The law of value in the simplest terms...

Would I lose all credibility if I said "how natural something is"....

On this issue of private labour in chapter one and what is or isn’t etc

Perhaps it might be useful to dip into the first version of chapter one?

Marx 1867 (Capital)
The Commodity

This is an English translation by Albert Dragstedt of the first chapter of the first German edition of Capital.

Modern editions of Capital have a first chapter based on the second or subsequent editions.

Source: Albert Dragstedt, Value: Studies By Karl Marx, New Park Publications, London, 1976, pp. 7-40.
Transcribed: by Steve Palmer.

https://www.marxists.org/archive/marx/works/1867-c1/commodity.htm

What is he saying here?????????

Is private labour associated with, or a category of some, “primordial division of labour”?

Can capitalism and wage labour be part of a primordial division of labour?

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Re general linguistics (not my bag at all), contents and form, and sets and subsets etc.

I think you start with a category or set like ‘wine’.

And, in English, when one sub-divide it into sub-sets one normally attaches a qualitative word in front of it thus;

Red wine

And

White wine

And thus Red wine and white wine become mutually exclusive and ‘contradictory forms’ of each other?

Although in Latin Linnaean taxonomy the qulaifying statement comes after.

Eg Homo as the genus of a species Homo sapiens; homo being a genus and a class of things which have common characteristics and which can be divided into subordinate kinds.

From that and just following normal and standard procedures of classification; one should expect that private labour and wage labour are mutually exclusive sub categories of labour?

So actually we could speculate about adding certain other sub categories of labour, depending on the classification procedure you are using I suppose.

Eg communist labour and slave labour?

If private labour was essentially artisan (self employment) as opposed to wage labour.

I think at least, ‘artisan’ commodity production would be consistent with primordial division of labour?

That is if you believe artisan, and dare I say it simple commodity production, preceded capitalist production.

OK so I am on my own now; no matter.

I suppose I could ask the question of myself why private labour and where Karl got it from?

I would suggest to myself that he got it from John Locke which fed somewhat into Hegel; buts lets stay away from Hegel.

Locke is quite interesting and readable anyway.

Second Treatise of Civil Government John Locke (1690)
CHAP. V. Of Property.

https://www.marxists.org/reference/subject/politics/locke/ch05.htm

Karl Marx (The Poverty of Philosophy, 1847):

"It is important to emphasise the point that what determines value is not the time taken to produce a thing, but the minimum time it could possibly be produced in, and the minimum is ascertained by competition. Suppose for a moment that there is no more competition and consequently no longer any means to ascertain the minimum of labour necessary for the production of a commodity; what will happen? It will suffice to spend six hours’ work on the production of an object, in order to have the right [...] to demand in exchange six times as much as the one who has taken only one hour to produce the same object. "

"Every new invention that enables the production in one hour of that which has hitherto been produced in two hours depreciates all similar products on the market. Competition forces the producer to sell the product of two hours as cheaply as the product of one hour. Competition carries into effect the law according to which the relative value of a product is determined by the labour time needed to produce it. Labour time serving as the measure of marketable value becomes in this way the law of the continual depreciation of labour. We will say more. There will be depreciation not only of the commodities brought into the market, but also of the instrumentsof production and of whole plants."

"It is not the sale of a given product at the price of its cost of production that constitutes the “proportional relation” of supply to demand, or the proportional quota of this product relatively to the sum total of production; it is the variations in supply and demand that show the producer what amount of a given commodity he must produce in order to receive in exchange at least the cost of
production. And as these variations are continually occurring, there is also a continual movement of withdrawal and application of capital in the different branches of industry. "

"In a future society, in which class antagonism will have ceased, in which there will no longer be any classes, use will no longer be determined by the minimum time of production; but the time of production devoted to different articles will be determined by the degree of their social utility."

http://libcom.org/library/law-value-series

I'm completely new to this. My head is spinning from the series linked to by vincent. I need to read more. Can anyone recommend another introductory text?

S. Artesian quotes Marx earlier in this thread:

Whatever the manner in which the prices of various commodities are first mutually fixed or regulated, their movements are always governed by the law of value. If the labour-time required for their production happens to shrink, prices fall; if it increases, prices rise, provided other conditions remain the same.

