Like Marx, I am not an economist - Politics Forum.org | PoFo

Wandering the information superhighway, he came upon the last refuge of civilization, PoFo, the only forum on the internet ...

Workers of the world, unite! Then argue about Trotsky and Stalin for all eternity...
Forum rules: No one line posts please.
#1418694
I know all of you communists are very well versed in marxist babble. Well explain this to me.

Marxist economics is based on his labor theory value which states that "the value of a commodity is determined by the quantity of socially necessary labour time required to produce it."

But, this is wrong. Isn't the value of a commodity based on its demand? I mean if no one wants product x, it doesn't matter how much labour was put into it... no one wants it.

As I said, I'm not an economist and if I had to guess I'd say that the overwhelming majority of you guys aren't either. But please, try to explain.
User avatar
By Le Rouge
#1418707
If supply and demand are in equilibrium the value of a commodity is equal to the socially necessary labor-power needed to produce said commodity. Supply and demand skew this value in one direction or the other: higher market price (for example, gold) or lower market price.
User avatar
By battousai567
#1418708
He also says that a commodity has a use-value, which determines whether the labor done is useful. If there is no demand then the labor done is useless and adds no value.

Someone else can probably explain much better.
User avatar
By jaakko
#1418729
Indeed, Marxist theory makes it clear that a commodity without 'use-value' i.e. people wanting it has no value and thus isn't a commodity to begin with. What sets the Marxist LTV apart from most other value theories is that it states that use-value doesn't determine value, implying that the value doesn't depend on how much commodities are needed or wanted. Extremely monopolised situations may give the impression, however.
By AJ_Politico
#1437734
What you learn in economics is only from one particular school of economics called classical economics. There are many other schools of thought, such as marxist economics, keynesian economics, participatory economics, and so on. Different schools of thought have different theories.
User avatar
By Lone Gunman
#1438112
If supply and demand are in equilibrium the value of a commodity is equal to the socially necessary labor-power needed to produce said commodity. Supply and demand skew this value in one direction or the other: higher market price (for example, gold) or lower market price.


My personal belief is that Marxist economics is more of a reaction to what was in his day a perhaps far less regulated and seemingly more corrupt capitalistic system (i.e. not enough corporate laws, not enough government intervention, not enough socialist schemes, not enough charities and the abuse of power by royal families and their imperialism).

Today, while capitalism is far more aggressive it is (I'd like to think it is at least) regulated a bit better. We've had decades, centuries to practice this system. Capitalism is perhaps the world's most successful economic system and coupled with sensibility and more liberal schools of political thought capitalism is perhaps here to stay for a long time.

Supply and demand is what drives our economics. For example if a labourer spends fifty hours producing a product, he'll charge people based on that work. But if demand for that increases, he will have to increase his own labour input or expand the labour force required to produce the product in less time and in greater quantity. I understand the supply/demand equilibrium is good enough, although this does fluctuate and if demand falls below a certain margin and profits can no longer be made, well then obviously the product goes out of production.

Now in a Communist system the idea is a command economy. Things are only produced if there is enough want or rather NEED for them. They don't consider social trends, it's all too homogeneous. But in reality nobody cares about such things. If someone wants a TV they aren't going to give a damn about how many people were asked to make that TV or how long it took. They know the workers got paid and most workers will always want to get paid. I haven't seen many labourers actually WANT Communism. Most just want a fair go and more rights.

I don't think a command economy will ever work. Nobody wants to be told that this is the bare minimum they can have. We work to make money to buy things we want. Be it a physical item or a holiday we work for ourselves and we work to please ourselves. We work so we can live. We pay taxes as our contribution to the state. This is the most balanced system. It's not perfect, but if we jump to any extremes expect some kind of crisis. I mean every time a nation has attempted to radically overhaul the current capitalist system they have ultimately met poverty and even more corruption.

