Econ 305: Marxian Economics
Response Paper 2
Due: March 9th, 2013
Labor Theory of Value
Value is a term in which can be looked at and defined in multiple ways. However, the views of Marxian take both the term commodity, labor, and value and combine it into his Labor Theory of Value. With these terms and actions between laborers created surplus also relates to capitalism, and the origin of surplus in general. Sweezy defines a commodity as “something produced for exchange rather than use for producer”(Sweezy, 23). In Marx’s view regarding the qualitative-value problem, “every commodity has a two-fold aspect, that of use value and exchange value” (Sweezy, 26). Both these aspects focus on labor as a substance of value, including the use of the actually value and the commodity that this value actually produces. For example, the labor time used to create a coat involves stitching, weaving and putting the coat together is completely different than the value of the actual value of the coat produced. In words of Marx, “value is created by the expenditure of abstract, simple, socially necessary labor time” (LTV3, slide 5). The labor hours used to create the commodity is the use of labor value, while the actual coat is the commodity value. Without the use of labor value, there can be no commodity created.
There are two crucial ways in which Marx views the Labor Theory of Value compared to those of other classical economists. First, the Labor Theory of Value operates on an aggregate level, and not at a level of individual commodities. This leads into the second way in which Marx views the theory, meaning that the value is created by the aggregation of the expenditure of abstract, simple, and socially necessary labor time. Therefore, Marx views value not as an ethical category, but an economic category instead, meaning that the overall view of value is expressed in terms of money. Just like value, money can also be viewed in terms as both...