Source
r/CapitalismVSocialism•
End-Da-Fed

[Marxists] LTV Is An Antiquated Theory That No Longer Exists Today

  • Labor Theory of Value is the value of a commodity measured objectively by the average number of labor hours necessary to produce it. So for example, if a horse cart traded for 20 ounces of gold but a pair of shoes only traded for 2 ounces, what made the horse cart 10 times as valuable as the shoes are the horse cart took 10 times as much average labor to produce as the shoes.

  • Then the industrial revolution came along and with it numerous labor-saving devices and a rapid increase in productivity. Then the definition of LTV was fundamentally changed by Adam Smith and David Ricardo to be defined as the value of a commodity is measured by the exchangeable value. The exchangeable value is relative to what the market is willing and able to pay for it. So for example, if the average Xbox One sells for $250.00 that's the exchangeable value, that Xbox One's value is relative to what the market is willing and able to pay for it.

  • Marx said the post Industrial Revolution definition of LTV (from Smith and Ricardo) was not a proper metric anymore and that it was not enough for two goods to have an equivalent amount of labor since there's always some sort of variance; instead, the two goods must have the same amount of “socially necessary” labor, required to produce it. This "socially necessary labor" determines the final price of a commodity. Whatever the fuck "socially necessary" means, however, the fuck one is supposed to objectively measure "socially necessary labor" Marx could neither explain and nor IMO had any clue. It was just a Trump-style, overly broad, unsubstantiated claim to lead into his next claim that all values are measured in labor hours and that labor hours are always less than "socially necessary labor". Therefore, how can capitalists ever morally enjoy profits when they pay their workers less than the "socially necessary"/real value of their labor? They shouldn't enjoy their profits because it was acquired through oppression and worker exploitation.

  • All modern economists have since abandoned LTV completely and only use the Subjective Theory of Value (STV). STV states exchange value of any commodity is not absolute but relative and based on the human's/consumer's perception of the good's utility. While LTV argued input costs determined final prices, (like the shoe vs the horse carriage example) the STV has proven the value of inputs is only based on the potential market price of final goods and that market price/exchangeable value is determined by the consumer perceptions of utility.

Posted Mar 27, 2018, 5:05 PM UTC · edited

126
Hhturanational-syndicalist, post-communist•

if a horse cart traded for 20 ounces of gold but a pair of shoes only traded for 2 ounces, what made the horse cart 10 times as valuable as the shoes is the horse cart took 10 times as much average labor to produce as the shoes

A proponent of the LTV wouldn't need to make this conclusion. It could also just be that many more people want the horse cart. Maybe in the setting of the question people don't want shoes much. There's not a lot of information to work with here either way.

This "socially necessary labor" determines the final price of a commodity.

The two are said to have some relationship, but I don't think it's said that one "determines" the other.

Whatever the fuck "socially necessary" means, however the fuck one is supposed to objectively measure "socially necessary labor" Marx could neither explain and nor IMO had any clue.

Have you looked for an explanation and not found one, or do you just not know and are you hoping that somebody here will tell you the answer? This a bit reminds me of the thing about how the best way to get an answer about how to do something in Linux isn't to ask "how do I do [task] in Linux?" but to say "See, Linux is shit because it can't even do [task] like Windows can." Then they jump in to try and correct you.

5
Emoticone11For Planning and Information Theory•

Have you looked for an explanation and not found one, or do you just not know and are you hoping that somebody here will tell you the answer?

I'm going to guess neither.

1
End-Da-FedOP•

Already spoon-fed you the answer in the OP.

It was just a Trump-style, overly broad, unsubstantiated claim to lead into his next claim that all values are measured in labor hours and that labor hours are always less than "socially necessary labor". Therefore, how can capitalists ever morally enjoy profits when they pay their workers less than the "socially necessary"/real value of their labor? They shouldn't enjoy their profits because it was acquired through oppression and worker exploitation.

2
Emoticone11For Planning and Information Theory•

u/Hhtura asked if you've (1) looked for an explanation and not found one, or (2) you don't know and want someone to provide the answer to you.

Your post is very clearly attempting to do neither. You're trying to pose yourself as an expert and provide an explanation to others. Hence my reply, "I'm going to guess neither".

