AskProfWolff: What is the Labour Theory of Value?

RichardDWolff
17 Nov 201704:29
EducationalLearning
32 Likes 10 Comments

TLDRIn this discussion, Prof. Wolff addresses a question about the labor theory of value, commonly linked with Karl Marx but also supported by Adam Smith and David Ricardo. Wolff clarifies that this theory is not about pricing but understanding value in terms of labor. He explains how societies allocate labor to produce essential goods and highlights that labor always generates a surplus, which is appropriated differently across economic systems: by masters in slavery, lords in feudalism, and employers in capitalism. The labor theory of value, Wolff argues, offers crucial insights into societal functioning and the need for social change, unlike conventional economics focused on price dynamics.

Takeaways
  • đź“š The labor theory of value is associated with Karl Marx but was also supported by Adam Smith and David Ricardo.
  • 🔍 The labor theory of value should not be confused with a theory of prices.
  • đź’ˇ Prices of goods are determined by negotiations between buyers and sellers, influenced by supply and demand.
  • ⚙️ Marx's labor theory of value focuses on the societal organization of labor and production of essential goods and services.
  • 🏛️ Every society must allocate labor to produce necessary goods such as food, clothing, and shelter.
  • 🔄 The way labor is organized varies across different societies and systems, such as through chiefs, councils, or markets.
  • 🛠️ Marx analyzed labor to understand how societies function and distribute resources.
  • đź’Ľ Laborers produce a surplus of goods and services beyond what they receive.
  • đź”— The distribution of surplus differs in various economic systems: in slavery, the master gets it; in feudalism, the lord; and in capitalism, the employer.
  • 🌍 The labor theory of value helps analyze societal structure and the need for social change, unlike conventional economics, which focuses more on price fluctuations.
Q & A

  • What is the primary topic addressed in the transcript?

    -The primary topic addressed is the labor theory of value, particularly in the context of Karl Marx's economics.

  • Who are the historical figures mentioned in relation to the labor theory of value?

    -Adam Smith and David Ricardo are mentioned as proponents of the labor theory of value, alongside Karl Marx.

  • What is a common misconception about the labor theory of value?

    -A common misconception is that the labor theory of value is a theory of prices, which it is not.

  • According to the transcript, what factors influence the prices of goods?

    -The prices of goods are influenced by the negotiation between buyers and sellers, their demand, and the urgency of their needs.

  • What does the labor theory of value aim to understand according to Marx?

    -The labor theory of value aims to understand how labor is organized in a society and the distribution of the surplus produced by labor.

  • How does Marx's labor theory of value view the production of surplus goods and services?

    -Marx's labor theory of value views that laborers produce more goods and services than they receive in return, creating a surplus.

  • Who benefits from the surplus in different economic systems according to the transcript?

    -In slavery, the master benefits; in feudalism, the lord benefits; and in capitalism, the employer benefits from the surplus.

  • What is the key issue that the labor theory of value highlights in society?

    -The key issue is the arrangement of who produces the surplus and who gets it, which is seen as a key to societal problems and the need for social change.

  • How does conventional economics differ from Marx's perspective according to the transcript?

    -Conventional economics focuses on the prices of things and why they fluctuate, whereas Marx's perspective focuses on the organization of labor and surplus distribution.

  • Why does the speaker find the labor theory of value more helpful than the theory of price?

    -The speaker finds the labor theory of value more helpful because it provides insights into what makes a society work well or not, and when social change is needed.

Outlines
00:00
đź“š Understanding the Labor Theory of Value

The labor theory of value is often associated with Karl Marx's economics, but it was also supported by Adam Smith and David Ricardo. The theory is misunderstood and dismissed because it is incorrectly seen as a theory of prices, which are actually determined by the negotiation between buyers and sellers. Marx's labor theory of value focuses on how labor is organized in society to produce necessary goods and services, and it explores the distribution of the surplus produced by laborers. In different economic systems, the surplus is taken by different groups: masters in slavery, lords in feudalism, and employers in capitalism. This theory provides insight into societal issues and the need for social change, unlike conventional economics, which focuses mainly on prices.