I can see the price drop is a consequence of asserting that 'only labour adds value'. And I presume what this describes is what actually happens in real life. But how does the SNLT move the price?

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I like Isaak Illyich Rubin's definition -

SNLT is referred to by Marx specifically as the "magnitude" or "content" of value. The "form" of value is more abstract - the material expression of productive relations among people, specifically labor or products of labor which are exchanged; bourgeois society specifically is dominated by exchange and value. Wealth in bourgeois societies takes the form of value whereas wealth in previous modes of production did not.

The law of value is the regulating mechanism of capitalism. In capitalist societies society is based on production for exchange and thus based on buying and selling on the market and producing things to buy and sell. Every institution in capitalist society is thus subordinated to the will of the market, even institutions that are seen to be outside of the capitalist sphere such as the state, churches, and social clubs. This is the law of value.

In the law of value series it says:

What is meant by the tension between use and exchange values? Is it simply that wealth accumulation (and thus social tensions) will always arise alongside exchange values?

"use- value" refers to how useful an object is; you could say it's subjectively determined. "exchange - value" refers to the LTV; how the commodity relates to other commodities on the market. it's often just called "value". twenty linens exchanged for two coats, to use marx's example.

the usefulness of an object does not necessarily correspond to what value it has - diamonds are not very useful, but have a very large value. using marx's examples, water is the most useful thing on the planet, but it has a very low value.

If I can make a bicycle in one day and you can make a car in one week, would you let me trade my bicycle for your car? I mean one bicycle for one car. That's the simplest I can explain the law of value.

As far as I am aware, the term "law of value" was first used by Proudhon in System of Economic Contradictions -- he coined the term to describe how market value was regulated by cost of production. Marx probably picked it up there -- like his theory of exploitation, amongst other things (see my review of The Poverty of Philosophy).

As to what it means, I discuss it in this unfinished appendix to An Anarchist FAQ (saying that, probably wise for me to reread and revise this as it was written a while ago).

Also, read Ricardo's Principles of Political Economy and Taxation as he explains it much better than Marx did. Proudhon's account is more concerned with discussing the contradictions within supply and demand but his constituted value explains how market price is regulated by cost (ultimately labour) and this was “the centre around which useful and exchangeable value oscillate”, the “absolute, unchangeable law which regulates economic disturbances” for “whoever says oscillation necessarily supposes a mean direction toward which value’s centre of gravity continually tends”. (Système I: 62, 23) This was inherently dynamic:

From this it is clear that Marx's notion that Proudhon advocated labour-notes is just a lie -- like most of his book against Proudhon.

To explain it to someone who is steeped in the neo-classical nonsense they teach in school.

When demand matches supply, the price will generally be relative to the socially necessary labor time.

It's not opposed to the "subjective" value theory, or addresses a seperate question.

The "subjective" value theory does what neo-liberal idiots always do with Marx, they mis-represent him and then ignore the issue he was addressing and answer a different question. I'm not a Marxist, but I'm sick of him being slandered by neo-liberal idiots who seem to not be able to read when they look at Marx.

Anarcho, where is the passage where Marx argues that Proudhon advocates for labor notes?

Why should a recognition that the quantity of labor socially imbued in a commodity negate the advocacy of labor notes? The idea behind labor notes as I understand it is to lift the veil of mysticism in price; because while prices are *regulated* by the quantity of socially necessary labor time, they incorporate also enough value which is yielded to the capitalists as profits.

Because labor notes are supposed to express things purely in terms of labor hours, and capitalists don't perform labor, this is mean to reveal the graft of every capitalist everywhere; that it costs 2000 labor hours, say, to make a care, and yet we pay 6000 labor hours worth of money, etc.

Presuming we now have enough in previous posts to assume that the law of value, or the labor theory of value, has been sufficiently explained, on one level at least, is it now worth asking what underlies the theory and what the theory might be useful for?

Is the theory, for example, based on the prevalent materialist view of the time (and ours) that ‘Man [sic] is the tool-making animal’, etc? Something expressed perfectly by Marx (though it is fair to point to inconsistencies elsewhere in his writing that may show he was not entirely certain about this) when he wrote in Capital 1:

Which has been explained by Hannah Arendt, in The Human Condition, in this way:

So, does the theory rest on a presumption about humankind’s (voluntary) capacity for labor as the demarcation line between it and other ‘animals’, as opposed to, say, the capacity for ‘reason’?