Of course, this tactic falls apart pretty quickly when one actually analyses the contents of the post. For instance, the part you quoted is incorrect: the rate of exploitation according to Marx doesn't come from "labor hours being less than socially necessary labor", but rather the value of labor power being less than the value produced by labor. Hence, you cannot and should not pose yourself as an expert on the subject because you cannot accurately summarize Marx's work. You should do actions (1) or (2) even if your post intended to do neither.

Inb4 some non-sequitur about how I can't deny facts or some infantile characterization of me "screeching" or being triggered from someone supposedly in their mid-adulthood.

2
End-Da-FedOP•

My OP was already inb4 spoon-feeding everyone the answer.

2
End-Da-FedOP•

Nobody can correct establish facts. Especially some of the clueless idiots on Reddit.

0
SihplakMarxism-Leninism, Central Planning, SW/CC, LTV•

This "socially necessary labor" determines the final price of a commodity. Whatever the fuck "socially necessary" means, however, the fuck one is supposed to objectively measure "socially necessary labor" Marx could neither explain and nor IMO had any clue

Then you literally did not read Marx nor have you gone through any other forms of media which break down this incredibly simple concept.

To put it in a simple imaginary hypothetical scenario so we can explain the concept in the most basic form, let's say we have three chair factories labeled A, B, and C. Let's say factory A make 4 chairs an hour, B makes 3 chairs an hour and C makes 5 chairs an hour. From this, on a surface level we're already able to understand that factory C will be doing the best because they produce more than their competitors in the same amount of time, but to explain why, SNLT comes in. SNLT is described basically as the average amount of labor time it takes to make a product or commodity. In this example, we have three factories, A, B, and C, and together they make 12 chairs in one hour (3/hour+4/hour+5/hour=12/hour). Taking the average (12/3) we get 4 chairs per hour. This, then, is the society's SNLT for making chairs; four chairs take one hour of labor, or divided down even further, one chair is takes 1/4 of an hour on average.

Now, we know the value of chairs; four chairs is valued at one hour (note: none of this is price yet, price and value are intrinsically different). Now, we compare the factories to see what will happen:

Factory A produces at the SNLT, so in a Capitalist market setting they'll be doing alright. They'll sell at typical market prices to make a profit. However, factory B produces less than the SNLT, but this doesn't mean their chairs are worth more because they take more time to make, but rather, they are inefficient at production because they produce at a rate less than the SNLT to make chairs. Therefore, they're forced to sell chairs for little profit if not at a loss in order to stay competitive within a Capitalist market system. Finally, factory C is doing very well; they produce chairs at a rate higher than the SNLT for chairs, and therefore can make "superprofits". Because they have a technological advantage making themselves more efficient that their competitors don't have, they can sell their chairs for the higher price that would be communicated via the SNLT of 4 chairs/hour, while making 5 chairs/hour. They could even sell for a lower price while making a profit too, completely out-competing their competitors.

Deviations in prices are a more complicated subject that at the moment I don't have the time to explain (have to leave soon after posting this). Paul Cockshott's channel is good if you want more information on it, particularly his video on the transformation problem and his video on the labor theory of value.

5
End-Da-FedOP•

Then you literally did not read Marx nor have you gone through any other forms of media which break down this incredibly simple concept.

Then you are "literally" lying and have never read Marx as thoroughly as I have.

  • Classical LTV was formulated and defined by Adam Smith and David Ricardo as we all know.

  • Marx claimed exchange value is conceived as a proportion (or 'aliquot part') of society's labor-time/socially necessary labor value. Marx never defined SNLV once in any of his writings, essay or letters.

  • The reason for Marx never formally defined SNLV or provided any scholastic computational rigor for objective measurements, was so Marx could enjoy unlimited flexibility in selective analogies and to provide the foundation of his morality argument of worker oppression/exploitation by villainous capitalists.

Paul Cockshott is a fraud, is not an economist, and never published a single study in any credible academic journal. Paul Cockshott is a bout as credible a citation for economics as Alex Jones is for Pizzagate.

2
SihplakMarxism-Leninism, Central Planning, SW/CC, LTV•

1. "Socially Necessary Labor Value" isn't a thing; Socially Necessary Labor Time is.

