Leyla Shen wrote:[b]VD[/b] wrote:Labor theory of value is monumentally wrong [...]
Monumentally wrong, eh?
Finally you choose to attempt engaging a point. What happened to bring about this change? you had a revelatory vision or something? :)
- 1.Nature (as opposed to ideas) as the source of wealth (including, of course, human labour-power).
BS right off the bat, unless you are so dishonest as to count intellectual labor (i.e. source of ideas) as the 'nature' in question, in which case of course the posited 'nature vs. ideas' dichotomy was never valid in the first place.
You wouldn't happen to be trying one of those dumb definitional arguments again, would you?
The key problem here is the nature of
arbitrage. The value of arbitrage, of which trade is a special case, is the value of
information -- ideas.
2.Without production (work), society perishes. (Were you people even producing anything apart from Vodka there in the Ukraine?)
yeah, little girl, Ukraine used to be the breadbasket of Europe before marxists took over. Of course you, being ignorant of history, wouldn't know that.
BTW, in Ukraine, it's not vodka, it's horilka. A rather different drink.
3.Production for the satisfaction of various needs requires needs-specific, quantitatively proportional distribution of the total social labour of global society.
And herein lies the problem with planned economy. Such proportional
global distribution is a computationally intractable problem. No planned economy can even approach the right 'quantitatively proportional distribution' except by dumb luck, and then only for a brief moment. Market, which effects such proportionality as an emergent feature of local economic transactions, does a much better job.
4.The labour process preserves value in and adds value to the commodities it creates.
5.The need for the proportional distribution of social labour is axiomatic. No form of social production, therefore, negates this need—it only changes the manner of its appearance (mode).
6.Thus, value is created and needs fulfilled by labour (the level of activity in labour-power), and not by “the laws” of supply/demand that conceal the nature of this relationship between man and nature and man and his fellow man.
That they 'conceal' (i.e.
abstract away) the nature of this relationship, is a feature, not a bug -- and it's exactly the feature which renders labor theory of value utter claptrap.
how do you determine the
value of a pair of boots? By counting in the price of added labor? But what if the boots are, say, way fancier than anyone really needs? or not fancy enough?
How do you determine the needs to which the labor must be proportional?
A free market economy determines those needs by essentially asking people. Prices are information. People signal their needs with their buying decisions, and the interaction between demand and supply is exactly how those needs are met in a 'proportional' manner. The law of supply and demand, girlie, is not a law of
objective value of goods, it's simply a comprehension of the
subjective valuation by people. Supply/demand is how we figure out the needs; the question of whether a given labor is needful is thus answered by comparing the supply function (which includes the cost of labor, that itself being a dynamic variable) with the demand curve (which is specified by the needs of the people). Consumers decide how much they are willing to pay, workers decide how much pay they will accept, firms decide how to meet the two up, and from the interaction of all three the valuation is born.
Labor theory of value talks about having labor be proportional to need; and if we could simply
know the need, then we could calculate the added value of labor as the difference between needs and raw input costs, and proclaim that the value of the product is the value of materials plus the added value of labor, AKA 'what the people need' -- and the valuation we would arrive at would be quite similar to the prices set by supply and demand; except that
where marxism talks about knowing these needs (as if we could just wave a wand and know what everyone needs), free market, with
the law of supply and demand, already solved this problem.
In talking about labor theory of value, you are putting the cart before the horse. The real trick is not in determining how much work is worth (worth is subjective and contextual, the labor value is a dependent variable in this system). The bigger trick is in determining what it is the people actually need, and then in allocating labor in such a way as to maximize the gain from utilizing it (it's a bigger trick because human needs are much more variable and thus harder to valuate that human labor, the latter being largely a function of time, skill, and pain). The value of labor is then determined by just how much gain we could capture through this arbitrage. The value of labor is not an independent variable!
What the law of supply/demand embodies then, little girl, is arbitrage -- arbitrage of labor and human needs and wants. Labor theory of value, by trying to start with figuring out the worth of labor, is naive, puerile, and simplistic. It concentrates on a relatively simple component of the system, sweeps the more difficult-to-quantify component under the rug, and ignores the dynamic relationship between them altogether.
Value is the artifact of interaction between needs and costs, between demand and supply; and the latter two are mutually dependent as well. To try to treat needs and labor costs as independent variables is like trying to solve a
three-body problem by ignoring the chaotic feedback effects of the three-body interaction.
Labor theory of value approaches the economy with insufficient information in hand. Economy is a dynamic feedback system which must be considered as a whole system, in situ so to speak. Labor theory of value is born of the naively mechanistic 19th century when people didn't understand things like chaos theory and game theory.
There’s MUCH more on just this, which I’ll edit in later or add in response to you as appropriate (whichever occurs first), but you can make a start on that.
You wasted half of that list. You already missed the key concept -- the nature of value as a dynamic variable, the entanglements of needs and costs, wants and labor -- before you reached midpoint.
The problem with labor theory of value is not even so much that it gives wrong answers; it's that it doesn't even ask the right questions. The marxist approach
cannot result in efficient production, because it's ignoring the dynamic signal interaction of the supply and demand -- the needs signals sent by consumers' consumption choices, the labor signals sent by workers' employment choices, and the costs signals sent by the producers' production choices. Any efficient economy must juggle those pairs-of-pairs (supply/demand relationship between consumer and firm, and supply/demand relationship between worker and firm) -- or rather, a huge interconnected web of such pair. it is a problem which cannot be solved globally, and a problem which cannot be solved by ignoring the dynamic nature of the supply/demand interaction.
Labor theory of value is based on not recognizing that many real-world systems are dynamic and holistic, that you cannot simply decompose them to constituent parts and still have them function. it's like quantum mechanics, where the act of observation affects the system being observed -- the subject and object are entangled, and cannot be understood in separation from each other, but rather only as a whole dynamic system.
I had written a bit about this problem a few months ago. Such naively mechanistic thinking plagues many fields, especially scientifically illiterate losers like you, because it is
science which gives us the strongest and most persuasive evidence of the fundamental inadequacy of such an approach -- in quantum mechanics and evolution, for example.
Read that post of mine. it's fairly short, but it discusses the same problem (unjustified assumption of modularity and decomposability) in a completely different field, evolutionary biology, and then tries to apply that lesson to epistemology in general. It's the same lesson I mentioned higher up as being derived from quantum mechanics. Perhaps, taken apart from marxism, you might be able to understand the problem.
As you can see, dear, the fundamental problem here is dispositional. Bad philosophy leads to the problem being approached in a fundamentally counterproductive way, of course producing fundamentally useless theories which completely miss the nature of economic interaction.