The unreliability even extends to your claim that the Wikipedia OR policy prohibits primary sources. That's a complete fabrication (one easily verified).--Cplot 01:27, 22 August 2006 (UTC)

Just a reminder. I will not discuss anything with the above editor and will not read his comments. Cplot has attacked me as "vandalizing" the article and accused me of bad faith. He apologized once, so we resumed discussions. But then he started it again. I will not accept any more apologies and there there is no point in us having a discussion. Why he would want to have a discussion with someone who he thinks has "bad faith" and who he has labeled a "crazy person" is bizarre. I want nothing to do with him. Economizer 01:32, 22 August 2006 (UTC)

Well, what to say, quickly. Firstly, if you read Marx in Capital I he distinguishes Use Value,. Exchange Value and Value (Exchange value being a sort of manifestation of value). In Capital I his examples do assume (and he states this) that price equals value, but we know that he had written most of Capital III before Capital I was published - for the full workings of Marx' system, I recommend reading this chapter to see how he distinguishes price and value within his LTV system. Again, I can't speak for Smith or Ricardo, though I'm sure they too acknowledged that labour was not the sole source of price but of exchange value.--Red Deathy 07:40, 22 August 2006 (UTC)

Violation of Wikipedia:Three-revert rule

Cplot, you have violated 3RR. I ask that you revert yourself. Otherwiser, I will report you.Ultramarine 03:01, 22 August 2006 (UTC)

^ Unless otherwise noted, the description of the labor process and the role of the value of means of production in this section are drawn from chatper 7 of Capital vol1 (Marx 1867).
^ In the case of instruments of labor, such as the roaster and the brewer (or even a ceramic cup) the value transfered to the cup of coffee is only a depreciated value calculated over the life of those instruments of labor according to some accounting convention.
^ Value, Price and Profit ch 2

[1] Unless otherwise noted, the description of the labor process and the role of the value of means of production in this section are drawn from chatper 7 of Capital vol1 (Marx 1867).

[2] In the case of instruments of labor, such as the roaster and the brewer (or even a ceramic cup) the value transfered to the cup of coffee is only a depreciated value calculated over the life of those instruments of labor according to some accounting convention.

[3] Value, Price and Profit ch 2

[1]

[2]

[3]