So how does the capitalist screw over the consumer in this pic?

this picture only happens when the supply for a commodity is lower than the demand, which isn't what the TLV describes.

VALUE AND PRICE ARE TWO DIFFERENT THINGS YOU FUCKING RETARD.

No shit.
If perceived value something more than what the price to buy a good. Do both parties benefit?

I never said that they where the same thing anyway.

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Damn….. Slow down with all of those logical deductions

only applies to market price, not value.
this is garbage in so many ways

When Marx is talking about value, he's talking about a very specific concept which he carefully defines in Chapter fucking 1 of Capital, and how all commodities have one thing in common - that they are the product of labor.

If you're not talking about Marx's definition of value, then you're not debunking anything. You would have to prove that the LTV is unsound, not just assert your own definition of "value" and claim that you've won the argument.

Subjective value theory basically concedes that there is no inherent "value" in a commodity. You can't really draw any scientific conclusions from that definition, you can only guess at the aggregate subjective demand of people and predict how the market works. In the case of the Austrian School, their predictions about the market have performed badly throughout history, and their policies in practice have led to disastrous consequences.

If you still want to insist that subjective theory of value is valid, you'd have to actually posit what that means, which you probably can't because you're a pure ideologue. Then you'd have to defend the scientific validity of a "util" or whatever asinine concept the marginalists made. Or you just give up on defining value and then you're really making no worthwhile point.

Labor theory describes average trends (not specific phenomena affecting specific transactions between individuals) within the capitalist productive hierarchy (not capitalist markets).

This means that labor theory is not an inexorable law which can be strictly applied to every anecdotal situation you can think of. It describes trends acting horizontally across owner-worker class relationships.

And besides, surely in a properly functioning capitalist market the burger would not be sold to the highest bidder but would instead be set at the lowest price possible in order to remain competitive with other firms, wouldn't it?

Its a ridiculous cycle and the only one benefiting is the capitalist while the workers get fucked

A capitalist needs to make a profit, no? If he was only trading equivalents, he would receive no profit and his business would fail.

Therefore, the item he gives to the "consumer" must be of less value than what she gives to him (5 bucks). In a properly functioning market, however, wouldn't the price of the burger and its component parts fall to their lowest possible average in response to competition? By that logic, the burger would gravitate to a price which is near or equivalent to its real value.

But we know that isn't true because many, many firms report considerable and dependable profit year after year, meaning that at some point, if not in exchange then in production, value was created (or "found"). This means that value must be derived from something which is neither a component part nor a piece of machinery or tool, it has to be something which may be exploited for its value and is not affected by market forces.

BUT HOW ELSE AM I SUPPOSED TO WIN IF YOU WON'T LET ME ARGUE FOR YOU ON MY OWN TERMS

REEEEEEEE

Why would I care about the consumer being screwed over?

Strictly speaking, the exchange between worker and capitalist is "fair" when seen as an isolated case - the worker gets money worth his value (i.e. means to survive and the cost of his labor's reproduction) and the capitalist pays that value. That the capitalist gets more value than he pays into the worker is not inherently "unfair", it's just the source of expanding value. It's the consequences of that law of value that screw over the worker, the consumer, and ultimately the whole system, in the long term.

Holy shit, this is the best explanation of LTV I've seen. I know its not the whole thing, but fuck man, that post makes so much fucking sense.

He (or you) could claim his subjective theory of value makes better predictions based on the evidence. The problem is that with pure subjective value theory, you can't make any scientific predictions because you have no real concept of "value" except as a foggy, fictitious thing that appears as an ad hoc answer to describe why things cost what they do. And then you can only make some micro-economic or macro-economic assumptions based on some nice-looking formulae that "sound good", or whatever, like say "gee, we have a great depression and the system has gone haywire, let's do this thing and maybe it will work". Then, economics becomes little more than reading tea leaves.

Alternatively, someone can find an alternative theory of value that has scientific merit (that is, it is something which can be tested empirically, at least hypothetically), and draw their conclusions from that. I don't know much outside of reading Marx so maybe I should STFU, but the marginalist theory just screamed bullshit from the moment I heard of it.

