Labor theory of value

labour theory of valuevaluelabor theorytheory of value(Labor Theory of Value)cost of productioncost/benefit ratiofrom laborhuman labor into a larger valuelabor
The labor theory of value (LTV) is a heterodox theory of value that argues that the economic value of a good or service is determined by the total amount of "socially necessary labor" required to produce it.wikipedia
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Theory of value (economics)

theory of valuevaluepower theory of value
The labor theory of value (LTV) is a heterodox theory of value that argues that the economic value of a good or service is determined by the total amount of "socially necessary labor" required to produce it.
Scientific advancements in the seventeenth and eighteenth centuries inspired English economist William Petty in developing his labor theory of value where the amount of labor that goes into producing or supplying a product determines the value no matter the product.

Anarchist economics

economicsanarchistanarchist economists
LTV is usually associated with Marxian economics, though it also appears in the theories of earlier classical liberal economists such as Adam Smith and David Ricardo and later also in anarchist economics.
Mutualism is based on a labor theory of value which holds that when labor or its product is sold, in exchange it ought to receive goods or services embodying "the amount of labor necessary to produce an article of exactly similar and equal utility".

Marxian economics

MarxianMarxian economistMarxist economics
LTV is usually associated with Marxian economics, though it also appears in the theories of earlier classical liberal economists such as Adam Smith and David Ricardo and later also in anarchist economics.
The most mature version of this theory, presented in On the Principles of Political Economy and Taxation (1817), was based on a labour theory of value in which the value of any produced object is equal to the labor embodied in the object and Smith too presented a labor theory of value, but it was only incompletely realized.

Value (economics)

valueeconomic valuemonetary value
The labor theory of value (LTV) is a heterodox theory of value that argues that the economic value of a good or service is determined by the total amount of "socially necessary labor" required to produce it.
In classical economics, the value of an object or condition is the amount of discomfort/labor saved through the consumption or use of an object or condition (Labor Theory of Value).

Transformation problem

Marxian fundamental theoremtransformation from labor values into pricestransformations
The demonstration of the relation between commodities' unit values and their respective prices is known in Marxian terminology as the transformation problem or the transformation of values into prices of production.
In 20th-century discussions of Karl Marx's economics, the transformation problem is the problem of finding a general rule by which to transform the "values" of commodities (based on their socially necessary labour content, according to his labour theory of value) into the "competitive prices" of the marketplace.

David Ricardo

RicardoRicardianDavid Ricardo,MP
LTV is usually associated with Marxian economics, though it also appears in the theories of earlier classical liberal economists such as Adam Smith and David Ricardo and later also in anarchist economics. Both David Ricardo and Karl Marx tried to quantify and embody all labor components in order to develop a theory of the real price, or natural price of a commodity.
He advanced a labor theory of value:

Karl Marx

MarxMarx, KarlMarxist
Both David Ricardo and Karl Marx tried to quantify and embody all labor components in order to develop a theory of the real price, or natural price of a commodity.
In A Contribution to the Critique of Political Economy, Marx expands on the labour theory of value advocated by David Ricardo.

Muqaddimah

MuqaddimaMuqadimmahAl-Muqaddimah
Scholars such as Joseph Schumpeter have cited Ibn Khaldun, who in his Muqaddimah (1377), described labor as the source of value, necessary for all earnings and capital accumulation.
Ibn Khaldun also introduced the labor theory of value.

Adam Smith

SmithA SmithAdam Smith’s
LTV is usually associated with Marxian economics, though it also appears in the theories of earlier classical liberal economists such as Adam Smith and David Ricardo and later also in anarchist economics.
Classical economists presented competing theories of those of Smith, termed the "labour theory of value".

Cost the limit of price

19th century American individualist anarchists based their economics on the LTV, with their particular interpretation of it being called "Cost the limit of price".
Cost the limit of price was a maxim coined by Josiah Warren, indicating a (prescriptive) version of the labor theory of value.

Mutualism (economic theory)

mutualismmutualistmutualists
Pierre Joseph Proudhon's mutualism and American individualist anarchists such as Josiah Warren, Lysander Spooner and Benjamin Tucker adopted the liberal Labor Theory of Value of classical economics and used it to criticize capitalism while favoring a non-capitalist market system.
Mutualism is based on a version of the labor theory of value holding that when labor or its product is sold, it ought to receive in exchange goods or services embodying "the amount of labor necessary to produce an article of exactly similar and equal utility".

Exploitation of labour

exploitationexploitation of workersexploit
Based on the discrepancy between the wages of labor and the value of the product, the "Ricardian socialists"—Charles Hall, Thomas Hodgskin, John Gray, and John Francis Bray, and Percy Ravenstone —applied Ricardo's theory to develop theories of exploitation.
This comes from Marx's labour theory of value which states that the exchange-value of a commodity is proportional to the socially necessary amount of labour time to produce the commodity.

