a minor note on the labor theory of value (not long enough to be boring)
The following -- after the astericks and in italics in this blog -- comes from the geolibertarianism FAQ that i have a link to in my "links" section. It discusses the land value tax (LVT), which means a 100% tax on all rents taken from land, ideally to replace all other taxes:
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7. Isn't the LVT based on Karl Marx's labor theory of value?
No. Karl Marx’s labor theory of value asserts that the value of an object is a result of the labor expended to produce it. Henry George flat-out rejected this view:
"It is never the amount of labor that has been exerted in bringing a thing into being that determines its value, but always the amount of labor that will be rendered in exchange for it." -- The Science of Political Economy, p. 253
Why, then, do some mistakenly identify Marx's labor theory of value as being one of the core premises of the LVT? Because many LVT-advocates often describe land value as being produced by the community, and, in so doing, unwittingly sacrifice clarity for brevity. What they actually mean is this. It's not that members of the surrounding community produce land value itself, but that they produce the goods and services which give rise to that value. Max Hirsch put it this way:
"The value of labour-products is the measure of the service which their rightful owner has rendered to the community. The value of land is the measure of the service which the community is expected to render to the owners of land." -- Democracy vs. Socialism, p. 348
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I'd always based my core ideas about property rights on something similar to, or derived from, an admittedly vulgar understanding of the labor theory of value. As a note, i have to agree with the above that, yes, strictly speaking labor does not actually determine the value that others will pay for an item of property in a market exchange.
However, i consider this to be a determination of price rather than value as such. What i personally mean when i think about labor bringing forth the value of produced property, i mean its use for people. That is, you cannot make use of some material from nature until you expend some energy -- some labor -- in bringing it somehow out of nature, essentially "producing" a finished product. I think this would probably include, although obviously to a small extent, even the labor expended to pick an apple off a tree, for example -- in addition to, say, taking metal from the ground to make automobiles or whatever. So technically, both George and Marx are correct.
* * * * *
7. Isn't the LVT based on Karl Marx's labor theory of value?
No. Karl Marx’s labor theory of value asserts that the value of an object is a result of the labor expended to produce it. Henry George flat-out rejected this view:
"It is never the amount of labor that has been exerted in bringing a thing into being that determines its value, but always the amount of labor that will be rendered in exchange for it." -- The Science of Political Economy, p. 253
Why, then, do some mistakenly identify Marx's labor theory of value as being one of the core premises of the LVT? Because many LVT-advocates often describe land value as being produced by the community, and, in so doing, unwittingly sacrifice clarity for brevity. What they actually mean is this. It's not that members of the surrounding community produce land value itself, but that they produce the goods and services which give rise to that value. Max Hirsch put it this way:
"The value of labour-products is the measure of the service which their rightful owner has rendered to the community. The value of land is the measure of the service which the community is expected to render to the owners of land." -- Democracy vs. Socialism, p. 348
* * * * *
I'd always based my core ideas about property rights on something similar to, or derived from, an admittedly vulgar understanding of the labor theory of value. As a note, i have to agree with the above that, yes, strictly speaking labor does not actually determine the value that others will pay for an item of property in a market exchange.
However, i consider this to be a determination of price rather than value as such. What i personally mean when i think about labor bringing forth the value of produced property, i mean its use for people. That is, you cannot make use of some material from nature until you expend some energy -- some labor -- in bringing it somehow out of nature, essentially "producing" a finished product. I think this would probably include, although obviously to a small extent, even the labor expended to pick an apple off a tree, for example -- in addition to, say, taking metal from the ground to make automobiles or whatever. So technically, both George and Marx are correct.
posted by jlhart7 at 1:47 PM
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