2. Since you're now just asking me to basically quote Marx, refer to the following from the first chapter of Capital vol. 1: (Emphasis mine)

Some people might think that if the value of a commodity is determined by the quantity of labour spent on it, the more idle and unskilful the labourer, the more valuable would his commodity be, because more time would be required in its production. The labour, however, that forms the substance of value, is homogeneous human labour, expenditure of one uniform labour power. The total labour power of society, which is embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous mass of human labour power, composed though it be of innumerable individual units. Each of these units is the same as any other, so far as it has the character of the average labour power of society, and takes effect as such; that is, so far as it requires for producing a commodity, no more time than is needed on an average, no more than is socially necessary. The labour time socially necessary is that required to produce an article under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time. The introduction of power-looms into England probably reduced by one-half the labour required to weave a given quantity of yarn into cloth. The hand-loom weavers, as a matter of fact, continued to require the same time as before; but for all that, the product of one hour of their labour represented after the change only half an hour’s social labour, and consequently fell to one-half its former value.

Clearly, formally defined.

3. Paul Cockshott is a computer scientist who applies the Labor Theory of Value and classical economics into computing, algorithms, and so on, and has worked with other economists and statisticians on various books. Given that he is a professor, has published, respected works, and is well known for his knowledge of oppositional arguments towards Neoclassical economics, its not a surprise he doesn't have articles in so-called "credible [economic] academic journal[s]"; he opposes all mainstream economics because they were created only to reinforce Capitalist hegemony. If you prefer, you can look at Dr. Howard Nicholas, who used to be a staunch advocate of Neoclassical economics until he actually read Marx.

4
End-Da-FedOP•

  1. Nope, that's a lie.

  2. Marx: "Something that's produced with a minimum of A, but no more than B, at the same time the values of A and B can change at any time depending on the two variables of skill and intensity and this is somehow aggregated magically through society and I shall not provide any objective measurement for any of these values or variables...muh worker's exploitation" Thank you for proving my point.

  3. SMH

Paul Cockshott is a computer scientist

I know he's not an economist and doesn't know shit about economics.

has published, respected works, and is well known for his knowledge of oppositional arguments towards Neoclassical economics

He's never published a single study in any credible academic journal. Nobody has ever cited Paul Cockshott in any study from any credible academic journal. Again, Paul Cockshott is a fraud and is about as credible a citation for economics as Alex Jones is for Pizzagate.

2
Holophonist•

So if a firm is really bad at creating chairs and takes 1000 hours to make a chair, but is subsidized by the revenues they make from selling tables, what happens to the "value" of chairs in that society?

1
SihplakMarxism-Leninism, Central Planning, SW/CC, LTV•

In this case, we can also refer to the quote from Marx I used below (emphasis mine):

Some people might think that if the value of a commodity is determined by the quantity of labour spent on it, the more idle and unskilful the labourer, the more valuable would his commodity be, because more time would be required in its production. The labour, however, that forms the substance of value, is homogeneous human labour, expenditure of one uniform labour power. The total labour power of society, which is embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous mass of human labour power, composed though it be of innumerable individual units. Each of these units is the same as any other, so far as it has the character of the average labour power of society, and takes effect as such; that is, so far as it requires for producing a commodity, no more time than is needed on an average, no more than is socially necessary. The labour time socially necessary is that required to produce an article under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time. The introduction of power-looms into England probably reduced by one-half the labour required to weave a given quantity of yarn into cloth. The hand-loom weavers, as a matter of fact, continued to require the same time as before; but for all that, the product of one hour of their labour represented after the change only half an hour’s social labour, and consequently fell to one-half its former value.

Given our hypothetical example of factories A, B, and C, introducing the outlier factory (let's call it factory D) producing chairs at one chair per 1000 hours would, in all likelihood, not actually affect the SNLT, because it is such an extreme outlier, and would also imply that the application of labor and usage of common technology is not found in said factory. It being subsidized by tables would just mean that the factory would still be operating, just with the costs covered by the table revenue. This is all to presume that factories A, B, and C were examples of more common chair-making factories in terms of productivity, rather than being out of the ordinary.

