[tornadouk]

1) How do you know surplus value exists? How do you know that wage labourers aren't paid the value of what they put into a product.

2)Why is it that all commodities are traded for their value except labour?

[jaakko]

1) How do you know surplus value exists?

Otherwise profit couldn't exist.

2)Why is it that all commodities are traded for their value except labour?

Labour is not a commodity, but activity that consumes the commodity that is labour power. Labour power is traded for its value. The only speciality of labour power among other commodities is that when it is consumed in the production process it, unlike other commodities, produces more value than is its own value.

[foilist13]

Otherwise profit couldn't exist.

That is not entirely true. Value can be created from nothing simply by convenience. I'll use an example that yourstruly wrote in a different thread.

Perhaps an example would be appropriate. Not too long ago, a friend of mine and i decided we were going to make some extra pocket money by selling donuts during school. Everyday, my friend was in charge of buying the donuts. He did this because he lived near a donut shop, and relatively near the school, while i had an hour commute on a bus from the other side of town, which made it impractical for me to purchase the donuts. Also, i had no money of my own to spare, and he did. We worked out an arrangement in which i would aid him in his sales, and he would pay me some percentage of the profits as a wage.

We didn't sell all the donuts we bought everyday. Sometimes we had too many donuts, sometimes we had the wrong kinds of donuts, sometimes there was competition...every donut we didn't sell, my friend lost money. There was a risk involved in his investment...it required his labor and his ingenuity to determine if it was a good investment or not. That was his labor, in addition to the manual labor he did in sales, and in arranging for the donuts to be bought.

They weren't paying just for the donuts...they were paying for donuts outside the classroom at a convenient time. The so when my friend Trevor buys donuts for fifty cents and sells them for a dollar a piece, he is CREATING value out of NOTHING everytime he does that. THe students are richer, because they were able to exchange their dollar for a donut that at that moment was worth more to them. THe donut salesman is richer because he was able to exchange his donuts for money that worth more to him than the donuts he made. And my friend is richer because the labor of transporting the donuts, and the ingenuity that allowed him to conceive of the donut are worth less to him than the money he made when he pocketed the difference in market value.

[Dr House]

In addition to that, all profits must come from investment, and all investments are made of money, which is procured through labor. Therefore, even if no labor went into picking investments profits are still nothing more than the amplified value of your previous labor.

[FallenRaptor]

That is not entirely true. Value can be created from nothing simply by convenience.

Going by the labor theory of value, value is created by labor.

I'll use an example that yourstruly wrote in a different thread.

The donuts that were bought are considered past value, since labor was used to create those donuts in the first place. If it was possible to make revenue from selling the donuts, then new value was created by the vendor. If the buyer of the donuts does not pay the vendor the full value of the labor he performed selling the donuts to keep some of the money(surplus value), the buyer is exploiting the vendor.

[Dr House]

Going by the labor theory of value, value is created by labor.

Yes, but labor theory of value is pretty much complete crap. Therefore, it's best if we not go by that.

The donuts that were bought are considered past value, since labor was used to create those donuts in the first place. If it was possible to make revenue from selling the donuts, then new value was created by the vendor. If the buyer of the donuts does not pay the vendor the full value of the labor he performed selling the donuts to keep some of the money as profit, the buyer is exploiting the vendor.

But then why would the buyer even do the vendor the service of forgoing the product of his own labor to aid the vendor, who would never have the opportunity to sell the donuts otherwise?

[FallenRaptor]

Yes, but labor theory of value is pretty much complete crap.

In your opinion.

But then why would the buyer even do the vendor the service of forgoing the product of his own labor to aid the vendor, who would never have the opportunity to sell the donuts otherwise?

Obviously to make money.

[Vladimir]

The donuts that were bought are considered past value, since labor was used to create those donuts in the first place. If it was possible to make revenue from selling the donuts, then new value was created by the vendor. If the buyer of the donuts does not pay the vendor the full value of the labor he performed selling the donuts to keep some of the money(surplus value), the buyer is exploiting the vendor.

In that passage he actually first claims that value simply appeared out of nowhere, and later goes on to claim that in fact it didn't, but that it was created by the "labour" that had to be done inventing such a way of selling

[Dr House]

Obviously to make money.

During which process he made the vendor money, and provided a more convenient location to donut shoppers than the supermarket across town. I see no losers in that transaction.

And the buyer's labour is what exactly?

Whatever he did to procure the money necessary to make the investment. That money did not come out of thin air.

[foilist13]

Obviously to make money.

The desire to make money in the market produces efficiency. The tired hungry students would not have gotten the donuts otherwise, for the original seller certainly would not have brought the donuts to them.