If so, then what implications might this have for the understanding of ‘use-value’ and, indeed, communism?

Secondly, what use is the labor theory of value to us? That is, to revolts and pro-revolutionary groups and individuals?

Go!

Some thoughts/side notes on this:
I'd say, it's a theoretical phrase which aims to make visible some of the processes which undermine capitalist social relations in the long run, and which are the result of their own operation. The law of value assists in demonstrating how socially necessary labour is progressively reduced, which on the one hand serves the capitalist appropriation of surplus labour (in the form of profit/accumulation), but which may also serve the future radical reduction of work time, and the alternative uses of time, in a society beyond capitalist relations.

So rather than a deterministic view of the law of value (inexorable Law! it always applies!), it's an inexorable law of capitalist development which shows how the capitalist social form is undermined by capitalist development itself. The point is that it reveals the long term weakness and the possible strategic points of attack for working class action, and suggests what it means to go beyond capitalism, both in terms of the requirements of doing so, and in its possibilities.

In a book by Negri I found a quote somewhere, ascribed to Marx, about the suppression of private property as only being possible as the suppression of work.

But I think what Tom Henry quotes in the post above, saying that labor is “the everlasting nature-imposed condition of human existence”, is only true for Marx if you understand labor as "practical-critical, sensuous activity" etc. and not the image we have of it, capitalist work or any activity which revolves around commodity production. Capitalist work does not exhaust the definition of labour, in the anthropological sense, very far from it. Marx's results are also different from his presuppositions, which are the starting point of his investigation, and a lot of which he demonstrates to be stuff that gets uprooted by the historical process itself. "The everlasting nature-imposed condition" undergoes a tremendous abstraction and transformation, where the individual worker is first stripped of the property of the conditions of it, the ownership of tools, rights to land etc, and subsequently (by capitalist development) of the recognizable substance of work "as it was before", and so on, so the nature-imposed condition is gradually turned into a fully social form of alienated activity, which makes sense to itself, but where each worker does only tiny parts of work in a very elaborate social division of labour, which has very little to do with the starting point, and thus also with the starting point which capitalism historically proceeds from (the labour process which it appropriates).

Marx' wasn't too concerned about demonstrating the perpetuity of anything, least of all the things which are in the end only observable patterns of the functioning of capitalism.

In his analysis, everything is liable to get uprooted by a process which doesn't respect its own presuppositions, even though it departs from them. That such presuppositions would survive the process is something to be demonstrated rather than assumed.

I would think it only makes sense to talk about "the law of value" in such a context, to describe the whole process, to point to patterns in it, and not as "a single, succinctly definable rule" which is for ever valid (ie. as something unhistorical), and which could somehow survive the process of undermining/uprooting of its own preconditions which was how Marx saw capitalism.

The theory of value is not a theory of prices. It might have started that way, but it certainly wasn't for Marx by the time that Capital was published. Assuming a constant rate of surplus-value, if the labour theory of value were adequate to explain market prices, we would expect to see capitals with lower organic compositions extract higher rates of profit, and vice versa. But in reality, competition tends towards the establishment of an average rate of profit, because capital migrates from industries with lower profits to those with higher ones, until the diminishing of supply in the former and the increase of supply in the latter balances out. Prices then don't fluctuate around their actual values, but around the commodity's cost of production (it's 'cost-price') plus the average rate of profit.

Of course, since value is the means by which social labour announces itself as such within a system of production dominated by private enterprises (Marx notes at one point in 'A Contribution to the Critique of Political Economy', that to speak of labour as the substance of value is really an obvious tautology), and since the source of the total surplus-value is always the exploitation of labour (and this mass of surplus-value governs the rate of profit), value relations always lie behind the surface phenomena of prices and govern their movements. But it would be an economic absurdity to directly stamp every commodity with the quantity of social labour it embodies. In practice, this would have to mean that the social relations of capitalism and commodity production have already been abolished.