Mindmap
Keywords
đź’ˇLabor Theory of Value
The Labor Theory of Value is a concept in economics that suggests the value of a good or service is determined by the amount of labor required to produce it. In the video, it is clarified that this theory is not about the pricing of goods but rather a deeper analysis of the organization of labor in society. The script emphasizes that this theory was not only associated with Karl Marx but also with Adam Smith and David Ricardo, highlighting its significance in understanding societal structures and the distribution of surplus.
đź’ˇKarl Marx
Karl Marx is a renowned philosopher and economist known for his critique of capitalism and his theories on historical materialism. In the context of the video, Marx's association with the Labor Theory of Value is discussed, correcting the misconception that it is solely his theory and emphasizing his interest in how labor organizes society and produces surplus.
đź’ˇAdam Smith and David Ricardo
Adam Smith and David Ricardo are considered the fathers of modern economics. The script mentions them as proponents of the Labor Theory of Value, indicating that the theory has roots in classical economics and is not exclusive to Marx's socialist perspective. Their inclusion in the discussion serves to broaden the understanding of the theory's historical and intellectual significance.
đź’ˇSurplus
In the script, 'surplus' refers to the excess of goods and services produced by laborers beyond what they receive in return. The concept is central to the Labor Theory of Value as it addresses the distribution of this surplus in different economic systems, such as slavery, feudalism, and capitalism, and questions who benefits from it.
đź’ˇEconomic Systems
Economic systems, such as slavery, feudalism, and capitalism, are the structures within which production and distribution of goods and services take place. The video discusses how these systems determine who gets the surplus produced by labor, which is a key aspect of the Labor Theory of Value.
đź’ˇPrice
Price, in the context of the video, is the monetary value of a good or service determined by market forces, such as supply and demand. It is distinguished from the Labor Theory of Value, which is concerned with the underlying value created by labor, not the market price.
đź’ˇMarket Forces
Market forces are the economic factors that influence the price of goods and services. The script notes that these forces, including buyer and seller behavior, affect prices but are separate from the intrinsic value of a commodity as posited by the Labor Theory of Value.
đź’ˇSociety
Society, as discussed in the video, is the broader context in which economic activities and labor organization occur. The Labor Theory of Value is used to analyze how labor contributes to the functioning of society and the distribution of its surplus.
đź’ˇSocial Change
Social change refers to transformations in the social, economic, or political structures of a society. The video suggests that understanding the Labor Theory of Value can provide insights into when and how social change might be necessary, particularly in relation to the fair distribution of labor's surplus.
đź’ˇConventional Economics
Conventional economics is the mainstream study of economic activities, focusing on topics such as price determination and market behavior. The video contrasts this with the Labor Theory of Value, which is more concerned with the organization of labor and the production of surplus in society.
đź’ˇLabor Organization
Labor organization refers to the way in which labor is allocated and managed within a society to produce goods and services. The script highlights Marx's interest in this concept, using the Labor Theory of Value as a tool to understand the societal implications of different labor arrangements.
Highlights

The labor theory of value is not a theory of the prices of things.

Prices depend on what's going on among people wanting to buy and sell.

Marx didn't suggest that the price of something is necessarily accounted for by the amount of labor that went into it.

It's important to understand what value means in the labor theory of value.

Every society must produce goods and services necessary for survival, like food, clothing, and shelter.

In every society, there must be a system to allocate labor to produce essential goods.

Marx was interested in how labor is organized in a society.

The labor theory of value looks at commodities by focusing on the labor in them to understand society.

Labor produces more than what is given to the laborers, resulting in a surplus.

The interesting question is who gets the surplus produced by labor.

In slavery, the master gets the surplus; in feudalism, the lord gets it; in capitalism, the employer gets it.

The labor theory of value is useful to understand who produces the surplus and who gets it.

This arrangement reveals what is wrong with society and how it needs to be fixed.

Conventional economics focuses on prices and not much on labor or surpluses.

The labor theory of value helps understand what makes a society work well and when social change is needed.

Transcripts

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Related Tags
Labor TheoryValueMarxEconomicsSurplusCapitalismFeudalismSlaverySocial ChangeSociety