In that passage he actually first claims that value simply appeared out of nowhere, and later goes on to claim that in fact it didn't, but that it was created by the "labour" that had to be done inventing such a way of selling

The value from nowhere is in the ingenuity of providing the donuts in a place where they are more valuable than where they were purchased. That is where the money comes from. Value does not come from nowhere, value comes from creativity.

[Vladimir]

Whatever he did to procure the money necessary to make the investment. That money did not come out of thin air.

forgetting the ultra petit-bourgeoise subsistence "lemonade-selling" "enterprises" the money comes from capital resereves accumulated by other/previous enterprises. And guess how it's accumulated by them...

The value from nowhere is in the ingenuity of providing the donuts in a place where they are more valuable than where they were purchased. That is where the money comes from. Value does not come from nowhere, value comes from creativity.

I applaud your ingenuity, but the real difference is from the labour done by transporting it to the new location and selling it there... if you can create value by sheer thought you are surely a wizard

[foilist13]

I applaud your ingenuity, but the real difference is from the labour done by transporting it to the new location and selling it there... if you can create value by sheer thought you are surely a wizard.

hah excellent point. However the value would not have existed without the ingenuity, and it is possible to become a billionaire with only creativity and non-physical labor.

Facebook is a perfect example. The creator of Facebook was a college student who saw that the website that already existed, Myspace, was not as well suited to what it was being used for as it could be. Myspace was created as an online dating site, but is used as a place to talk and socialize by youth. He simply took that idea and made it better by creating a place for youth and adults to do just that along with several other additions including applications. He did work hard, which seems to be the favorite phrase right now, and become a billionaire. A factory worker who puts in the same amount of hours does not even compare to the kind of wealth that this simple college student gained.
This is where the value is created through creativity rather than labor.

[tornadouk]

Peter wants to make a Chair, however to make a chair he requires a hammer and a saw. Once a hammer and a saw have been used 3 times they break. He makes a hammer and a saw and the finishes the chair. Paul also wants to make a chair, however he has no hammer or saw. Peter agrees to lend Paul the hammer and the saw to make a chair for himself if Paul also makes Peter a Chair. Paul uses his own labour to create 2 chairs and only keeps one; however the chairs weren't just made from Paul's labour, he used Peter's labour imbued in the hammer. Where's the surplus value.

The only speciality of labour power among other commodities is that when it is consumed in the production process it, unlike other commodities, produces more value than is its own value.

So if an object contain's 1 hour's worth of social labour then it doesn't hold the same value as 1 hour of social labour? If this is true then commodities aren't soley valued according to the amount of social labour imbued in them.

Otherwise profit couldn't exist.

Couldn't profit be the result of the amount of social labour imbued in an object changing. Marx accepts that the amount of social labour in a commodity can change, otherwise prices wouldn't fluctuate. Is it not possible that profits sometimes occur when the amount of social labour in an object increases without extra labour going into it? Secondly doesn't the Capitalist use labour figuring out how a worker can convert his labour into the most social labour possible? Is that not work that should be rewarded?

[foilist13]

You could argue that the capitalist is putting more labor/social labor into the commodity when he does the work of market research, hiring/firing, and all the other things he must do in order to keep his business alive. That is hours of work invested in the product without actually making it.

[jaakko]

If it was possible to make revenue from selling the donuts, then new value was created by the vendor.

Not necessarily. Selling doesn't create new value according to the LTV. It's also completely possible to overprice products i.e. fool people, but that doesn't create new value either - it merely transfers already created value from one place to another.

If the buyer of the donuts does not pay the vendor the full value of the labor he performed selling the donuts to keep some of the money(surplus value), the buyer is exploiting the vendor.

I think that's a bit questionable conclusion. It happens all the time that some amount of a certain commodity is sold in a price over its value and the rest sold under the value, and all this to maximise profits.

However the value would not have existed without the ingenuity, and it is possible to become a billionaire with only creativity and non-physical labor.

This is irrelevant. The LTV only states that human labour is what creates new value in the production process, not that human labour is all that is required for the production process. It's also completely posssible to make profit i.e. accumulate value without creating any new value.

This is where the value is created through creativity rather than labor.

You're confusing accumulation and creation.

Where's the surplus value.

Nowhere. You're describing a pre-capitalist production process. Artisan labour doesn't create surplus-value, although it may be profitable.

So if an object contain's 1 hour's worth of social labour then it doesn't hold the same value as 1 hour of social labour?

I didn't say that. Among other commodities needed in production, the capitalist buys labour power from the commodity markets. Then the worker consumes that labour power through his own labour. This consumption of labour power adds more value to the product than what is the value of the consumed labour power. Human labour is always the source of new value, whether in a capitalist production process or in artisan production.

Marx accepts that the amount of social labour in a commodity can change, otherwise prices wouldn't fluctuate.

What do you mean by the "amount of social labour in a commodity"? I get the feeling you might have to correct your conception of 'socially necessary labour'.