The first critics of Marx did try to make criticisms of the LTV, and there are arguments to make against the idea (or at least Marx's formulation of the law of value). But even disproving LTV doesn't validate whatever ideology the Austrian School is putting out.

So basically hundreds of years of economics has been based on an abstraction? How far deep do the contradictions run if such a simple thing as the idea of subjective value is false?

That's a question of neoclassical economics. You don't have enough information in that picture to answer it. The way neoclassical econ goes about it is that they relate that to marginal profit, marginal costs, marginal whatever. According to the neoclassical econ argument, the business exploits the customer if they charge more than necessary to cover their marginal costs. (Marginal costs are assumed to be rising, so the business would still make a profit in total if it did that.)

Consumer exploitation isn't really a concept in Marxist economics, exploitation is taken to happen at the point of production. A variant of the burger argument gets reposted here a lot, with two potential buyers talking about it (who would be willing to buy at different price). You might be interested in that, so the rest of this post is a repost of a response to that:
Suppose the burger is priced at less or equal to $3, then both will get one. The person who would pay a higher price of up to $5, if he had to, doesn't actually pay that higher price.

Going a bit abstract here, putting economies of scale and patent monopolies aside: If we assume that there is efficient competition, that is, that it is easy for entrepreneurs to quickly enter or leave this or that type of business, and they are only making that decision based on where profit rate is high, the cost of production is what basically determines the price of goods, demand fluctuation (some stuff going in and out of fashion) only playing a minor role. This is the argument of classic economics.

You might wonder: Can the argument for subjectivity being important be saved by changing the example to, say, a unique art piece? After the unique art piece is sold, you can doodle some curves for an after-the-fact "explanation". But without repeating phenomena, what's left of economics as a science? Classical economics deals with a production process that repeats, with mass production, and makes predictions about that using physical data. The subjective turn "explains" everything after the fact, it comes up with some stories about what might have happened in this or that person's head. Where are the predictions? Where is the science? This is not an advance over the old method, it's a dead end of nothing but pure faith.

There is a difference between "value is a subjective concept only relevant to humans" and "value can only be determined by what people want". In the former case, you can still define "value" in terms that are scientifically testable, for instance value in terms of labor-time or socially necessary labor-time. In the latter, you are conceding that there really is no such thing as value, and you can't use that definition of value as a starting point for any meaningful conclusions except "shit is the way it is because it is".

All of economics is really an abstraction, but mathematics is an abstraction as well, yet we don't claim that the rules of mathematics are entirely arbitrary, and every system of mathematics must be internally coherent. I claim that the idea of marginal utility does not allow for a coherent system of economics, only a system of best-guesses.

I put a gun to your head and ask you to blow me if you don't want to get shot. You decide to blow me and not get shot and I decide to get blown instead of shooting you. We both prefer the situation of you blowing me and not getting shot to the alternative of you getting shot and not blowing me. We have come to this agreement and we act on it, thereby improving our situation in comparison to the potential outcome of you not blowing me and getting shot. What's wrong with that?

Now you might be a little bit offended by that sort of deal, and say: "That's not an example of the free market, because we haven't come to a free agreement." But in that little word there are a ton of assumptions. People like to be "free" themselves, but they don't seem to agree on what that word actually means. Whatever our different conceptions of being free may be, we both can agree that you blowing me instead of getting your brains blown out is efficient in the sense that it isn't the worst possible situation imaginable. We can also both agree that capitalism has a way of avoiding the worst possible situation imaginable, but that's not saying much, and if you are an evangelist of capitalism, surely you want to make some more impressive positive claims about it.

