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The mystery of the labor theory of value: Why is the value of commodities determined by labor?
In the complex framework of economics, the Labor Theory of Value (LTV) provides a key perspective that reveals the process of commodity value formation. According to this theory, the exchange value of a commodity is primarily determined by the socially necessary labor time required to produce it. The concept's most famous advocate is Karl Marx, but its roots can be traced back to the work of classical economists such as Adam Smith and David Ricardo.
According to the labor theory of value, the value of a commodity refers to the total amount of socially necessary labor required for its production;
Smith's view that the price of a commodity reflects the amount of labor it can "save" played an important role in early economics. However, with the progress of society, the formation of value has become more complex, especially in the context of contemporary capitalism, where the market price of commodities is also affected by supply and demand and market conditions.
Definition of Value and Labor
The "labor" in the labor theory of value does not only refer to physical work, it includes all the socially necessary labor required to produce commodities. This means that both direct labor and indirect labor (such as the production of capital equipment) must be taken into account.
According to Ricardo and Marx, the labor component includes the labor required to develop any real capital, that is, the "natural price" of a commodity consists of the "dead labor" of these labors.
Marx called this "socially necessary labour", sometimes referred to as "real cost" or "absolute value".
The relationship between value and price
While LTV argues that the value of a commodity is primarily determined by labor, it also recognizes that the actual price of a commodity is affected in the short term by the profit motive and market conditions. In the long run, labor value is seen as the "center of gravity" of prices.
According to Marx, the market price of a commodity will correspond to its natural price, which depends on the amount of labor required for its production.
This view challenges mainstream economics' theory of value based on subjective preferences and emphasizes how the importance of value and price are intertwined when supply and demand are in equilibrium.
Value added in the labor process
It is crucial to understand how labor both preserves value and adds new value in the production process. Under normal circumstances, the value of a commodity rises as the labor time and intensity required increase. Marx's theory holds that this value will only be properly increased if labor is performed with average skill and average productivity.
The production process involves not only labor, but also certain labor tools and means of production.
For example, when a group of workers use coffee beans and water to make fresh coffee, they not only add value to the materials, but also transfer the value of the production tools to the final product. Ultimately, the value of the coffee is made up of the “constant capital” used and the value added by the workers in a given period of time.
History of the development of the theory
The origin of the labor value theory is very complex. It is not the patent of a certain thinker, but the result of independent development by multiple thinkers in different periods. Aristotle, Thomas Aquinas, and even Ibn Haldon, among others, have contributed to the theory.
However, Adam Smith and David Ricardo played a key role in the theory, and their work contributed to a deeper understanding of value and labor relations. Smith believed that in primitive society, the amount of labor directly determined the exchange value of commodities; while Ricardo further explained the relationship between the relative amount of labor required and its production value.
Ricardo pointed out that the value of a commodity depends on the relative amount of labor necessary in its production, not on the wages of the laborers.
As economics has evolved, these early theories have been challenged by the analytical methods of modern economics, but they remain important in exploring the nature of value and the role of labor in it.
Behind this theory, we are not only discussing the issue of economic value, but also how we view our work, the price of goods and their impact on society. In today’s capitalist system, we must ask: In this ever-changing economic environment, does the labor theory of value still accurately reflect the true value of commodities?
