r/Classical_Liberals • u/TolaYoda • Aug 19 '20
What do Classical Liberals think about the Labor Theory of Value? Question
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u/dbb313 Aug 19 '20
Today, most or all would consider it debunked--correctly, in my opinion. However, early classical liberals subscribed to the theory prior to the marginal revolution of the late 19th century, though much of their writing would later help to debunk it. In particular, I'd say Smith, J.S. Mill, Bastiat, Bentham and a few others could all be considered both classical liberals and LTV adherents.
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u/BeingUnoffended Be Excellent to Each Other! Aug 19 '20 edited Aug 19 '20
Smith, J.S. Mill, Bastiat, Bentham and a few others could all be considered both classical liberals and LTV adherents.
Right, because it was the best available answer at the time. That didn’t stop them from poking at the holes in LTV while continuing to look for better answers; Smith’s “Water-Diamond Paradox” being one example.
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u/dbb313 Aug 19 '20
Agreed. A lot of economics writing from classical liberals was knocking at the door of marginalism and I don't think those writers would adhere to the LTV given decent alternatives.
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u/tkyjonathan Aug 19 '20
That its bullshit. Here is an example:
If I goto my boss's back yard, spend all day digging a big hole and then cover the hole back up in the evening, according to the labour theory of value, how much does my boss owe me for my labour?
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Aug 19 '20
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u/tkyjonathan Aug 19 '20
Does that mean that the labour's value depends on its market value?
Because that's completely out of the scope of Marx's 'theory'.
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u/BeingUnoffended Be Excellent to Each Other! Aug 19 '20
Labor Value isn’t Marx’s theory strictly speaking. He largely derived is understanding of value from earlier economists – such as Adam Smith – and ran with them, never stopping to really question if their premises were true. That’s always been a glaring hole in Marxism; Enlightenment Liberal like Smith only ascribed to Labor Theory as a consequence of it being the best explanation available in their time. Despite that, they never stopped looking for better answers (even Smith notes the paradoxes Labor Theory presented) and Liberal has moved on from it already in Marx’s time.
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Aug 22 '20
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u/tkyjonathan Aug 22 '20
Then are labour happy to take on the risk of not getting paid a salary when the products of their labour don't sell on the market?
Doesn't seem like it. Nor do they have any idea what the market wants or will want a year from now.
LTV is complete and utter bullshit. No science. Just meant to get people angry and those who employ them and give them opportunities.
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u/Musicrafter Aug 19 '20
The LTV is a general theory of market products, and is not a microeconomic theory that applies to individual transactions.
That's where the idea of "socially necessary" labor time comes in. If a product does not sell on the market it will not be made, so no labor is expended there in the long run. Maybe a couple of isolated incidents occur where someone does dig valueless ditches for no reason but that's outside the scope of the LTV.
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u/JobDestroyer Aug 19 '20
What determines whether something is socially necessary?
Answer: It's entirely subjective.
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u/Musicrafter Aug 19 '20
The market, in Marx's conception. He used the term a bit differently than you and I might. In his eyes, if something was produced on the market, it was labeled "socially necessary". That's just the terminology he made up, I didn't do that, but let's keep things honest regarding what Marx meant.
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u/JobDestroyer Aug 19 '20
Marx isn't exactly known for having great ideas in regards to economic activity, and he didn't invent LVT, so we don't even need to acknowledge him at all tbh. He's just some nutjob pretending to be an economist who had some zany ideas that dumb people ate up.
Classical liberals do not heed marx because marx is not worth heeding, and they do not heed the labor theory of value because the labor theory of value is nonsense.
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u/Musicrafter Aug 19 '20
Calling him names doesn't help actually discuss his ideas. I agree, many of his ideas are flawed.
But I actually do think there is at least a kernel of merit in the LTV, along the lines of Kevin Carson's "two blades of a pair of scissors" approach to understanding it: the LTV is the long-run explanation for why equilibria come to rest where they do, and marginalism explains why they fluctuate in the short run.
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u/JobDestroyer Aug 19 '20
Calling him names doesn't help actually discuss his ideas.
Good, I'm not interested in discussing that moron.
I agree, many of his ideas are flawed.
You mean "Flat incorrect and borderline incoherent"?
But I actually do think there is at least a kernel of merit in the LTV, along the lines of Kevin Carson's "two blades of a pair of scissors" approach to understanding it: the LTV is the long-run explanation for why equilibria come to rest where they do, and marginalism explains why they fluctuate in the short run.
No, it doesn't. It's just a nonsense crackpot idea from back in the day with no explanatory applications whatsoever. It's debunked. Pseudoscience. Heterodox nonsense.
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u/Musicrafter Aug 19 '20
Yeah, obviously you're not interested in discussing it. You just want to call it names. Nice to know.