Someone asked what the relevance of value theory is to revolutionary political activity. The theory of value is the source of Marx's analysis of how capital accumulates, and how it always comes up against barriers to it's accumulation. These barriers to accumulation manifest themselves in crises, which demonstrate in practice the contradictions of the system and open up the door to revolutionary transformation.

Yes and no. Yes, the LTV does rest on a line of demarcation between the activity of human beings and animals and it's the capacity for labour that is that line. While Marx doesn't refer to reason as such, it's pretty clear that that is one of the qualities he find uniquely human, though he refers to creativity and imagination explicitly and indirectly human beings' capacity for symbolic, abstract thought. This argument is best captured in the 1844 Manuscripts and in the famous bees and architects passage in Capital Vol. 1

(please note that Fowkes translates this better than the one above by Moore and Aveling)

Nothing and everything. I think specious replied pretty well, but I will give a short answer. The LTV is of use to use because it tells us how capitalist society is organized around the production and circulation of value, and that this is what is actually enslaving us. As such, the LTV tells us more about what we don't want in a communist society and hence also what we should struggle for and against. Hence, on the basis of the LTV you would not push co-operatives as the solution to get out of capitalism. But the LTV, like Marx's analysis of the capitalist MoP, helps us analyze capitalist society and understand how it functions. But the LTV is really shit to use for purposes of, say, political agitation. If you're on the picket lines, people would be looking at you like you're mad if you talk about how the capitalist are just exploiting us for surplus-value rather than just saying that bosses are fuckers that squeeze us so thin that it's hard to put food on the table.

When comes a threat that something you have work hard for will be taken away from you, what will your reaction be? If you get mad or sad, the labor theory of value applies.

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Thanks for the thoughtful responses, I am chewing them over.

At the moment I have two questions.

I think the two quotes below express/summarize what everyone has said here.

Zanthorus wrote:

What does this mean? It is well-known that economic and political crises open the door to radical social alternatives. What does the labor theory of value have to do with that, apart from being a term revealing the reasons for the predilection of capitalism to experience crisis? How is it useful, apart from, as Khawaga writes:

(I am reminded of something from Emil Cioran here, which I read the other day: "Our chief grievance against knowledge is that it has not helped us to live." And it makes me wonder if Marx really did, as he hoped to, give us the tools to transcend philosophy,make it useful, and change the world.)

And S. Artesian wrote:

What does this mean? Does it mean that we can read the revolution (the 'abolition of wage-labor' - my italics) as inevitable through the law of value (whether we understand it or not)? Or does it mean that the law of value just shows those who understand it that revolution [an end to all oppression] is, as you say, 'necessary'?

I'm not sure exactly what you want, a handbook to specific forms of political activism guaranteed to lead to the end of capitalism? Such a thing in general isn't possible. It would be absurd to ask it of any social theory, not just value theory in particular.

Capital allows a much greater understanding of capitalist phenomena, and the concept of value is the bed rock upon which that understanding rests.

reading analyses of the way capital is going, of social phenomena, is something which is much easier with terms like "organic composition of capital," "declining rate of profit," or "fetishized relations" already understood and not needing explanation.

The meaning cannot be extracted separate from the previous statements: that the law of value is the product of a social relation, a specific organization of labor power. Then, the functioning of the law of value expresses the way capital accumulates value, and the limits to that accumulation. Those limits are questions of class struggle. The limits become the necessity for the overthrow of the mode of production and is internal to the basis for accumulation.

The conflict between the labor process and the valorization process becomes manifest, acute, critical.

Short version, paraphrasing Marx: "Economics is shit."

What's the political use of the "law value"?

I don't think capitalist crisis by itself enlightens anyone, or else Marx wouldn't have worked so hard to make the complicated interplay of forces intelligible. Neither do I think that economics is pure ideology, and I doubt Marx did, or he wouldn't have built upon so much of the political economy that came before. I'm not sure if that's quite what others are saying. There is a sort of retreat by some on the left these days from the political prescriptions of Marx and Engels.

The point of Marx's value theory as I've understood it is that it argues that human working relations take different social forms in different societies, as a function of the level of technology and class struggle. Working from that assumption, Marx argues that human labor takes the form of "value" in capitalist society. What does that mean?