So why wasn't my example of the art of the deal of you blowing me not a great example of the magic of the free market? This seems to be obvious to you, and you think that you can see a rule describing what is wrong with that in general', even if the stakes are much lower than getting killed. It's general and abstract: "Individual A is in a bad situation and individual B helps A out of it, however B caused'' the bad situation of A to begin with. All deals of that kind are unjust." So, A and B in that story are individuals. Hmm…

Suppose that I'm a member of a group that creates traps, holes with a cover. You fall into such a hole and can't get out by yourself. Luckily, I find you. I offer you help, but I want something in turn. Me: "Do you have any idea how rarely people check on this hole? Without me finding you, you would surely be dead soon. I think I want as much from you as you can possibly give." You: "Come on. How much work is it for you to just get me out of here?" Me: "IN THE REAL WORLD, VALUE IS SUBJECTIVE. You are free to choose. Think what your life is worth to you." You: "You are one of those hole-diggers, aren't you?" Me: "Hey, buddy, I didn't dig that hole. You talk basically like a racist. There is no such a thing as society. Only individuals." All justice is about the dealings between individuals. And because I, the individual, didn't put you, the individual, into that situation, you conclude that it's just if you suck my dick in order to life. The rational evangelist of the free market has spoken, and it sounds like mmphmshshsshmhpfhpfshnnnmmff. Hallelujah.

Capitalism is a system of blackmail. People blackmail other people, but you don't see much of that in the dealings between individuals. On the contrary, these seem to improve the situation for the individuals involved, since why else would they agree on doing that? But in the big picture these dealings keep the system running. Not only do capitalists threaten people with force, the force that they have to threaten people with is itself something that the people built and are rebuilding every day. To get back to the metaphor with the gun, it's like it's a rusty gun that is constantly in the process of falling apart and the people blackmailed with the gun are themselves those who regularly repair the gun and keep it in working condition. And if the person holding the gun gets sick of what he is doing, that won't destroy the gun, instead somebody else immediately becomes the person with the gun.

tl;dr: I love all hamburgers, but Five Guys is much better than White Castle. Value is subjective.

Your pic is shit, for one clear reason. There is only competition between the consumers, but we are made to believe there is only one producer, one burger. Curious, don't you think? The whole argument for classical free market theories is that competition between producers will drive down prices, yet that doesn't figure into your example at all!
Imagine two burger factories. Each have the same machinery, and equally productive labourers. Their input costs - wages, wear on machines, raw materials - go for 2$ per burger.
Now, say that at 2$ 1000 people can buy a burger. Each factory puts out burgers at the same price, so they each sell 500 burgers. Each factory is also very flexible, so could put out 1000 burgers if the demand were there.
One factory manager decides to up-market his burgers a bit, do a branded campaign or whatever, puts out a premium 2,5$ burger in stead - a bit extra input costs in marketing, not much else, production cost 2,10$. What will happen? Well, all the people that can/want to buy a premium burger and can pay 2,5$ will buy his burgers, however many that might be. But in this case, the entire 2$ burger market will be usurped by the other factory which can up its production to 1000.
And in fact, it might well be that the other factory starts to bring out a 2,49$ premium burger also, capturing the entire premium burger market, because the homo economicus will not want to pay 1c extra for the same premium burger. Competition will quickly push the price of the premium burgers to the price of production at 2,10$.
One other possibility is that one factory introduces technology to reduce input cost to 1,90$, and take 10c on their 500 burger market share. But, again, they can lower their sales price to 1,99$, take a 9c extra, and capture the entire market to boot, and make even more.
And so on. Profit at the point of sale can only come from monopolies, or temporary advantages in production cost. Otherwise, competition will push prices down to price of production, no matter what people's preferences might be.

That doesn't say anything about the value of commodities on an open market of exchange. It just says that someone can put a gun to your face and generally coerce you to do just about anything if you want to live. Even then, if you accept that merchants and people in general are sociopathic monsters, it doesn't change anything about the value of their services or commodities. Your scenario would just be an example of unequal exchange brought about by extortion, and unequal exchange does not produce any new value in society. A capitalist with a monopoly does not produce inherently more valuable commodities or services, he is just able to exchange them for more money at the expense of the consumer. Marx explains such situations, so you're wrong again.

And who do you think that poster is and what his position is, my dear Captain Assburgers?

