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In classical economics, the value of an object or condition is the amount of discomfort/labor saved through the consumption or use of an object or condition (Labor Theory of Value). Though exchange value is recognized, economic value is not, in theory, dependent on the existence of a market and price and value are not seen as equal. This is ...
Within an enterprise, for example, there were many tasks that had to be performed, such as cleaning, record keeping, and bookkeeping, and repairs, which did not directly contribute to producing and increasing wealth in the sense of making a net addition to it – in other words, such tasks represented a net cost to the enterprise which had to ...
That is, the concept abstracts from the particular characteristics of all of the labor and is akin to average labor. "Socially necessary" labor refers to the quantity required to produce a commodity "in a given state of society, under certain social average conditions or production, with a given social average intensity, and average skill of ...
Socially necessary labour time in Marx's critique of political economy is what regulates the exchange value of commodities in trade. In short, socially necessary labour time refers to the average quantity of labour time that must be performed under currently prevailing conditions to produce a commodity.
The basis for labor-time calculation is found in Karl Marx's analysis of value in capitalism. However, Marx was vehemently opposed to any proposal for using labor-time as the basis for socialist calculation because his concept of socially necessary labor time was a conceptual framework for understanding and analyzing value in capitalism.
For example, when new technology or new business practices increase the productivity of labor a capitalist already employs, or when the commodities necessary for workers' subsistence fall in value, the amount of socially necessary labor-time is decreased, the value of labor-power is reduced, and a relative surplus value is realized as profit ...
On this view, we cannot validly say that products took a certain amount of labour, energy and materials to make, and compare them on that basis. It follows that the Austrian School thinks most contemporary economic theory is invalid, as it relies in one way or another on the aggregation and comparison of actual and ideal prices.
He proves that this theorem is logically false. However, Marx himself never argued that surplus labour was a sufficient condition for profits, only an ultimate necessary condition (Morishima aimed to prove that, starting from the existence of profit expressed in price terms, we can deduce the existence of surplus value as a logical consequence).