Talk:Labor theory of value/Archive 1

message: The treatment of B-B seems third hand. I'll work on getting it right when I have the time.
Ah, there! much better, IMHO. --Christofurio 20:36, Aug 23, 2004 (UTC)
Jdevine, this isn't "minor editing"!
"Marx might respond that this did not contradict his understanding of prices, in which sectors of the economy which have higher "capital intensity" (greater roundaboutness) have higher prices, in order to give capitalists there the same profit rate as in other sectors (see below). The difference, it seems, between Marx and Böhm-Bawerk concerns perspective: for Böhm-Bawerk, roundaboutness justifies all entrepreneurial profits, whereas for Marx, it justifies only those profits of the more capital-intensive operations, which represent redistributions from less capital-intensive ones...."
It's absurd.  B-Bawerk spoke of entrepreneurial profit only to distinguish it from what he called "originary interest."  A trust fund baby can get originary interest without ever doing anything entrepreneurial. Both are "justified" in the sense that they help send information through the price system and redirect incentives (such as the incentive to minimize financial risks by hedging investments) but they are different.  And how is this a difference of "perspective"? What does that mean?  Are there some differences that are perspectival and others that aren't?  Furthermore, it isn't obvious that roundaboutness correlates with capital intensity, or that relative capital intensity deserves any moral judgment one way or the other. --Christofurio 03:30, Aug 24, 2004 (UTC)
To the extent that "capital intensity" can be measured at all (and strictly speaking, it can't, as noted in the entry on the capital controversy), it's highly related to roundaboutness. If an "entrepreneur" engages in a roundabout process, that involves tying up a lot of capital in a fixed form for a long time. Relatively high fixed capital = capital intensive. I also changed the discussion of the differing perspective. (NB: I try not to characterize B-B's point of view, since I am not an Austrian. Sometimes I have to, but I hope that people correct my characterizations.) Jdevine 03:38, 24 Aug 2004 (UTC)
thread_title: Bohm-Bawerk

message: I'm finding this article heavygoing, with too few landmarks or recognizable cyc features for the reader to get his bearings. Instead, we meander through several of the incarnations of the theory, critiques of some or all versions, and various responses to those critiques. A complete restructure might make it more accessible and easy to comprehend. Can I canvass suggestions for a restructure? Adhib 19:07, 15 Sep 2004 (UTC)
replies: text: I'd like it to start with a simple, logical exposition of what Labor theory means in general, with an emphasis on the prime difference between it and 'mainstream' economic theory - that there is an objective value embodied in goods, as opposed to a 'constructed' value, existing subjectively between buyer and seller. Then focus the account of the several distinct labor theories (and critiques relevant to the same) around their specific incarnations; ie, Smithian, Ricardian, Marxian, perhaps Sraffian. This historic approach would give the reader a narrative, to follow refinements to the theory. Some issues (exploitation, transformation problem) would be better moved to their relevant entries elsewhere. Thoughts? Adhib 10:28, 20 Sep 2004 (UTC)
replies: text: I agree, that would be better. As it is now, it is dense, and the history and explaining is interlinked. Also, the language seems to be needlessly complicated. The labor theory of value (LTV) is a theory in economics and political economy concerning a market-oriented society: the theory equates the "value" of an exchangeable good or service (i.e., a commodity) with the amount of labor required to produce it. could easily be changed to The labor theory of value (LTV) is a theory in economics and political economy: the theory equates the "value" of a product with the amount of labor required to produce it.' without actually dropping any information. Regebro 06:48, 24 Sep 2004 (UTC)

text: A link to Economic subjectivism would take care of that explanation, I guess... Also, I think some info deserves a page of their own, like the explanation of Marx theory of exploitation. 
It's funny how this article looks like it comes from a paper encyclopedia, where you want all information to be close together, but in fact it has evolved into that collaboratively. :) Regebro 06:57, 24 Sep 2004 (UTC)
thread_title:  Restructure? 

