Fundamentals of Marx: The Monetary Expression of Labor Time

In this video we explore the monetary expression of labor time (MELT), which is an important indicator in capitalist economies. We define MELT and demonstrate how discrepancies in national MELTs can lead to a fundamental imbalance in exchange.
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Narration, script, and editing by M.
Animated intro by Jack, co-host of the Auxiliary Statements podcast @AuxStatements on Twitter.
Intro music by Charles Tristan:
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Works Cited:
Lin, C. (2023). A Model of the Monetary Expression of Labor Time with Non-commodity Money. Review of Radical Political Economics, 04866134221140542.

In addition to the above article, the discussion in this video was inspired by Andrea Ricci's "Value and Unequal Exchange in International Trade" (2019).
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00:00 - 00:50 Background
00:51 - 01:03 Intro
01:04 - 02:41 Concrete and Abstract Labor
02:42 - 04:14 New Value and Net Product
04:15 - 04:37 Defining MELT
04:48 - 05:39 Gold or Paper Money?
05:40 - 07:31 A Two-Country Global Economy
07:32 - 07:47 Unit Values
07:48 - 10:35 MELT and Unequal Exchange
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Music used:

Deep State by Vans in Japan

[samuelrosander]

"Value, Price and Profit" is a good "book" to read to get some more context. It's an easier and MUCH shorter read than Capital, and actually summarizes the ideas as a response to arguments made by capitalists of his time...which are still being made today by capitalists because they find it useful to repeat propaganda that most people will just accept as true without question.

[animeiseva]

Merry Christmas, Comrades! Karl Marx is the real santa

[g.f.martianshipyards]

My mind has MELTed. Need to watch this again when I'm more receptive.

[rossplendent]

"Inarticulable by dominant liberal frameworks" is putting it mildly. Said frameworks were explicitly developed to obfuscate the centrality of both the exploitation of labor and imperialism in the functioning of capitalist economy.

[alextsitovich]

In summary, the bigger productivity => the more units of goods are produced per day (year) => less labour each unit of goods contains. But with the same price for each unit of goods, a unit of goods costs the same money whatever amount of labour it contains.
8:24 At bigger productivity a worker produces the same Value per day (year) but bigger amount of goods => and with the same price per unit => more Money (revenue) per day (year) for all produced goods . Each unit of goods has less value than average (world) value, but sells by the same price. That's why the price of a unit of goods is "overvalued in exchange". Having more money for the same added value gives opportunity to say that the same amount of labour (an hour, a day, a year) produces more money, has more MELT.
9:36 Underdeveloped countries usually have to exchange their undervalued goods for overvalued goods from developed countries. That results in giving more labour for less labour in world prices.
It wasn't mentioned, that in developed countries workers have to buy for their living purposes almost the same set of goods with overvalued prices. And that results in having salaries higher than value of their labour force. So their salaries also should be overvalued. Because of that the salaries in other economic branches will be overvalued too. So, capitalists should pay more money for the same jobs in developed countries than in underdeveloped ones.

[jakeaustria]

I need concrete examples for this abstract concept. I just can't get a hold of it. Thanks. The video is highly appreciated.

[flyingbicycles]

I think the closest liberal theory to this would be purchasing power parity. Poorer countries have a lower PPP therefore it requires less money to have a similar quality of life. Thus a rich country can spend less to get more by offshoring, assuming efficient international trade.

Though of course, this also assumes that people in the poorer countries are getting the same quality of life for their wages as a worker in a rich country, which obviously doesn’t happen. They are underpaid even more than PPP would suggest, which is a major reason why their PPP is lower in the first place

[redoktopus]

even in marx's time money was not gold. i think this is very important.
gold could back money but this is a misconception. gold simply had a state-fixed price like many commodities throughout history.
fiat money, interpersonal lending, and all the types of debt that capitalists claim were invented in the west in the 20th century are all much older than physical money.
fiat currency is and was what money has always been. even in the days of money being "backed" by gold, states and banks would never have enough in the vaults to cover all the bills in circulation.

