The Subjective Theory of Value

wtf i love capitalism now

the IMF, the world bank, think thanks and other financial institutions are also subverted by irrationality, chaos, cronyism, bigotry, religion and banter.
also

me too

They seriously think that they rejected Marx with their HOMO_ECONOMICUS(That cant be proved with real world analises, unlike Marx's LTV), AYYY LMAO Lolberts are a joke.

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Heh, this.
rdwolff.com/economic_theorists_the_high_priests_of_capitalism

If you like marxism, you don't become an economist.
If you like economy, you don't become a marxist.

M8 I'll give you a run-down. If you look at how things are actually produced in society it all comes down to labor. All the costs are related to labor at the end of the day. If you invest in new machines those have to be built; to build the machines the raw materials have to be mined, shipped, and refined; and once you've acquired the machines you'll need more labor to operate and maintain them.

How do you figure out the value of the machines before they can be sold? Not from any intrinsic properties or even their use-value – what they're actually meant to do, because that has little to do with their exchange-value – what you actually pay to acquire them. You figure it out from the production process – from labor.

Modern relations of production grew out of an economy measured by work hours, and it remains so today. Whatever is produced in society is measured by the labor required to produce it. Keep in mind that labor itself is commoditized as labor-power and sold on the market. Wages are the exchange-value of labor, and exchange-values have little to do with the quality of the commodity itself, its use-value, or other subjectivities. Skilled labor is naturally worth more, but that is because it can produce faster, better, than unskilled labor – it is a quantitative measurement rather than qualitative.

The exchange-value of a commodity, therefore, is the socially necessary labor required to produce it. All production is collective and thus social – hence socially necessary. It's not a matter of individual productivity. It's about the average productivity required to produce a quantity of commodities. Some workers work harder than others, or are more skilled than others – but not all are skilled or motivated. Wages and salaries are not set according to individual productivity but the average. The production of a commodity will probably require all kinds of different labor, but that has been purchased as labor-power. Now it is a matter of what can be produced in the time the workers labor – their quantitative output.

Once a given quantity of commodities have been produced it is a matter of selling them – the value invested and contained in them cannot be realized until they have been sold. This is very important for the capitalist. Knowing the cost of production – the labor required to produce the good or service – the capitalist sets an exchange-value according to market conditions and competitiveness. If the goods sell, the investment is returned and then some in the form of surplus labor value. If not, there's trouble. But we'll focus on the former.

As the workers produce collectively and sell their labor-power in exchange for a wage, they produce more than what they receive in their wages. Why else would the capitalist purchase labor? If the capitalist's only return was the cost of production, there would be little point. The capitalist buys in order to sell: M–C–M'. In other words, they use their money to buy commoditized labor-power and then sell the good or service above the costs of production, realizing a profit – surplus labor value, or, more often, surplus value. That surplus value, apart from what is used for their own consumption, is then reinvested or handed out as dividends by the capitalist – thus capital accumulates by its own logic playing out in real production.

Bourgeois economics denies this root and branch. It concentrates on things like "human nature" and other subjectivities which ignore how things are actually produced. True to the workings of capitalism, things like property have a life of their own in bourgeois economic theory, while living beings like workers act as the adjutant to the production process, not its driving force. Bourgeois economics inverts reality, placing property above people – and thus social relations of production.

"value" is the biggest spook of all spooks. why is something valuable? totally subjective. take gold: why is it valuable? because it's rare? shiny? many things are rare and/or shiny. because it can require effort to find or extract? the same can be said for almost anything on earth.

value is a fantasy; one that the dumb masses consent to without question or hesitation.

Responding was valuable to you.

doesn't this just mean that profit and surplus-value is based off the exchange-value of an object aka its money-price?

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The way I understand it LTV and subjective theory are just two different ways to look at capitalism. While marginal theory basically equates price and value, LTV tries to put production into societal context.

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If every worker was given the full value of their labor – a full return for every hour they spend in production – it would mean the return of their portion of the profit. As it stands, the capitalist suppresses labor costs by the wage system, allowing him to appropriate the full value of the exchange. Oil is a good example of this – production costs are very low – but due to various market factors the markup is extreme. Take iPhones: production costs in China via Foxconn are low, but the exchange-value of an iPhone is hundreds of US$. This is how profit is made. As the capitalist has purchased commoditized labor-power, the worker has abrogated the full value of their labor. Also, profit is surplus value, there is no "and".

"We now consider the value theory implicit in the processes of commodity production and exchange. Unlike use values and prices, there is no self-evident starting point for the analysis. We either start with a priori assumptions about the nature of value, or seek an objective theory of value through a material investigation of how society functions. Marx takes the latter course. Since the world of appearance is dominated, in our own society, by the prices of quantities of use values, these provide the data for establishing an initial version of the value theory. Once the latter is in place, the dialectical relationship between values, prices and use values can be examined as a means to dissect the inner logic of capitalism.

The opening argument in Capital is strikingly simple. Marx defines the commodity as an embodiment of use and exchange values, abstracts immediately from the former, and proceeds directly to analyse exchange values. Putting two different use values (which are themselves qualitatively different) equal to each other in exchange implies that both use values have something in common. The only attribute that all commodities have in common is that they are products of human labour. When 'commodities are looked at as crystals of this social substance, common to them all, they are values' (Capital, vol. 1, p. 38).

The argument is almost identical to that laid out in Ricardo's Principles of Political Economy and Taxation. Marx appears to follow Ricardo entirely in treating the problem of value, at this stage, as one of finding an appropriate standard of value.8 The only modification is his introduction of a distinction between 'concrete useful labour' defined as 'human labour exercised with a definite aim, to produce use values' and 'human labour in the abstract', which 'creates and forms the value of commodities' (Capital, vol. 1, pp. 41-6). But Marx's argument now appears purely tautological - the standard of value is that aspect of human labour which creates value!