message: Locke's theory is a moral justification of private property.  It has really nothing to do with the labour theory of value which is an economic explanation of price levels and therefore doesn't belong here.--Jack Upland 02:56, 30 November 2005 (UTC)
replies: text: That's right. That's the labor theory of property, rather than the labor theory of value. I'll remove it. RJII 17:27, 9 January 2006 (UTC)
thread_title:  Locke 

message: This passage is overly long and theoretical. The issue could be summed up (without the algebra) as: given the varying proportions of "living labour" in different types of production and the theory that surplus value (i.e. profit) is only extracted from "living labour", how can the tendency of profit rates to normalise be explained? Ironically, Marx addressess this in Capital by the competition between firms (as does the article, point 6), but the article buries this point!--Jack Upland 02:07, 10 January 2006 (UTC)
thread_title:  Transformation Problem 

message: In Marx's theory explained there is a constant reference to L>v which supposedly equals exploitation. The conception that workers should receive the entire product of their labour as wages was denounced by Marx in the Critique of the Gotha Program (I.3.) as under socialism funds still need to be set aside for investment, social services etc. This "explanation" goes beyond this misconception by arguing that under capitalism L>v is not a given i.e. that profit-making is not a given. This is plain nonsense.--Jack Upland 07:08, 12 January 2006 (UTC)
thread_title:  L>v 

message: I propose that Exploitation and Transformation Problem have their own pages and only linked with summary here. The Alternative Interpretation should be pruned down (apart from reference to Roemer it seems original research anyway) and placed on Exploitation page (after all, it denies LTV). Does anyone have a problem with that?--Jack Upland 07:15, 12 January 2006 (UTC)
thread_title:  Restructure 

message: Did the Physiocrats really support the LTV? The citation says they did, but my understanding is that they said that agriculture was the source of all wealth. I wonder also about the other works cited. While I have seen Franklin quoted, the other theories might not actually amount to LTV.--Jack Upland 04:54, 13 January 2006 (UTC)
replies: text: There being no support, I declare this assertion deleted.--Jack Upland 04:55, 6 August 2006 (UTC)
replies: text:  I agree with your deletion. I think whomever added that was probably mistaking the physiocrats for theorists  theorists of labor value due to their importance as theorists of surplus value. --Cplot 07:48, 6 August 2006 (UTC)
thread_title:  Physiocrats 

message: I've replaced the short critique of Bohm-Bawerk's argument which was deleted by an unnamed user. I had trimmed down the previous section, which was getting like a debating forum, but it's only fair that the obvious responses to the argument are briefly mentioned.--Jack Upland 07:56, 27 January 2006 (UTC)
thread_title:  Böhm-Bawerk Trimmed 

