Labor theory of value

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Labor theory of value

In: Economics
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according to the wiki, it refers to an object’s value is based on the amount of necessary labor involved in it’s production. it does not take demand into account, instead attempts to quantify the value of labor and the minimum amount required to produce said object.

It is a way of looking at the value of goods, proposed by Karl Marx in the 19th century, which is based on keeping track of all the human time and effort which went into their creation and delivery: the work of building them, the work of *learning how* to build them, the work of extracting the natural resources, and the work of putting them in a store or shipping them to you or whatever.

He did this to try and separate that kind of value, from the value which is derived purely from positional advantages, and the relative scarcity of them. Let’s say we’re both apple farmers. It might take the exact same amount of work to cultivate two different kinds of apple tree, but suppose, thanks to some act of law, I have exclusive access to the only seeds in the world of some super-rare delicacy of an apple variety, and you just have some boring, mealy Red Delicious. I might be able to get rich selling my apples while you can barely make a living, even if we’re putting the exact same work in. The labour theory of value, in this case, would be a way to explain what fraction of my wealth comes from my labour, vs. what part of it comes from the exclusive seed arrangement.