I know the LTV was never really meant to determine price but I' curious: are there any studies that can show which of the two is the more accurate one?
I've seen a couple of papers testing the labour theory of value and some others testing the marginal utility/subjective theory of value, but never confronting the two directly.
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Heres a direct comparison,
When you go to the supermarket go up to the counter and try to haggle on the price of the bread
I was hoping for a serious response…
The LTV explains the movement of capital on a grand scale.
STV is a thought experiment where you say "what if it's all like just like subjective, man" that way we don't have to explain shit.
I'm not disagreeing, but this "thought experiment" is the mainstream conception of value, so I find it useful to have empirical data on it, in particular against the LTV.
I'm pretty sure there was a study that showed the LTV could be used to determine price with 93% accuracy, but fuck me if I can find it.
Gotcha right here buddy
That would probably be because the STV functions almost exclusively as an aphoristic, "pragmatic" rebuttal in it s relation to the LTV. The two will not relate because, within their own horizons of experience, the other must necessarily be false. However, this is not to play the game of tired post-modern relativity, as the LTV functions as matheme, while the STV solely exists to assert that the LTV is incorrect. The STV cannot exist within the bounds of quantifiable mathematics or it would dilute the message that value is only metered by those that value things. It being the thought experiment behind the mainstream conception of value speaks only to its ability to assume some form of defense of what already existed, as the logic of capital reproduced and functioned long before the STV was conjured in its defense. If you'd like to read more on the modern iteration of capitalist economics, I'd read Anwar Shaikh' essays on the positivism of the theory of comparative trade (Globalization and The Myth of Free Trade: History, Theory and Empirical Evidence)
Good stuff. Thanks fam.
I really need to study Shaikh, seems like a great lad.
Though I am not conviced the STV exists solely to contradict the LTV, considering the theory was developed together with Marx's own work. That said its modern incarnation may very well be there only to defend mainstream economics from Marxist critiques.
It's also undeniable that both theories serve deep ideological purposes. Without the LTV the Marxian argument for workers' exploitation would be a lot weaker and without the subjectivity of the modern theory of value the "individualistic" narrative that all the shit that hits you is your own fault would fall apart.
How so? You don't need the LTV to see that the capitalist does not work for the profit the company creates.
I have ZERO clue why /lefrypol/ says this when in Capital Marx repeatedly uses the labor theory of value when discussing gold, linen, shirts, labor, etc…. He even directly refers to them with costs! I can't see how he wasn't applying the labor theory of value to price. He even talks about how a change in the labor of one product would lead to a change in the exchange value of another, which is just a fancy way to say price, no? Price is just the exchange rate for dollars for products.
Market price can be anything within the pounds of the monopoly price and the consumer surplus.
Value on the other hand or 'equilibrium price' is the measure of the commodity in relation to other commodities using the factor that is their commonality of production which is the average socially necessary labor time required to produce that commodity.
These are admittedly dumb questions, but what about energy extracted to create a product? Shouldn't the materials and electricity/power used factor into actual value independent of exchange?
You haven't really helped me.
Did Marx say this? Because Ive only seen the latter, perhaps I haven't read enough.
Price is just the exchange rate for dollars for products in a situation of perfect competition and equilibrium of supply and demand. Many factors compute into determining price, and you can't derive it solely from the magnitude of value alone.
Wait when are dollars/pounds/whatever NOT the price of a good in exchange value. Please teach me.
I don't see how the labor theory of value is in conflict with this in anyway.
I can imagine two situations.
You can see this with doctors, diamonds, etc… Perhaps computers as well. Also especially with diamonds you could almost say it takes an extreme amount of labor to obtain due to the monopoly, expectingly increasing the price.
Thusly higher demand and less supply.
You can see this with food. Even though it is a necessity, its in low demand for the first world. Tons of it is made, and it is low cost.
This giant post was just to show my thought process and why I don't understand the assertion.
I didn't say it was in conflict with the LTV.
So if the labor theory of value has no problem with imperfect supply and demand, and with my point about monopolies, then how are the relations between the labor embedded in products not an accurate measurement of price.
Or just why does price not work how I said it does? I would really enjoy an amswer, I know I am making long posts but I'm interested.
There's the transformation process as well. At the end of the day what counts is the return on investment, thus imbalances in the rate of profit between industries will distance prices from the value of the commodities in a way that it uniforms RoP between them.
This is because porky seeks to maximize profits, therefore will chase the most profitable industry, which means more competition in it and less in the one it is leaving behind, which produces an increase in price in the low RoP one and a decrease in the high one.
Alright my bad I didn't explain properly, that was an overly formalistic answer.
Ok so look at this graph okay, the market price can be anywhere between the monopoly price and the last price (the price where the producer breaks even) 0 profit. These bounds are determined by market conditions.
The value of the commodity though is what the price of the commodity would be under perfect market competition (no monopolies, many buyers, many sellers).
In marxist terms, commodities values are s+v+c (equilibrium price).
s = surplus value,
v = value of labor power,
c = constant capital
The monopoly price is a rent above the value of the commodity and is determined to be s+2v+2c, and as such the producer sells the commodity at the price that it's production costs are set to zero after paying wages and re-investing in capital.
The last price is v+c, literally just enough to break even with no surplus value (no profit).
That's volume 1, in volume 3 he says something else. And he warns you in volume 1 that he is simplifying and putting aside the issue of profit-rate equalization among industries with different organic composition of capital leading to divergence of price ratios from value ratios, even in the long term.