You could argue that the capitalist is putting more labor/social labor into the commodity when he does the work of market research, hiring/firing, and all the other things he must do in order to keep his business alive. That is hours of work invested in the product without actually making it.

Well this is all necessary but not what creates new value. You only need to do some maths to see this isn't how capitalism works. It's quite clear that if the richest capitalists in the world own more money than hundreds of millions of workers, these three individuals are not hundreds of millions times smarter than ordinary workers, nor are these three individuals working hundreds of millions times harder than the ordinary workers.

"These three individuals are 600,000,000 times richer because they exploit hundreds of thousands of workers."

http://www.geocities.com/cmkp_pk/Thought.htm

[FallenRaptor]

Not necessarily. Selling doesn't create new value according to the LTV.

So only the actual production creates value? I would've thought that things like transport and selling would also create value since they require human labor and they are necessary for a commodity to be exchanged. I guess I'll look into it.

[foilist13]

You're confusing accumulation and creation.

No I'm not. I'm saying that by moving the product to where it has higher value you are adding value to it. A donut here and a donut there don't go for the same price.

These three individuals are 600,000,000 times richer because they exploit hundreds of thousands of workers.

No one exploits workers. Workers freely offer their labor in exchange for money. They are under no obligation to work for the capitalists. Any group of workers could freely set up their own factory and produce goods for themselves. They don't, because without the capitalist it isn't worth it. It isn't worth it because they cannot do all the menial labor as well as the work done by the capitalist to get their product on the market and sell it efficiently.

[tornadouk]

Not necessarily. Selling doesn't create new value according to the LTV.

Of course selling does. The retailer plays a part in the distribution of goods. That is labour. If Marx's LTV didn't acknowledge this then he couldn't explain why a diamond is so valuable.

Nowhere. You're describing a pre-capitalist production process. Artisan labour doesn't create surplus-value, although it may be profitable.

If the division of labour were to intensify, why would that cause the phenomena of surplus value?

Well this is all necessary but not what creates new value. You only need to do some maths to see this isn't how capitalism works. It's quite clear that if the richest capitalists in the world own more money than hundreds of millions of workers, these three individuals are not hundreds of millions times smarter than ordinary workers, nor are these three individuals working hundreds of millions times harder than the ordinary workers.

Prove to me in this case that the Capitalist is rich because he extracts surplus value from the workers. Just to be clear I made this thread to question how a labour theory of value leads to the belief in the phenomena of Surplus value.

[jaakko]

I would've thought that things like transport and selling would also create value since they require human labor and they are necessary for a commodity to be exchanged. I guess I'll look into it.

Not all necessary labour creates value or new value. Transport does, however, according to Marx.

No one exploits workers. Workers freely offer their labor in exchange for money. They are under no obligation to work for the capitalists.

Thank you. We have heard this before, I guess.

If Marx's LTV didn't acknowledge this then he couldn't explain why a diamond is so valuable.

You could have chosen a better example than diamonds. Mining them is extremely laborous.

If the division of labour were to intensify, why would that cause the phenomena of surplus value?

Sorry, I don't understand your question.

Prove to me in this case that the Capitalist is rich because he extracts surplus value from the workers. Just to be clear I made this thread to question how a labour theory of value leads to the belief in the phenomena of Surplus value.

Well that's a good question, but also wide enough to require the explanation of the Marxist conception of the LTV as a whole instead of some specific section of that. I'm not qualified enough to do that in a few forum comments, sorry.

[Wellsy]

https://kapitalism101.wordpress.com/2013/12/11/surplus-value-draft/

I believe the gist as summarized above is a point that value cannot be created in exchange.
When examining the c - m - c circuit, someone might make something to sell it in order to acquire another use value. In such a process, equal values are exchanged and no new value is made.

In the capitalist circuit of m - c - m’, the capitalist invests money in production of commodities and ends up with a greater amount of money than they initially had. The question is how do they acquire more than they started with.

The idea is that in exchange, one cannot create more value although individuals might benefit unequal exchange such as with merchant capital. Individuals profit, but the total isn’t increased, value merely changes places but there is no expansion of value.

So one looks to commodity production and not exchange for the origins of a surplus in the capital circuit. In examining production Marx considers that workers are paid for their labour power but produce with their labour a surplus product and value over and above their necessary labor for the equivalent in wages to purchase use values to survive. Capitalism has been the greatest means in pushing production above subsistence even with a ruling class in its pursuit of profit rather than simply production for use values.

Labour is considered a special commodity as one can’t take it from workers in the same way as other commodities. I also believe that a surplus is made more clearly in past societies with the peasant or slave working to produce a surplus for a lord or master. The relationship becomes obscured by a focus on equality of exchange but Marx’s maintains an equality of exchange of wages for labour power but recognizing that labour can produce more value than labour power unlike other commodities.