The Labour Theory of Value?

I just came across this labour theory of value (LTV) thing. Apparently it was a big deal in classical economics and is still a big deal in Marxism, so I want to understand it. But it seems so obviously false that I suspect I don't. I think this forum has some self-proclaimed Marxists on it, so maybe I can be helped here. From what I understand the LTV holds that labour is the source of value. But isn't this easily refutable by noticing that things that took no labour, such as wild berries, are valuable?

Suppose there is a wild berry bush with VERY tasty berries, which is guarded by an armed man who laid claim to it and sells its berries. Suppose nearby is another wild berry bush, also guarded and marketed by an armed man, but this bush has somewhat bitter berries. People want the tasty berries more, people value them more, people are willing to pay more for the tasty berries, and are willing to do more to get those berries. Now, even though no labour has gone into either bush, isn't it true that the tasty bush not only has value, but that it has more value than the other bush? And if not, what the hell does the word "value" mean in the LTV?

I've heard one person say that value in the Marxist sense means something more along the lines of moral significance. Like, something that took a lot of labour to produce ought to have more care/attention/desirability regarded towards it. And that this is one problem with capitalism: that it values things that are in demand, rather than things that took a lot of labour to make. But I think this guy got ganged up on by Marxists so I don't know how much I trust this one...

Anyways, I'm pretty confused. Pls halp.

Raw commodities like wild berries can still be measured in the labour required to harvest them. Lumber has to be cut down, coal has to be mined etc. Not all labour results in a manufactured good. In your analogy, the person who owns the bush is also presumably picking the berries. If people are picking their own berries for themselves and not distributing them to others, then no money is changing hands and the idea of monetizing their labour. If however they owner charges money for the right to pick his berries and makes the customers do it themselves, then his "labour" is in the guarding of the land, as you put it.

Even Adam Smith said that literal labour=value markets no longer existed in his time of industrial infancy. The owner of the means of production and the merchant distributors take their share and contribute to the final value passed on to the consumer. The more hands touch a product, even without manually labouring over it, the more its price increases, even if we might say the actual utility of the thing hasn't changed at all (utility should actually decrease, as each new hand has a potential to break or soil it; entropy). That process of entitlement and mark-up is what Marxists say is immoral about the capitalist system as far as a product's value is concerned, ownership in and of itself should not be qualified as labour. If the worker owned the means of production, then the final price would return in part or in full to the original "primitive" value imparted only by his own physical and intellectual labour. That is the "morale" exchange of finished goods. That doesn't take distribution into account though. If he distributes his own goods, then he has to dictate how much his time is worth, but he'll lose out on potential business. Should he pass that on loss to the consumer, essentially compensating for low supply from the production-side? If he out-sources distribution, then an extra pair of hands increase his product's value "immorally". Distribution is less immoral though than entitlement by property rights. When he begins to outsource production, then he becomes a capitalist.

Subjective value takes demand and supply into account. The labourer will not only charge the minimum for what his labour is worth, but also extra if the consumer is willing to put up with it. Everyone needs a blacksmith and he's the only one in town... a little extra silver for the convenience of not walking ten miles can slip by without outrage. Demand can even be entirely sentimental and devoid of practical use, like a rare comic book being valued in several thousand dollars because there are so few of them left or its production was ripe with scandalous trivia. The owners of the few issues still in existence do not even read the comics for fear of damaging them - they simply display them on the mantle and brag about owning them. That behaviour can not exist in pure labour theory, and a Marxist would decry it as a symptom of bourgeois "conspicuous consumption" run rampant - capitalism at its most morally bankrupt.

Then you have the problem where innovations in efficiency that reduce the workforce while maintaining or increasing output logically increase the value of a single labourer's man-hours yet with less overhead and high supply, the market value of his product will drop rather than rise. His valuable hours may be appreciated somewhere else by smaller factories, less pollution, rising real estate values etc., but he will not be compensated in his wages, especially if the training he needs to operate the machinery is now the lowest level of skilled labour in the progressing society.

The Soviets "solved" these problems with subsidization and price fixing, and lofty forecasts of planned, gradual economic growth, based on poorly collected or arbitrary data. In your berry bush analogy, the land would be collectivized and the distribution of both berries would be regulated and possibly priced equally, regardless of the higher demand for the sweeter ones. The farmers/guards living on the land would probably sell a surplus of their berries illegally on the black market for personal profit. On the black market, the risk of being caught by law enforcement would become a "labour" factored into the price.

So in summary, it's false because it's incomplete, but as a component in other more extensive theories, its principles have limited application and shouldn't be discarded entirely.

If however they owner charges money for the right to pick his berries and makes the customers do it themselves, then his "labour" is in the guarding of the land, as you put it.

Click to expand...

He's not guarding it in the sense of protecting it from destruction. He's guarding it as in preventing others from using it if they don't pay him, even though he didn't plant it or help it grow or anything.

Even Adam Smith said that literal labour=value markets no longer existed in his time of industrial infancy.

Click to expand...

So Adam Smith believed the LTV stopped "being true"?

The owners of the few issues still in existence do not even read the comics for fear of damaging them - they simply display them on the mantle and brag about owning them. That behaviour can not exist in pure labour theory, and a Marxist would decry it as a symptom of bourgeois "conspicuous consumption" run rampant - capitalism at its most morally bankrupt.

Click to expand...

Wow that seems pretty dumb. What if the man who owns it gets far more enjoyment out of showing it off and bragging than anyone would get from reading it? What if he gets far more enjoyment from showing it off and bragging than people get from going to bed with a full stomach?

devoid of practical use

Click to expand...

The distinction between practical and impractical use seems rather dumb to me. Enjoying the displaying of a comic book is an impractical use, but using it as kindling which makes a fire which keeps you warm which is enjoyable is practical? It seems like the term "practical use" simply means the enjoyment you get out of something is indirect.

So in summary, it's false because it's incomplete, but as a component in other more extensive theories, its principles have limited application and shouldn't be discarded entirely.

Click to expand...

I don't know. It seems like it's false due to its premise. Suppose a drug that makes people feel good is invented, and it has no bad side effects. Suppose one dose of this drug takes 5 hours of labour to make. Suppose an ax also takes 5 hours of labour. Suppose many doses of the drug are made, but before they're all used up everyone gets forever immune to the good effects of the drug. Doesn't the drug lose value? Would a Marxian go around insisting a dose of the now-unless and unwanted drug is as valuable as an ax? What kind of system of value is one which doesn't account for whether or not something has value to anyone?! If something has value, yet no one values it, then isn't that claiming value is a property of the item? Isn't that nutty?


I asked a question to a Marxist blogger and he pointed out there are different kinds of value in Marxism. It seems what I'm talking about is called use-value? I don't get any of this... lol

Labour only has value if someone is willing to pay for it.
I can break rocks all I want, but I won't be paid to do it unless breaking those rocks is something someone else wants done.
Work without objectives is a sale without products.