AskProfWolff: What is the Labour Theory of Value?

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[PeeedaPan]

I want learn more about difference between price and value

[nsinkov]

"Labor theory of value is not about price, it's about value"

Doesn't explain what value is

[hypnosifl]

The idea that the labor theory of value has nothing to do with price doesn't match what Marx said about it--he argued that prices would approach labor-value as one approached a certain kind of economic equilibrium (just as modern economists have models of what would happen in various types of equilibria that can only be inexact approximations of reality, like the "perfect competition" model). For example, in the 1865 work "Value, Price and Profit" 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 labor required for their production."

[PCFLSZ]

If LTV doesn't consider price, then how do you claim labor produced more value than it receives? Marx never solved the gap between value and price (the transformation problem).

Every argument I've seen that claims surplus value is stolen from workers subtracts the wage labor cost from the the selling _price_ as evidence. Couldn't the answer also be that the worker is paid for the value of his work and the profits are created in the difference between price and value?

[zhy]

Its ridiculous how you can equate being an employee as the equivalent of being a slave, and a employer the equivalent of a master. Its disrespectful to what actual slavery is.

[RageRabbitGames]

A question:
According to Marx, under capitalism, the entrepreneur/employer receives the surplus, and Marxists see this as exploitation. However, where I'm struggling is that if workers should be entitled to that surplus, entrepreneurs would not receive any compensation for organising the resources, labour, processes, ideas etc. As such, it seems to me that there would be no incentive to be an entrepreneur as opposed to an employee. Wouldn't this result in few businesses being started, and an economy lacking incentives? (Incentives to innovate, make a process more efficient etc). Is the entrepreneur not entitled to the surplus as compensation for facilitating the conditions for the labour to create any value at all?
Let me know what you think.
Thanks.

[georgewilliams]

The problem with the Labor Theory of Value is that Value is subjective.

[evo-labs]

Inother words, conventional economics is dogmatic and is not interested in the systemic issues that arise from the very system they promulgate.

[Sam-zwkp]

So where do raw materials get their value from? They exist in the world without the need of labor

[xMIIONx]

Hello Professor Wolff, can you please get in touch with Jimmy Dore Show, as an economist it would be great to have your take on that show. It'll also introduce you to his huge audience. Many thanks.

[lukastaylor]

I'm not sure if that's what Marx was saying. Do you mean that this is the revised current interpretation of the theory? Marx seemed to say that exchange value (which is connected to price) is determined by socially necessary labor time.

[technatezin]

Money is basically a note giving you a promise that you can exchange it for something valuable after you perform a service for someone (a job) of equal value or give an existing item of equal value to someone. Outside of those two situations, money itself has no meaning and no value. But, how does some physical item of equivalent monetary value exists come into the possession of someone? Ultimately, when you trace back all the monetary transactions all the way to the beginning where money was first used to indicate a debt in a trade the physical item being exchanged (animal furs, fish, game, stones, etc...) had to come about from some manual labor performed hence you have the labor theory of value. Anything else explaining why money is valuable just doesn't make any sense.

[hermitthefrog]

What Marx and Professor Wolff don't understand is that labor is also a market and subject to the laws of supply and demand for labor with those particular skills. Just like the products that they make.
The "surplus" that Dr.Wolff imagines is divided based on the markets for the individual resources (land, labor, capital, and entrepreneurship) that go into the product or service. The fact that Dr. Wolff is clueless about the resource (or factor) market, which make up half of the economy is a good reason to ignore his commentary.

[curanderos]

I'm interested in starting a worker owned co-op. I understand the basics of how it works. Employees own and democratically operate the business. At the end of the fiscal period, employee-owners democratically decide what to do with the profits (or the surplus). My main problem is that my potential partners don't have any start-up capital, they're mostly young kids from impoverished areas of the city. If I put in all the start-up capital myself, would it be greedy to ask for an extra 10% of the surplus value? When I retire, how would I make sure my health and environmental principles remain intact? Also, how would I make sure the co-op never gets sold to a corporation? Thanks!

[weebgrinder-AIArtistPro]

What say you to Eugene von Bohm-Bawerk's critique of the exploitation theory of interest? Bohm-Bawerk didn't think goods of equal value were exchanged. "Where equality and exact equilibrium obtain, no change is likely to disturb the balance". The transfer of commodities that characterizes an act of exchange, on the other hand, results from the prevalence of an inequality of value, where what is valued less is traded for what is valued more.

This could be conflating price and value, but I find it hard to believe an economist would do so.

[jlolson]

It's an interesting distinction between price and labor, but it's ultimately a distinction without a difference. It's impossible to separate price and labor in any form of interaction between people. Price signals the value of the labor; it is the ultimate aggregate of value. That is, price incorporates everything: demand, supply, and labor. It's a holistic measure. Labor at best provides only a subsidiary portion of value in the scheme of exchanges.

[titusabraham]

That surplus is enabled by the employer or business owner who organizes the labor under the auspices of a business or some organization (even government). So if the labor is poorly organized there is less surplus. So for there to be an incentive for the labor to produce the surplus part of the surplus must be given at least in part to the organizer. Now if the laborers are able to self-organize then the surplus that exists can go back to the laborers in total.

[denisross]

Price usually is either the recovery of all costs and a pe centage of profit or whatever price people will pay

[maguirefire]

This is to simple to be practical.. value of labour could be anything... value of input costs could be anything... one man pays for his input costs another has a company do it... already u have 2 values of labour not considering one man drives his own delivery truck and another driver has one provided.... one man uses an electric saw another man uses a hand saw.... the labour market has to many complexities to have a 1 fits all theory... supply amd demand takes way more into consideration

[zubairhassan]

Thank you sir ! Even After watching 8 videos & numerous article I was confused !