It's not just not possible to find any workable alternatives so I don't know why people even bother trying. It's all meaningless. The revolution is over. It failed. Get over it people. Shit. I mean yes, I want reforms. Reforms and more reforms - as many as it takes to help workers and to keep the capitalist system stable and as fair as possible. I call this a realistic economic model.

Lone Gunman
User avatar
By ThereBeDragons
#1438123
I will add second question -

How does the labor theory of value account for the amount of capital necessary to produce a good?
User avatar
By Lone Gunman
#1439014
I will add second question -

How does the labor theory of value account for the amount of capital necessary to produce a good?


Because in an ideal Communistic society nothing would have a capital value, there wouldn't be money so to speak. Everything would be made based on the moral and labour value of the product, which I think is ridiculous personally and goes against how human beings operate.

I personally think capitalism will always be the end product of a society which experiments first with bartering and subsistence economies but later advances to the point where technology can assist in the creation of greater surpluses and where demand for more exotic items increases. For example to make a very large bartering system more efficient, we created money which has a credit value. So instead of exchanging two apples for a pineapple we decided that a pineapple would have this value and an apple would have another value. Then we decide to work for credit (money) and use that to buy items (so the farmers get paid money as well).

Human society was always going to evolve in some way or another into a capitalistic one. Communism is actually a very primitive economic system and is most successful in communities which lack advanced technology such as indigenous tribes. People with less technology and less knowledge of an advancing world (and who are generally very isolated and restricted physically) are the only true Communists. Communism is not an evolution of political or economic principles it is the exact opposite, it is a devolution.

While it's very possible for people to transcend capitalism, it's quite unlikely. Not until technology transforms capitalism into something different as it once did subsistence economies. It'd take centuries and if it happens it happens but at this rate I highly doubt it. People will always work to get resources to make things and expect to be paid for it.

Lone Gunman
By matty_uk
#1487823
"Because in an ideal Communistic society nothing would have a capital value, there wouldn't be money so to speak. Everything would be made based on the moral and labour value of the product, which I think is ridiculous personally and goes against how human beings operate."

You don't know what the Labour Theory of Value is, do you?
By matty_uk
#1487826
"While it's very possible for people to transcend capitalism, it's quite unlikely. Not until technology transforms capitalism into something different as it once did subsistence economies. It'd take centuries and if it happens it happens but at this rate I highly doubt it. People will always work to get resources to make things and expect to be paid for it."

Indeed, this is the Marxist position. A new trend I've noticed emerging within Marxist circles is the belief that, as capitalism tends to automate production increasingly to cut labour costs, we'll reach a stage where there is no necassary work left to be done, meaning it's possible and necassary to create an automated and planned economy with virtually no human labour required. I think this is an inevitability; look at all the useless jobs in marketing, telesales, service sector etc.
User avatar
By Vladimir
#1487849
Indeed, this is the Marxist position. A new trend I've noticed emerging within Marxist circles is the belief that, as capitalism tends to automate production increasingly to cut labour costs, we'll reach a stage where there is no necassary work left to be done, meaning it's possible and necassary to create an automated and planned economy with virtually no human labour required. I think this is an inevitability; look at all the useless jobs in marketing, telesales, service sector etc.

Can I see some source that states this?

Automated production is an expensive toy of the bourgeois within developed countries, and switching the mode of production to automated is not efficient for capital. It is far more efficient to use conventional man-operated machinery.
The service sector growth in developed countries is the result of production moving to underdeveloped countries, where labour is cheap and exploitation can be efficient. This result in a dormant, relatively well-off "service" proletariat at home, which is beneficial of course.
It's not a result of an automated mode of production growing. There isn't really a future for it
By matty_uk
#1489886
I don't mean literally automated with no human input, but surely as investment in more efficient productive apparatus can cut costs allowing a business to undercut it's competitors, there must surely be a trend towards less human labour in manufacture etc? Don't know where to find any stats to demonstrate this though.
User avatar
By jaakko
#1489922
The increase of automation on the productivity of labour is multiple compared to any decrease it may have on the intensity of labour. Considering that the proletariat is the world's fastest growing class (with the other existing massive class i.e. the peasantry largely becoming semi-proletarians and ultimately merging into the proletariat), the general trend is not towards less human labour in capitalist production in total even though there certainly is a trend towards less labour power consumed per product.
User avatar
By Stan
#1497024
the value of a commodity is determined by the quantity of socially necessary labour time required to produce it."