The short answer is that it means the labor-time plays a role in regulating price (of course not one to one). Why does it do this and how?

As others have pointed out the process of production in capitalism is based on individual companies who produce a good to be sold for money. The money is then given to each contributor to production; the worker, the landlord, the capitalist, the financier. Each is free to switch jobs at will. None produce their own necessities. Marx argues that the workers are the only group that actually *produces* the physical goods or services. The other three simply take a portion of the product via political-legal justification.

However, I must be very clear: there is a distinction between the physical product and the *value*. Value is a representation of the labor that it took to produce a quantity of product. By this means, capitalists, landlords, financiers are able to pay workers enough *value* for the workers to purchase necessities. But the workers always produce *more than they need*. How? Because the *value* or worth of labor-power is less than the value that labor-power produces. This is a fancy way of saying that a human can produce more than they need for themselves. How are they forced to do it? By threat of starvation; if you don't work at the rate of 7$ an hour (all the while producing about 21$ of value per hour) then you don't work at all.

This arrangement remains because the capitalist state protects it. And because the working class remains disorganized and uneducated about these particular facts.

The feudal lords were guaranteed the right to appropriate from the serfs and peasants by virtue of their loyalty and service to a king. This was a political-legal arrangement based on particular production relationships.

In capitalism, the capitalist (anybody with enough money) has the right to appropriate the product of workers (those without enough money). That is, the condition of your right to appropriate, to become a member of the ruling class isn't contingent on a king, access to land, etc. but is much wider. It relies only on *money*. Hence the bit about the cash nexus in Marx. Land can be bought, labor can be bought, tools can be bought, etc. During the decline of feudalism, the various rights to the purchase of land, tools, labor evolved and changed according to the struggles of the emerging bourgeois, the peasants, artisans, clergy, etc.

This to me implies the unity between politics, the form of the state (political-legal relations) and production relations (economics). The form of the state reflects the needs of the ruling class in its war against the oppressed and exploited class(es).

Thus, politics is the arena of class struggle, as much as the workplace. The reason that human labor takes the form it does is a result of the current state of the class war; there is the "universal right" (private property) for those with enough money to exploit those without enough money. It's also worth noting that capitalist exploiting workers isn't even the complete picture of the nightmare scenario; they also monopolize control of future investment, and thereby exercise a veto power on what human labor time will be devoted to in the future, which has grave implications for managing ecological collapse/pollution, not to mention quality of life levels of investment and planning regarding the urban/rural divide, healthcare, public transportation, etc.

The "Law of Value" is what Ayn Rand misinterpreted as greed, thus giving her the notion that greed is human nature where Capitalists saw an opportunity to use this notion and justify their nature.

Thanks again for all these contributions.

But… On several re-readings of this thread I now want to take it back a notch because, for me, the discussion is still too abstract.

What I want to ask now is:

What is the crisis (or crises) that the labor theory of value points to in the development of capitalism, and from exactly where does the crisis originate?

Zanthorus usefully lays out this out in post #50:

So, using this paragraph, we can identify two questions in order to clarify:

1) What is the actual physical basis for how capital accumulates? That is, what is the essential component for capital accumulation in capitalism?

2) What are the actual physical barriers to this accumulation? That is, what are the actual causes of crises? (And which crises are we talking about?)

Not physical - profit isn't a physical thing. It's a social relation dictating the distribution of physical things.

This is a good place to start: https://en.wikipedia.org/wiki/Rate_of_profit

Essentially, there are several factors that contribute to crises in capitalism but they tend to be crises of *overproduction*. This results from the fact that businesses have extremely imperfect information, incentives to pursue short-term profit above most else, and compete with eachother to cut costs. The result is a tendency to overproduce, to drive profit rates down through competition, and to generally overshoot production, investment, etc. as a result of using cut-costs to grab a wider market share.

One of the most important underlying factors to capitalist crisis is that production is separate from distribution; distribution is carried out through the market. Hence, producers are always having to approximate demand, and may well be very wrong.

Perhaps that's still too abstract? In the wiki article linked, the section on the 'prisoner's dilemma' explains the tendency for the rate of profit to fall. Do you see how this would also lead to overproduction?