Sadly I could see OP really believing in such a world-view.

Why pay when you can steal?

So value is the labor time contained in commodities and price is how that value is distributed in transactions?

I don't think the argument usually starts from the end of the consumer. It's usually from the end of the worker who becomes a consumer later.

I don't have a trillion hours to reply to your post which I don't agree with. Especially when I can be doing 10,000 other things I enjoy more. Even if you don't agree with the Marxists conceptualization, doesn't mean that subjective value theory is useful. It can't predict anything, and all the theory based on it is unable to describe the real economy. You can't find any models which can explain the value of a commodity and how the value changes over time (this also holds true to Marxist theory). You know why this is? Because consumer demand is based on a lot more than whatever someone is willing to pay for it. It is more along the lines of not being able to pay for it. And that doesn't mean that the price suddenly drops either. Store sales are not based on demand. They are based expiration date, new stock arriving, and finally if no one buys it. Afterwards, prices don't necessarily drop either. Often the commodity is not produced anymore instead, or the amount which is produced is adjusted, to change supply. On the other hand, there are things that we need to have, and others we are effectively coerced to buy, so supply and demand or our subjective appraisal have no say in the price. Subjective value theory completely ignores real human conditions, the production process, and how the distance between buyers and sellers affect the price. It is therefore useless and, especially since it can't explain multi-commodity economy which also accounts for time (Which is how the real economy works). Read a book on your own theory before you attack Marxist ideas.

brainlet here, I do t get what this is saying. Person 1 and 2 worked for an hour, so produced to hours of value.
Then both paid the capitalist 10 mins.
In the second scenario on person pays 15 mins. Where did the extra time go? If your working harder for less doesn't that mean you wind up with less, in the second scenario one person has less time to spend on other commodities.

Person 1 and 2 aren't working they're just exchanging x minutes worth of labor time in terms of "stuff" (probably money in this case) to buy the burger

So in the 2nd scenario the one person gives up 5 extra minutes worth of money/labor time, meaning the capitalist gains those extra 5 minutes. But the total value of the stuff being exchanged didn't change.

That's my understanding of it, anyway.

wow, marx BTFO
capitalism is a mode of production, the way commodities are exchanged after production is literally irrelevant, the problem is that you cannot perceive a system that is not capitalist, to you socialism means "when the gubment does stuff"
also, the law of value is ==not== a theory on how workers should be paid

lrn2 use-value vs exchange value nigga.

anyway: who gave her $5 to buy the burger? it's not about "the capitalist" but capitalists, if one capitalist is fucking me because - systematically speaking, it's in his own interest - and the other is selling me alcohol to make the bad memories go away, because again this is in his interest, it's the system that's doing the fucking. What capitalist a given individual winds up being - the fucker or the publican - is irrelevant. Shoot the capitalist doing the fucking and leave all else equal, and someone else will lube up and take his place.

I made a better version.

This pleases me

SOMEONE
SCREENCAP THIS
not me

The equilibrium price is not based around individual feelings, but the necessary required labor time to produce the good. Kys with your shitty drawings and fantasy scenarios OP

I'm not really that educated, I'm just not a believer in the retardation of economics that dominates the public discourse. I'm a fucking high school drop-out and I get it, at least to a sufficient degree.

Wage Labour and Capital is the usual introduction and only 30 fucking pages long you lazy fucking amerifat

As others in this thread have explained, Marx isn't looking at the consumer but the production process and the worker-capitalist relation. What the consumer is willing to pay and what they want is just demand, and what's available is supply. Also as others have said, the price of a good on the market is going to be forced to near the cost of production by competition, so your picture doesn't explain anything but individual demand in a very particular situation. The girl who will pay $5 for a burger still winds up paying the cost of production regardless of her wants.

To understand labor exploitation, take two workers:
Worker A works for a capitalist and all of the supplies necessary to make burgers are given to him by the capitalist. He receives a wage for working so many hours and produces so many burgers, at the average rate of productivity and with the average tools available to a burger-maker.
Worker B owns her own means of production and also makes burgers. She obtains her own means of production, ingredients for burgers, etc. She works at the same average rate of productivity as Worker A, with the same tools available to her, and puts out the same number of burgers in a given work day.