Marx breaks out of the tautology by an analysis of the difference between abstract and concrete labour. All labour is concrete in the sense that it involves the material transformation of nature. But market exchange tends to obliterate individual differences both in the conditions of production and on the part of those doing the labouring. If I paid according to actual labour time embodied, then the lazier the labourer, the more I should pay. But generally I pay the going market price. What happens in effect is that the commensurability of commodities achieved through exchange renders the labour embodied in them equally commensurable.

If it takes one day to make a pair of shoes on average, then the abstract labour embodied in a pair of shoes is one day no matter whether it takes the individual labourer two or fifty hours to make. Abstract labour is defined then as 'socially necessary labour time' (Capital, vol. 1, p. 39).

All that this does is to insert the qualification 'socially necessary' into Ricardo's theory of labour time as the standard of value. It hardly makes
Marx's version strong enough to bear the weight of all the subsequent analysis, nor does it seem profound enough to justify treating it as the solid foundation of Marxian theory and therefore as a proposition to be defended at all costs. Until, that is, we ask what, exactly, is meant by 'socially necessary'?"

(1/?)

"The invocation of social necessity should alert us. It contains the seeds for Marx's critique of political economy as well as for his dissection of capitalism. What Marx will eventually show us, in a discourse pervaded by a profound concern with marking the boundaries between freedom and necessity under capitalism, is that human labour in the abstract is a distillation, finally accomplished under very specific relations of production, out of a seemingly infinite variety of concrete labour activities. We will discover that abstract labour can become the measure of value only to the degree that a specific kind of human labour - wage labour - becomes general.

This immediately differentiates Marx's theory of value from conventional labour theories of value (Ricardo's in particular). Marx turns an a-historical, universal statement into a theory of value that operates solely under capitalist relations of production. At the same time, the value theory reaches out beyond the problem of simply defining a standard of value for determining the relative prices of commodities. The value theory comes to reflect and embody the essential social relations that lie at the heart of the capitalist mode of production. Value is conceived of, in short, as a social relation. But Marx does not throw this conception at LIS arbitrarily, as an a priori construct. He seeks, rather, to show us, step by step, that this is the only conception of value that makes sense; that the law of value as he conceives of it indeed operates as
a guiding force within capitalist history. And the proof of this must necessarily lie at the end of his analysis, not at the beginning.

Marx begins on the explication of 'socially necessary' almost immediately. It is, we are told, 'the labour required to produce an article under the normal conditions of production and with the average degree of skill and intensity prevalent at the time'. This cannot be understood without returning to an analysis of use values. First, the productivity of labour is considered in purely physical terms: it is set 'by the average amount of skill of the workman, the state of science, and the degree of its practical application, the social organization of production, the extent and capabilities of the means of production, and by physical conditions' (Capital, vol. 1, p. 40). Second, labour can create no value unless it creates social use values - use values for others. Marx does not elaborate on what is meant by a 'social use value' at this stage. He simply asserts that value has to be created in production and realized through exchange and consumption if it is to remain value. This brief return to the sphere of use values is a foretaste of much that is to come.

But at this point Marx chooses to focus more closely on value in relation to exchange value. His investigation of the material forms of value achieved through exchange reveals that the substance of value - human labour in the abstract - can regulate commodity production and exchange only if there is some way that value can be represented materially. The conclusion quickly follows: 'money as a measure of value, is the phenomenal form that must of necessity be assumed by that measure of value which is immanent in commodities, labour time (Capital, vol. 1, p. 94).

(2/?)

Notice, once more, the invocation of necessity. When we relate this back to the idea of 'socially necessary labour time' we arrive at an important proposition. The existence of money is a necessary condition for the separation and distillation of abstract out of concrete labour.
We can see why this is so by examining the consequences of a growth in exchange relations. This growth, we have already seen, is dependent upon, at the same time as it gives rise to, the money form. But it also has consequences for the distinction between concrete and abstract labour.

It is only by being exchanged that the products of labour acquire, as values, one uniform social status, distinct from their varied forms of existence as objects of utility. This division of a product into a useful thing and a value becomes practically important, only when exchange has acquired such an extension that useful articles are produced for the purpose of being exchanged. . . . From this moment the labour of the individual producer acquires socially a two-fold character. On the one hand, it must, as a definite useful kind of labour, satisfy a definite social want, and thus hold its place as part and parcel of the collective labour of all, as a branch of a social division of labour that has sprung up spontaneously. O n the other hand, it can satisfy the manifold wants of the individual producer himself, only in so far as the mutual exchange-ability of all kinds of useful private labour is an established social fact, and therefore the private useful labour of each producer ranks on an equality with that of all others. The equalization of the most different kinds of labour can be the result of an abstraction from their inequalities, or of reducing them to their common denominator, viz. expenditure of human labour-power or human labour in the abstract.
(Capital, vol. 1, p. 73).

Marx's rapid movement from one 'wlndow' to another in the first chapter of Capital has brought us to the point where we can clearly see the interconnections between the growth of exchange, the rise of the money form and the emergence of abstract labour as a measure of value. But we have also gained sufficient perspective on these interrelations to see that the way things appear t o us in daily life can conceal as much as it can reveal about their social meaning. This idea Marx captures in the concept of 'the fetishism of commodities'

(3/3) for the benefit of reading

typical socdem
David Harvey's The Limits to Capital

Look into post-keynesian economics MY DUDE

Literally the same thing if you replace economists with biologists or anthropologists and marxist with racist.

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