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u/JobDestroyer Aug 19 '20
The threads asking what classical liberals think about LTV.
Well, we think it's crackpot pseudoscience from the 1800s that doesn't make any real sense if you think about it even a little bit. It's on par with phrenology.
It's kind of weird that you'd even be asking why we don't look at it seriously. It's not exactly something that should be taken seriously.
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u/Musicrafter Aug 19 '20
I am always willing to take an idea seriously, at least up to the point that I feel I satisfactorily understand its basic ins and outs.
This willingness to engage with Marxian ideas is exactly what brought me to accept parts of them, from having previously derided them in exactly the same way you are doing now.
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Aug 19 '20
You have missunderstood LTV. It doesnt say all labour creates value, it says all value is created by labour
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Aug 19 '20
Well that is also clearly false. If I buy a tool to do the same job as an equally skilled person doing something manually and I am able to now do complete 5x more products, I am not magically putting in 5x more work as my college working without the tool. Obviously the tool is responsible for the increase in productivity, not the laborer.
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Aug 19 '20
Well that is also clearly false. If I buy a tool to do the same job as an equally skilled person doing something manually and I am able to now do complete 5x more products, I am not magically putting in 5x more work as my college working without the tool. Obviously the tool is responsible for the increase in productivity, not the laborer.
Jesus.. LTV does NOT say if you work 100 times ”harder” it makes the value of something 100 times more. It simply says labour is what creates value.
If you do not perform labour, your tool is not going to produce anything. Thus your labour was necessary for value to be created, without your labour, no value would have been added
Read the wiki about LTV
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Aug 19 '20
Yes labor obviously creates some value, but it clearly does not create all of it.
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u/JobDestroyer Aug 19 '20
Air is of value. Who labored to create it?
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Aug 19 '20
We are talking specifically about a tool that has been created, not raw resources.
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u/JobDestroyer Aug 19 '20
Oh, really? So the LTV has to separate things out like that?
Because subjective value theory doesn't, it's pretty universal across all manner of things, even applying to things that don't exist like "good ideas" and "songs".
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Aug 19 '20
I never said that. You are talking to the wrong person. We were talking specifically about goods that are created.
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Aug 19 '20
labor went into making the tool
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Aug 19 '20
Some yes, but again, things besides labor went in.
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Aug 19 '20
And without the labor it would be useless. My point is that you have not “debunked” ltv with your trivial example
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u/thermobear Friedmanite Aug 19 '20
https://en.m.wikipedia.org/wiki/Labor_theory_of_value
Quite an interesting read. If you read to understand rather than to refute, I’d argue it still has a lot of holes. For example, if the “real” price of a thing is determined by the total amount of labor, is individual skill taken into account? If it costs me $100 to have my fence painted, and person A is highly skilled while person B is less skilled, person B would use more labor to get the same result. According the LTV and its proposed maxim, person B should charge more for the service!
There are some further criticisms on the page, but at the very least, you’ll have learned why some people feel exploited by profit.
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u/Disonance Agorism, Anarchy, Markets Aug 19 '20
Formerly I have been a ML/stalinist, ancom, and classical liberal so I'll have a shot at this. I would assume many or probably even most classical liberals would be against the labor theory of value. As an ideology classical liberalism is about individualism, liberty, and equal rights/opportunity. All classical liberals I have talked to, and what I believed in the past when I considered myself a classical liberal believe in a relatively free market unhindered by the government for the most part. Obviously they believe in some regulations because they aren't ancaps. Not all labor is equal, and here is an example. If you need 10 hens to feed your family and you only did the work necessary to be paid 5 hens then you will have to go home and divvy up the 5 hens and hope its enough, or alternatively you could work harder or more hours and get the 10 hens. I hope that made sense I know I probably said more than I needed to and this is probably quite long winded, sorry. Cheers and take care!
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u/CactusSmackedus Aug 19 '20
Opposition to the labor theory of value does not come from a place of political ideology
it comes from the observation that the labor theory of value does not represent reality and cannot be used to make predictions about how people behave or make decisions
If it is possible to be a ML/Stalinist/Ancom without holding inconsistent beliefs (I am not certain it is) then one would also view the labor theory of value correctly, which is to say, as a false and misleading theory about the way humans engage with economic value
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u/chasonreddit Aug 19 '20
What do I think about the labor theory of value?
Ha.
HaHaHaHaHaHaHaHaHaHaHaHaHaHaHa
Sorry, I should give a more intelligent response but that's all I got.
It's so false to the face, I can't be bothered to try to cite a rebuttal.
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u/steven-teh-man Aug 19 '20
It, and any analysis based on it, has been disproved since the Subjective Theory of Value emerged in the late 19th century. See the writings of Walras or Menger for more.