Now worker A is paid a wage which is necessarily less than the total value of the burgers he produces, while worker B gets to keep all of her burgers and exchange/use them how she sees fit. Both have the same capital inputs, both put in the same quantity of labor-time and both work at the same rate, but worker B possesses more value at the end of the day. How do we explain the difference between worker A's property at the end of the day (his wage) and worker B's property at the end of the day (her burgers, which she presumably sells in full at the market rate)? The answer is surplus-value.

Now, only free workers who are economic agents can produce surplus-value, because they are participants that are, at least in theory, equal to the capitalist. There is no hard rule preventing a worker from building their own burger-making machine and entering the burger-selling business, if they can accumulate the capital to do so. Yet, the worker who works for a capitalist is clearly creating the same amount of value as the self-employed.

So you may think - what if everyone owned their own means of production and could exchange at the full value of their labor? That would be nice, wouldn't it? Except there is a problem; in this scenario, every single person in society has to be engaged in producing commodities in order to exchange like for like. This means that unproductive members, like babies, cannot be fed at all, and that crucial services like, say, transporting the goods to market, cannot be paid for. Thus, even if everyone owns their own means of production, they must exploit their own labor in order to purchase food for their children, transportation of their goods to market, education, medical services, etc. Thus, a society based on capitalistic exchange requires surplus-value in order to operate, and even in the world where everyone owns their own means of production, they still exploit their own labor.

There are then three solutions:
A) Tax everyone a part of their surplus value so that muh big gubermand can strictly enforce everyone's right to own means of production, alongside a range of functions to keep this form of capitalism functional in its idyllic form. This becomes increasingly difficult as production needs to be centralized for larger projects, and the result is state capitalism of a sort.
B) Abandon the idea of exchange-value and the commodity-form altogether and start producing for use rather than exchange, along a socially agreed-upon basis that is agreeable to all people in society (or at least most people in society). In this system, instead of a big gubermand regulating everything and enforcing strict tax collection and private property laws, people are free to produce and do whatever the fuck they want as long as they meet socially agreed-upon production and distribution goals. This method doesn't have to involve a big fucking gubermand and instead involves councils of people who hash out what their communities need, work together on large-scale projects, and are attentive to the needs of the individuals in communities and the freedom of people to live a decent life. The only condition is that property as we know it must be abolished and the way people relate to the things we create must change.
C) Forget about trying to engineer the perfect world where everyone owns their means of production and let capitalism reassert itself. This puts us back to square one.

And as to why letting capitalism assert itself is a bad idea; eventually, capital concetrates, and turns into either a monopoly or an oligopoly. This basically means that the surviving firms concentrate capital at an even more rapid pace, eventually overtake the gubermand, and BECOME the gubermand themselves.

Now you may say, so what? Natural selection, right? Except, it's not really natural selection, it's just a group of powerful people asserting themselves. I've seen enough nepotism and cronyism - I think we've all seen enough nepotism and cronyism - to know that, absent a sobering influence, this kind of capitalism won't be an ideal system at all, but a hopelessly corrupt state of affairs held together by nothing but enforcement of property rights. In such a world, the "money" becomes nothing more than company scrip, and there is no freedom or even a real purpose to the capitalistic enterprise. It's just the end point of the accumulation of power.

Perhaps, at this point, such a world is inevitable. The US government is practically a slave to the oligarchic interests already. What comes after that, I can only guess at, but I don't think it will be anything good if it's rooted in an ideology of Social Darwinism. Social Darwinism hasn't produced a greater society, it's produced a rat race where the best grifters and liars rise to the top, and only the sobering influence of reality has occasionally brought them low.

Marx does not say theRead Wage Labour and capital is a really short (and not really difficult ) Marx work who will clear this for you, and present you the LTV.
It is probably the best introduction to Marx.

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Sorry! This is a no smokers area!

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