[fernandoarista]

I need a dictionary when listening to vids like these

[auferstandenausruinen]

Does this still stand in the age of Imperialism, when monopoly and barriers in technology blocks free exchange of value?

[icantaimpgd]

Would be nice if you can make a video on dark aspects of the Soviet Union and discussing wether it was quote unquote social-imperialist.
I’m a Vietnamese far-leftist and support socialism but I think that we should be honest confront the dark side of former and current socialist countries.

[DadeSociety]

Our recent animated explainer (with English subtitles) about Marx's labour theory of value talks about abstract and concrete labour in terms of labour theory of value. The calculations for monetary expression of labor time seem quite complicated, but thanks for your explanation. We would love to hear some thoughts and comments on our take on Marxist theory as well.

[ASHS]

Congratulations for the channel and videos.

I suggest a video about the MELT according to the Temporal Single System Interpretation (TSSI) of Marx's economic theory. Read Alejandro Ramos 90s paper, Kliman's and Freeman's debate in the 2000s with Mohun and Veneziani, and Freeman's 2020 paper.

I also suggest to explain TSSI thoroughly. It is crucial for Marxist economic theory and Marxism in general.

[gamdanyunizar]

I think it's better to give a simple, kindergarten example in the video, like "Mike is a worker in X Company..." That way common folk like me can understand easier.

[waspwrap]

I have a question, how does supply and demand affect melt? Personally, I don’t think supply and demand really plays into how capitalism works today because supply and demand doesn’t take into account cost of production, investment, monopolization, and a rising cost of basic needs, along with advertising. Just curious on what your thoughts are of how the idea of supply and demand plays into MELT

[monkowell]

Why is labor value the inverse of productivity? This has always confused me that labor value has only been measured via average socially necessary labor time. What if I work less time to produce same quality product? How come my value is less because my time is less? Likewise how come my value is more if I take longer to produce the same quality item? It’s not just about time is my point and what I feel is missing from the theory. To me it’s about the quality done within whatever time accomplished. Maybe I’m missing something. But this has frustrated me for a while.

[rainerlippert]

Are you sure the image you show at 00:23 is correct?
An entrepreneur would be very happy if that were correct, because then all he would have to do is produce something and thereby achieve his goal, namely making a profit, without having to sell his products.

This view is shown to be false by reality.
“Profit” is also not correct according to Marx; it is surplus value that should replace the term “profit”.

But only a buyer on the market can pay for the surplus value. An entrepreneur only achieves surplus value if a buyer buys one of the entrepreneur's products, completely replaces the costs c + v and pays even more – the surplus value.

On the production side of the commodity society, an entrepreneur can only estimate the amount of surplus value he can obtain under current market conditions.

In addition, the surplus value is not paid on the costs c + v, but, by the buyer, on the reimbursement of the costs. This is what happens in the market.
Even if an angel were to hand the entrepreneur the sum of money m from heaven, that would not be any surplus value because it would only replace a part of the costs.

Since surplus value is part of the value, there can only be one expected value on the production side of the commodity society through the expected surplus value.

The real value is only created during exchange on the market when it is clear whether the buyer is paying surplus value and, if so, to what extent.

On the production side of the commodity society there is only private work that does not create value. If the work products cannot be sold, it remains that way - the work put in was not socially useful and therefore not value-creating. This means that it cannot be qualified as abstract.

With the sale of a work product, value is assigned to the work/labor results, i.e. the work product, at the social level through a value equivalent. Only then can the work put in, in accordance with the value of the value equivalent, be qualified as socially useful, therefore as value-creating, as labor and therefore also as abstract.

[christressler]

Are there more books that go into detail? Anything between a "Das capital for dummies" to more formulas and mathematical analysis, but in the spirit of this video?!?!?!

[scoopidywhoop]

I am not a communist, in fact you may hate me for my beliefs, but I agree that socialism is the future. You make amazing content, keep it up, and thank you!

[felipetalavera]

the value express in "price" is subjective. that destroy all the monetary theory of marx