And the value of a commodity changes over time:

The first hand-held calculators were several hundred dollars. Then a few years later these calculators could be obtained for $4.99 USD and in some instances for free.

The first cell phones were extremely expensive and only available to the very rich and elite. Now in America even the homeless and those in the lower end of the economic scale walk around with a cell phone.


Capitalism has the ability to elevate the standard of living and it will ultimately transform itself into the communist utopia that many wish and dream for planet Earth.
By Wraith
#13245927
Indeed, Marxist theory makes it clear that a commodity without 'use-value' i.e. people wanting it has no value and thus isn't a commodity to begin with.


Use value is not determined by the market since there is no market in a socialist economy, rather it is determined by the intrinsic properties of a commodity to perform a task, but since you cant determine how useful a thing is to people without a price system and a demand for it according to subjective evaluations of individuals, use-value is meaningless and also the concept of necessarily labor time to determine value.
User avatar
By Eauz
#13245940
Wraith wrote:Use value is not determined by the market since there is no market in a socialist economy, rather it is determined by the intrinsic properties of a commodity to perform a task
Just to clarify things, the use-value of a commodity is viewed in terms of objectivity or in other words a certain quality (or qualities) that belong to the commodity.

Wraith wrote:use-value is meaningless and also the concept of necessarily labor time to determine value.
Use-value and necessary labour time are two seperate parts that you're attempting to connect as having a common connection to each other. The necessary labour time is only the amount of time required to perform a task in creating a commodity. What is lost in all of this is that at this point is the evaluation, there is no discussion of wage being connected in any form to use-value or necessary labour time. If you can't get your head around this last point, then you'll continue to falter on this issue.
By Wraith
#13247172
Use-value and necessary labour time are two seperate parts that you're attempting to connect as having a common connection to each other.


I understand that they are different concepts in marxist theory so no confusion there, though I admit I don't agree with that theory.

there is no discussion of wage being connected in any form to use-value or necessary labour time.


You lost me there, I didnt mention wages in my comment.
User avatar
By Eauz
#13247289
Wraith wrote:You lost me there, I didnt mention wages in my comment.
There is no direct connection between the wage (of present society) to use-value or necessary labour time in these terms. We are looking at these two concepts in regard to the production of commodities in general and comparing them to other commodities. Do not confuse, in regard to the LTV, the concept of wage in terms of the present wage system.
User avatar
By Nets
#13247744
What you learn in economics is only from one particular school of economics called classical economics. There are many other schools of thought, such as marxist economics, keynesian economics, participatory economics, and so on. Different schools of thought have different theories.


Keynesian economics is pretty much identical to classical/neo-classical economics, they disagree about one equation in their macro models, big whoop. Though one should look at all the schools, one should also remember that something like 95%+ of professional economists are Neo-Classical/Keynesians.

Also, one should note that many classical economists flirted with LVT-like ideas. It is not a bogus idea, you are simply using a labour-hour as the numeraire (unit of account) rather than, say, dollars. LVT is far from the most problematic aspect of Marxism (from my admittedly neo-classical viewpoint).
User avatar
By Eauz
#13248542
Nets wrote:Also, one should note that many classical economists flirted with LVT-like ideas.
It should be noted that the LTV was developed through the understanding of the capitalist economy. Marx nor any first tier Classical economist accepted the LTV as a valid theory for capitalist economies. It also had nothing to do with developing a socialist economy in any form.

Did Carl just use a slur for comedic effect on ran[…]

I honestly have not experienced any of these thing[…]

Election 2020

It doesn't really matter what we think. It only m[…]

Trump's Dumb Economics

It looks like China's leader is playing Chinese c[…]