However, if we had a society where (to put things more reasonably) most factories produced one chair in, say, 100 hours, but we had the same three factories A, B, and C producing at the rates originally listed (4/hour, 3/hour, 5/hour respectively) then those three factories would be making super-profits compared to the SNLT of the given society, especially given the massive differential between even the lowest, 3 chairs/hour, and the norm, 1 chair/100 hours. From this, we would see a quick improvement in efficiency of SNLT. This would be like Marx's example; in this hypothetical situation, the society went from making chairs very inefficiently and slowly at 1c/100hr to making now a higher amount of chairs per hour on average (the average would depend on the overall amount of chair factories with now-antiquated methods and technology versus the amount of new factories. In an example of 100 old factories compared to 3 new ones, we'd have 13c/4hr, or 3.25c/hr, as our new average). Now, the chairs produced by the factory making 1c/100hrs don't make more valuable chairs, but instead make less valuable chairs more slowly, and the only way that they can stay competitive now is to either innovate to increase productive efficiency, lower prices while being inefficient (which could run them out of business), or some other method of the sort.

In short, it's safe to say that extreme deviations from the norm likely would not be factored in (though, as Paul Cockshott explains in this video in terms of prices related to value, we could extrapolate that the same usage of chaos theory could be used to determine likelihood of various deviations from the norm in productivity) given that they are not representative of the utilization of common tools of society and the like. The values of chairs would not be drastically changed unless the common tools of society changed.

If you're interested, this video does a good job explaining this concept in simple, understandable language.

2
Dav1d547•

What about when all companies start working less effectively and progressively increase SNLT average. What about when people who don’t agree with that system are removed from positions of expertise and replaced by inept workers (which is exactly what has happened in practice in Cuba, Venezuela). You can’t apply a system like communism to humans, since while we are all created equal, and should have equality of opportunity, we are NOT equal. I work harder than the usual person, why should I not be compensated more? I am smarter than the usual person, why should I not be paid more for my ideas. It all boils down to people not being equal. Also, if Paul Cockshott is not an economist why his work would be quoted for explaining how communism would work in an economy is beyond me. It proves the point of what happens under communism, inept people are placed in positions they have no business occupying. Incentive and competition are a requirement for any healthy and functional economy.

1
Holophonist•

This seems like an overly verbose way of saying "yes it would mean the chairs have more value, but probably not by much." So given that 1 bad firm raised the value of a chair by being inefficient, doesn't that seem counter intuitive? Under the LTV, with full employment the amount of value in an economy never changes. That doesn't seem like a good way of defining value.

1
SihplakMarxism-Leninism, Central Planning, SW/CC, LTV•

This seems like an overly verbose way of saying "yes it would mean the chairs have more value, but probably not by much."

No, this is not what I said. In the case of it being an outlier, especially an extreme outlier such as in your example, it would not have more value, it must operate along with the SNLT. As such, even though it takes more time to produce, the value of it is the value of the SNLT. In my above response I said it as the following:

Given our hypothetical example of factories A, B, and C, introducing the outlier factory (let's call it factory D) producing chairs at one chair per 1000 hours would, in all likelihood, [factory D] would not actually affect the SNLT, because it is such an extreme outlier, and would also imply that the application of labor and usage of common technology is not found in said factory.

1
alienated_proleAbolish the Spectacle•

You don't understand it.

2
End-Da-FedOP•

You don't have a say in the matter.

2
alienated_proleAbolish the Spectacle•

no u

1
End-Da-FedOP•

You are correct. I can only align my opinions with reality and established facts. Therefore, see my OP.

2
alienated_proleAbolish the Spectacle•

I can only align my opinions with reality and established facts.

fake news

1
toiletpapershortageLONG LIVE MARX, ENGELS, LENIN, AND STALIN!•

https://www.youtube.com/watch?v=emnYMfjYh1Q

1
End-Da-FedOP•

Nope. That's fake and never been credibly peer-reviewed.

2
toiletpapershortageLONG LIVE MARX, ENGELS, LENIN, AND STALIN!•

http://users.wfu.edu/cottrell/eea97.pdf http://bnarchives.yorku.ca/308/2/20101200_cockshott_nitzan_bichler_testing_the_ltv_exchange_web_files/image001.jpg

Here are some studies providing empirical evidence in support of the LTV.

1
End-Da-FedOP•

They are both from the same fake report illustrated in your video.

1
toiletpapershortageLONG LIVE MARX, ENGELS, LENIN, AND STALIN!•

They are both from the same fake report illustrated in your video.

They are academic studies, not some fake report. Stop denying evidence.

1