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The labor theory of value (LTV) is a theory of value that argues that the exchange value of a good or service is determined by the total amount of "socially necessary labor" required to produce it.
Marx never referred to his own theory as a "labour theory of value"; [5] his own critique of the political economists was, that they all failed to explain satisfactorily how the determination of product-value by labour-time actually worked—they assumed it, but they did not explain it consistently (see below). Thus, Marx often regarded himself ...
The value-creating ability of labour is most clearly visible when all labour is stopped, for example during a strike or a disaster. If all labour is withdrawn, the value of the capital assets worked with will normally deteriorate, and in the end, if all labour is permanently withdrawn, nothing remains but a ghost town.
At the heart of the argument is the labour theory of value and the related premise that profit represents surplus value created by labour working above and beyond the amount needed to reproduce itself, as represented by wages and the buying power of wages viz. the price of commodities (particularly necessities). In other words, profit is what ...
Adam Smith agreed with certain aspects of labor theory of value, but believed it did not fully explain price and profit. Instead, he proposed a cost-of-production theory of value (to later develop into exchange value theory) that explained value was determined by several different factors, including wages and rents. This theory of value ...
Steve Keen argues that if you assume the labor theory of value is wrong, then this obviates the bulk of the critique. Keen suggests that the TRPF was based on the idea that only labor can create new value (following the labor theory of value), and that there was a tendency over time for ratio of capital to labor (in value terms) to rise.
Labor-power might be seen as a stock which can produce a flow of labor. Labor, not labor power, is the key factor of production for Marx and the basis for earlier economists' labor theory of value. The hiring of labor power only results in the production of goods or services ("use-values") when organized and regulated (often by the "management ...
Mirowski (1989) for example accuses Marx of vacillating between a field theory (labour-time currently socially necessary) and a substance theory of value (embodied labour-time). This kind of criticism is due to a confusion of the process of labour in general (adding use to a product, which under capitalism equates adding value to a commodity ...