message: I'm glad I got that issue of proper spelling off my chest. Here goes .... 
: Thanks for your thoughts, Jack. A few points, if I may. 
:*Air -- to take your example -- isn't free. To the extent that it is maintained as a 'commons' it quickly becomes problematic. Any efforts to keep it breath-able within an industrialized world entail costs, and unless you are going to take the position that the human race ought to de-industrialize, you'll have to maintain that those costs ought to be paid by somebody through some mechanism or other. My own preferred mechanism would be a continued development of tradeable emission rights. Which gets us back to the issue of value where we started.
:*If you already have some potatoes, but you don't have any meat, and you want to make a meal consisting of both, then the marginal utility of meat, the stuff you don't have yet, is greater than the marginal utility of your last few potatoes. The trade you propose will be based upon the difference between the two marginal utilities. You're right that this is closely related to the issue of comparative advantage. It also is perfectly consistent with the general principle that exchanges arise from differing values. 
:*This is an article about the LTV in general, and much recent discussion has concerned the alternative offered by the STV. There's no reason any one should limit discussion to the Marxist mechanism for exploitation specifically. At any rate, consumerist examples happen to be convenient illustrations, whether they involve ice cream or whatever (your own example involves a meal with two components -- another consumerist illustration -- so you know this full well). Portfolio theory provides another field of illustration, though. I may be willing to buy some tradable emission rights (for re-sale, since I don't own any factories), and buy them at a higher price than you would, consistent with rationality on both of our parts, because it fits within my over-all portfolio better than it fits within yours. --Christofurio 15:00, 20 February 2006 (UTC)
replies: text: Labour is not the source of all wealth. Nature is just as much the source of use values (and it is surely of such that material wealth consists!) as labour, which is only the manifestation of a force of nature, human labour power...And in so far as man from the beginning behaves towards nature, the primary source of all instruments and subjects of labour, as an owner, treats her as belonging to him, his labour becomes the source of use values, therefore also of wealth. The bourgeoisie have very good grounds for falsely ascribing supernatural creative power to labour: since precisely from the fact that labour depends on nature it follows that the man who possesses no other property than his labour power must, in all conditions of society and culture, be the slave of other men who have made themselves the owners of the material conditions of labour.
*Exchange value does mean average market price. And it is this we must discuss when we discuss economics - not what we "ought" to pay. (And after all old Mother Nature has no bank account.) The fact that air is free is not due to government interference with markets. Constructions like the Kyoto Protocol are perverse government constructions of artificial "markets" irrationally based on the premise that governments are the "problem not the solution".--Jack Upland 07:06, 25 February 2006 (UTC)
thread_title:  There is Only One 'S' in "Intrinsic"! 

message: (To replace the existing section which is way too long for this article:
with proposed section heading) It still needs citations, but its a start.
==== The relation between values and prices (and the transformation problem)====
:One issue facing the LTV is the relationship between value quantities on one hand and prices on the other. If a commodity's value is not the same as its price; and therefore the magntudes of each likely differ, then what is the relation between the two (if any). Various LTV schhols of thought provide different answers to this question. For example, some argue that values act as a center of gravity for prices. As counter-intuitive as this may seem to those accustomed to neoclassical price theory, some empirical evicdnce suggests values are a better predicter of empirically recorded prices than prediction by any other means.
:However, other schhols within LTV expect, at least conceptually, that prices are more strongly influenced by an equalization in the rate of profit. The equalization in the rate of profit combined with the application of different proportions of means of production and labor-power in various industries implies thatt the price of any given commodity will often diverge significantly from its value. The demonstration of the relation between commodities' unit values and their respective prices is knows as the transformation problem or the transformation of values into prices of production (in Marx's terminology). The transformation problem has probably generated the greatest bulk of debate about the LTV, even originating as early as Smith's work. The problem with transformation is to find an algorith where the magnitude of value added by labor, in proportion to its duration and intensity, is sufficiently accounted for after this value is distributed through prices that reflect an equal rate of return on capital advanced. If there is an additional magnitude of value or a loss of value after transformation comapred with before then the relation between values (proportional to labor) and prices (proportional to total capital advanced) is incomplete. Various solutions and impossiblity theorems have been offered for the transformaton, but the debate has not reached any clear resolution.
That's a start anyway. I think we also need some elaboration before this on the role of means of production or constant capital in forming the value magnitude of a commodity. --Cplot 06:13, 5 July 2006 (UTC)
thread_title:  Proposed new TP summary 