Capital (economics)

capitalcapital flowsinvestment capital
The standard formulation is that prices normally include a level of income for "capital" and "land".
It is called "variable" since the amount of value it can produce varies from the amount it consumes, i.e., it creates new value.

Thomas Hodgskin

Hodgskin
Based on the discrepancy between the wages of labor and the value of the product, the "Ricardian socialists"—Charles Hall, Thomas Hodgskin, John Gray, and John Francis Bray, and Percy Ravenstone —applied Ricardo's theory to develop theories of exploitation.
He used Ricardo's labour theory of value to denounce the appropriation of the most part of value produced by the labour of industrial workers as illegitimate.

Paradox of value

diamond-water paradoxparadoxwater-diamond paradox
A classical paradox often comes up when considering this type of value.
The theory of marginal utility, which is based on the subjective theory of value, says that the price at which an object trades in the market is determined neither by how much labor was exerted in its production, as in the labor theory of value, nor on how useful it is on the whole.

John Locke

LockeLockeanJ Locke
Scholars have also pointed to Sir William Petty's Treatise of Taxes of 1662 and to John Locke's labor theory of property, set out in the Second Treatise on Government (1689), which sees labor as the ultimate source of economic value.
This position can be seen as a labour theory of value.

Cincinnati Time Store

Time Storelabor notetime stores
He put his theories to the test by establishing an experimental "labor for labor store" called the Cincinnati Time Store at the corner of 5th and Elm Streets in what is now downtown Cincinnati, where trade was facilitated by notes backed by a promise to perform labor.
The Cincinnati Time Store (1827-1830) was the first in a series of retail stores created by American individualist anarchist Josiah Warren to test his economic labor theory of value.

Law of value

economic lawslaws of capitalism
Contrary to popular belief Marx never used the term "Labor theory of value" in any of his works but used the term Law of value, Marx opposed "ascribing a supernatural creative power to labor", arguing as such:
Thus, the fluctuating exchange value of commodities (exchangeable products) is regulated by their value, where the magnitude of their value is determined by the average quantity of human labour which is currently socially necessary to produce them (see labor theory of value and value-form).

Anarchist schools of thought

anarchist school of thoughtAnarcho-transhumanismanarchist thought
Mutualism is an economic theory and anarchist school of thought that advocates a society where each person might possess a means of production, either individually or collectively, with trade representing equivalent amounts of labor in the free market.
Many mutualists believe a market without government intervention drives prices down to labor-costs, eliminating profit, rent and interest according to the labor theory of value.

Economics

economiceconomisteconomic theory
Mutualism is an economic theory and anarchist school of thought that advocates a society where each person might possess a means of production, either individually or collectively, with trade representing equivalent amounts of labor in the free market.
Other classical economists presented variations on Smith, termed the 'labour theory of value'.

Surplus value

surplus-valueexploitationsurplus
According to Marx, surplus value is extracted by the capitalist class as a whole and then distributed according to the amount of total capital, not the just variable component.

Cost-of-production theory of value

cost of productionproduction costsCost-of-production value
Ricardo's theory was a predecessor of the modern theory that equilibrium prices are determined solely by production costs associated with Neo-Ricardianism.
David Ricardo mixed this cost-of-production theory of prices with the labor theory of value, as that latter theory was understood by Eugen von Böhm-Bawerk and others.

Liberalism

liberalliberalssocially liberal
Pierre Joseph Proudhon's mutualism and American individualist anarchists such as Josiah Warren, Lysander Spooner and Benjamin Tucker adopted the liberal Labor Theory of Value of classical economics and used it to criticize capitalism while favoring a non-capitalist market system.
Jean Baptiste Say challenged Smith's labour theory of value, believing that prices were determined by utility and also emphasised the critical role of the entrepreneur in the economy.

Benjamin Tucker

Benjamin R. Tucker(Benjamin) TuckerTucker
Pierre Joseph Proudhon's mutualism and American individualist anarchists such as Josiah Warren, Lysander Spooner and Benjamin Tucker adopted the liberal Labor Theory of Value of classical economics and used it to criticize capitalism while favoring a non-capitalist market system.
Tucker said socialism was the claim that "labor should be put in possession of its own" while holding that what he respectively termed state socialism and anarchistic socialism had in common was the labor theory of value.

Socially necessary labour time

socially necessary labor timelabor timenecessary labor time
Marx used the concept of "socially necessary labor time" to introduce a social perspective distinct from his predecessors and neoclassical economics.
Unlike individual labour hours in the classical labour theory of value formulated by Adam Smith and David Ricardo, Marx's exchange value is conceived as a proportion (or 'aliquot part') of society's labour-time.