message: :One issue facing the LTV is the relationship between value quantities on one hand and prices on the other. If a commodity's value is not the same as its price; and therefore the magntudes of each likely differ, then what is the relation between the two (if any). Various LTV schhols of thought provide different answers to this question. For example, some argue that values act as a center of gravity for prices. As counter-intuitive as this may seem to those accustomed to neoclassical price theory, some empirical evicdnce suggests values are a better predicter of empirically recorded prices than prediction by any other means.
:However, other schhols within LTV expect, at least conceptually, that prices are more strongly influenced by an equalization in the rate of profit. The equalization in the rate of profit combined with the application of different proportions of means of production and labor-power in various industries implies thatt the price of any given commodity will often diverge significantly from its value. The demonstration of the relation between commodities' unit values and their respective prices is knows as the transformation problem or the transformation of values into prices of production (in Marx's terminology). The transformation problem has probably generated the greatest bulk of debate about the LTV, even originating as early as Smith's work. The problem with transformation is to find an algorith where the magnitude of value added by labor, in proportion to its duration and intensity, is sufficiently accounted for after this value is distributed through prices that reflect an equal rate of return on capital advanced. If there is an additional magnitude of value or a loss of value after transformation comapred with before then the relation between values (proportional to labor) and prices (proportional to total capital advanced) is incomplete. Various solutions and impossiblity theorems have been offered for the transformaton, but the debate has not reached any clear resolution.
That's a start anyway. I think we also need some elaboration before this on the role of means of production or constant capital in forming the value magnitude of a commodity. --Cplot 06:13, 5 July 2006 (UTC)
thread_title:  The relation between values and prices (and the transformation problem)

message: I question the value of having an external link such as the "Disproof of the LTV" (relabelled by me as "Critique...) because it undoes so much of the work of the article by retailing a list of fallacies, including:
*That the LTV denies supply and demand,
*That the LTV denies the "value" of nature,
*That the LTV implies that a lazy/unproductive worker creates as much value as a productive one,
etc
All these objections are succinctly dealt with in Marx's Value, Price & Profit and indeed by this article. So why refer readers to such inferior material?--Jack Upland 00:49, 14 May 2006 (UTC)
replies: text: Because Marx "deals" with them in a totally nonsensical way.  Salvor Hardin 05:41, 15 May 2006 (UTC)
replies: text: How much of Marx have you read? But regardless of how nonsensical Marx is, it makes no sense to present a critique of his theory without referring to what he actually says - and even worse to present objections without acknowledging Marx's previous responses to these. It is very easy to present your opponent as wrong and even nonsensical when you refuse to acknowledge anything he says!--Jack Upland 23:57, 20 May 2006 (UTC)
replies: text: PS I've written a blow-by-blow demolition of this supposed 'disproof' which is available to whoever's interested (!)--Jack Upland 10:17, 1 June 2006 (UTC)
thread_title:  External links 

message: I began making some stylistice changes to the article. I introduced the ref element <ref>. If anone's unfamiliar with these wiki elements they basically allow notes to be entered in the body of the text making maintenance of the article easier. A footnotes section is automatically generated from those ref elements. If you click on the edit link next to the Notes section you will only see "<references>" in the edit window. By clicking on the up arrow next to each note you can jump to the section of the article where the note would be edited.
I also tried to make sure there's a reference for each note (arranged alphabetically by author last name) and tried to complete some of the missing bibliographic information. Please help check these references and add any missing information. Per Manual of Style recommendations it would be helpful for anyone adding a not to add the source to the reference list and if removing the last note citing a reference move the reference to the "External links" section. Unfortunately Wiki doesn't automatically manage these tasks yet.
Finally I removed some of the sentences that represent back and forth argument within the text. The best way to present criticicms is enter them in the criticism section. You'll have the last word in the article. The crticicms can also be read more coherently than just as points scoring against one or antoher disjoint sentence in the article. Readers will have a much easier time understaning the main agruments and the criticims in this way. --Cplot 01:19, 5 July 2006 (UTC)
thread_title:  Manual of Style edits 

message: My sense is this only contributes to the back and forth and we should just let the criticisms stand on their own without further rebuttal. They may however point out weaknesses in tthe article that could use improvment (or simply the LTV itself in which case we're done with the article) 
:Critics of Böhm-Bawerk argue that workers in fact face more risks, including injury and job loss, and have less ability than an entrepreneur to diversify and minimize risk, having only their labor power as an asset.
::This sentence was contributed by me in order to summarise the criticism of the criticism. I totally understand your argument about the back and forth, but I think that that we do need some response to B-B.--Jack Upland 10:03, 28 July 2006 (UTC)
thread_title:  Critic of Böhm-Bawerk 

message: There may be a new corn theory criticism out there, but if there is I haven't seen it. I think as it stands now this simply violates the original work policy and needs much more support than what's been provided. The "corn theory of value" criticism dates from about 1830, is considerred within Marx's treatment of value theory and no one has yet offered any new criticims of Marx's work (that I'm aware of) except to simply restate the oritignal criticism as Bailey applied it to Ricardo's LTV. My disclaimer here is "as far as I'm aware". I think something could certainly be in print that I haven't come across. That's the great part of this collaboration we call wikipedia. (this is the only piece I deleted from the article).
:However, the same thing can said for labor; for example uncultivated land and clean air involve no labor but have value (usefullness). Marx would respond that these things are not "social" but belong to nature which he explicitly excluded. But this seems to make his argument a form of circular logic: Only those material things which involve labor are commodities. Thus, automatically, labor is common factor for all commodities.
::As previously stated, I think the corny theory should just be deleted on the grounds that it is stupid.--Jack Upland 10:05, 28 July 2006 (UTC)
replies: text:  I understand what you're saying. I actually think it belongs in the historical portion before Marx. I think Marx considered it a serious criticism of Ricardo's work that needed to be addressed. The silliness is that after Marx addressed it it just simply gets regurgitated as if nothing else has been said about it (since 1830). Of course to cover up this fact the proponents like to suggest they came up with it. And the amazing coicidence is that the example they always come up with is "corn" which is exactly the example used by Bailey in 1830 and cited by Marx in the first chapter of Capital. I actually know of two contemporary economists who stopped speaking to each other because they disagreed on who among the two of them first came up with the "corn theroy of value" criticism. --Cplot 00:36, 29 July 2006 (UTC)
thread_title:  A new corn theory criticism  

message: As proposed, I redrafted the section on the "transformation problem" to make it a more appropriate size for the article and to bring it current with the topic as its understood today. also don't understand how the section entitled "An alternative interpretation" fits in the topic of the article, so I pulled that too. I'd like to move the corn theory of value selection hgigher up in "the development of the theory" section since this arose as a criticism of Ricardo that Marx treats in depth. I'll leave that for later.--Cplot 23:31, 10 July 2006 (UTC)
thread_title:  Revision as proposed 

message: I took a nother look at Smith. He doesn't even refer to it as a paradox, and I'd say it's not presented as a paradox, but more in the spirit of the confusion THeIndividualist is expressing with regard to value. Smith writes 
“The word value, it is to be observed, has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called "value in use"; the other, "value in exchange." The things which have the greatest value in use have frequently little or no value in exchange; and, on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce anything; scarce anything can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it. ”</blockquote>
To suggest that Adam Smith's "paradox" endorses the marginalist view, is bizarre. If they (the marginalist) were to claim (and I'm nost saying they claim this, but I get the sense ThIndividualist is claiming theydo) that value in use determines value in exchyange, rather than the strawman LTV where supposedly labor determines value in exchange (again, that's not the LTV it's a strawman LTV)., then they would have to explain to Adam Smith why something that has "scarcely any value in use" — a diamond — commands so much value in exchange. You can quote Encylopedia Britanica, but I think Wikipedia aims (and should aim) a little higher than that shill fodder. The point of those books is to be as heavy as possible so that they can be sold more ezsily.
Also the criticism section now mis-states the marginalist point of view. Their view is that the consumer consumes until the last unit consumed (not the first units)  are considered just as useful as the money that the consumer has to part with to purchase that useful commodity.  --Cplot 05:13, 1 August 2006 (UTC)
replies: text: I'm glad someone else has read Adam Smith too. Also check out the Paradox of Value page!--Jack Upland 04:41, 6 August 2006 (UTC)
thread_title:  Water Diamond Paradox 

message: I rmoved the original research banner I think it was put on there prematurely. To add something like that you need to present a case here on the discussion page. I've responded diligently to your requests for more suppor. You have not provided one citation that supports your view of the LTV. The first heaeding of Ricardo's first chapter in his "Principles" was the closest thing at it only vaguely could be construed to support the arggument that value and exchagne-value are the same thing. Here's a quote from later in that same chapter that demonstrates Ricardo understood the difference:
Adam Smith, who so accurately defined the original source of exchangeable value, and who was bound in consistency to maintain, that all things became more or less valuable in proportion as more or less labour was bestowed on their production, has himself erected another standard measure of value, and speaks of things being more or less valuable, in proportion as they will exchange for more or less of this standard measure. Sometimes he speaks of corn, at other times of labour, as a standard measure; not the quantity of labour bestowed on the production of any object, but the quantity which it can command in the market: as if these were two equivalent expressions, and as if because a man's labour had become doubly efficient, and he could therefore produce twice the quantity of a commodity, he would necessarily receive twice the former quantity in exchange for it (Ricardo 1817).
::I don't know if you've heard: Smith is obsolete. :) -- Dullfig 18:00, 4 August 2006 (UTC)
replies: text: It is still original research because you're your own source. You're making footnotes but *you're* writing the footnotes and using them as a reference. You're pointing to sources but you're the one interpreting them and asserting that the sources are saying what you're saying, instead of providing direct quotes. Are you familiar with WP:OR? Economizer 19:20, 4 August 2006 (UTC)
thread_title:  Rmoved Original Research Banner 

message: Economizer, now you're saying that forget the entire history of the LTV. Rather just accept what you say it is. Now you've twisted around the original research rule to say if an article cites the significant theoriests for the LTV it is original research. If it just accepts what Economizer says is the standard definition (despite the fact you only provide sources that undermine your position) then that's not original research. You've got it all backwards again. --Cplot 22:43, 7 August 2006 (UTC)
thread_title:  Original Research != citing sources from the field of knowledge on a topic 

message: Economizer you gave me this idea. How about a section where we say:
: The LTV also refers to a theory that has no proponents and a theory no one has ever aehered to. Rather this LTV is simply a strawman argument for those dabbling in economics to have a foil to fight against. It is typified my misquoting particular giants in the field of political economy, drawing statements out of context, and then showing how ridiculous those statements now appear. Typically this LTV, which has never had a single propoment (only oponents), understand the prices of commodities to be proportional to, equal to or — in its most extreme strawman role — identical with the labor required to produce them. 
: References
:  (Note: since no one actually adheres to this view, we list here only references for the economists whom embarass themselves by promoting this nonsense.)
::Wrong. There are actually people who have a similar view. Here's a source right here: What Was the Labor Theory of Value? Donald F. Gordon, American Economic Review, Vol. 49, No. 2, Papers and Proceedings of the Seventy-first Annual Meeting of the American Economic Association (May, 1959) , pp. 462-472  The author says, "This paper will establish, or at least affirm, two points; first - based mainly on accepted interpretations - that no major economist of the classical period held what would, by modern usage, be called a labor theory of value...By the modern meaning of the phrase "theory of value," the labor theory of value is presumably the proposition that commodities exchange at ratios that are reciprocals of the quantities of labor involved in their production." Note that this is yet another source that defines the labor theory of value as I have been defining it. You have provided no sources whatsoever. You're conducting original research. Economizer 02:27, 8 August 2006 (UTC)
replies: text: If a modern theorist calls his theory a "labor theory of value" that's fine. But would be an idiosyncratic labor theory of value that does not accord to the labory theory of value as is commonly defined. Have you forgotten that the first sentence says "the labor theory of value is a THEORY FROM CLASSICAL ECONOMICS"? Economizer 03:58, 8 August 2006 (UTC)
thread_title:  idea for a new section or even a new article 

message: Cplot, you have violated 3RR. I ask that you revert yourself. Otherwiser, I will report you.Ultramarine 03:01, 22 August 2006 (UTC)
thread_title:  Violation of [[Wikipedia:Three-revert rule]]