Hello Mises Community,
This is my first post here and I look forward to receiving some help from so many like minded individuals. I have a question regarding the critique of the Marxian understanding of value. I’ll preface this by stating I’m a student of economics at a university dominated by Marx/Keynes. I first came across Austrian economics by reading Rothbard’s “The Case against the Fed.” Since then I have devoted most of my independent reading time to study Austrian economics. However, since I have no-one in my program to bounce Austrian ideas and concepts off of or who are even remotely familiar with the school it becomes more difficult to fully grasp the concepts. I’m taking a course this semester on Marxian Political Economy and since much of Marx’s theory of ‘surplus value’ rests on his labor theory of value being correct I would like to ask the Mises community to perhaps provide me with a fuller understanding of why Labor as the ultimate source of value is a fallacy.
I understand the basics of subjective theory of value and how it is the individual preferences of consumers that create value and how there can be no inherent value in an object. I also understand that wages are paid for what labor produces not for how long it took to produce a good but when I address some of these basic discrepancies to the class it’s as if I am talking to a brick wall. Setting aside the fact that Capital volumes I-3 are like the holy bible to some of these students it just seems like either I’m missing something or am not articulating this point well enough. I’d be interested to hear some of your perspectives on this issue.
Emerica560: Hello Mises Community, This is my first post here and I look forward to receiving some help from so many like minded individuals. I have a question regarding the critique of the Marxian understanding of value. I’ll preface this by stating I’m a student of economics at a university dominated by Marx/Keynes. I first came across Austrian economics by reading Rothbard’s “The Case against the Fed.” Since then I have devoted most of my independent reading time to study Austrian economics. However, since I have no-one in my program to bounce Austrian ideas and concepts off of or who are even remotely familiar with the school it becomes more difficult to fully grasp the concepts. I’m taking a course this semester on Marxian Political Economy and since much of Marx’s theory of ‘surplus value’ rests on his labor theory of value being correct I would like to ask the Mises community to perhaps provide me with a fuller understanding of why Labor as the ultimate source of value is a fallacy. I understand the basics of subjective theory of value and how it is the individual preferences of consumers that create value and how there can be no inherent value in an object. I also understand that wages are paid for what labor produces not for how long it took to produce a good but when I address some of these basic discrepancies to the class it’s as if I am talking to a brick wall. Setting aside the fact that Capital volumes I-3 are like the holy bible to some of these students it just seems like either I’m missing something or am not articulating this point well enough. I’d be interested to hear some of your perspectives on this issue.
Welcome to the forums. This is definitely a safe-haven for you when it comes to libertarianism and Austrian economics. For a explanation of the Labor Theory of Value, consult David Gordon's Introduction in Economic Reasoning pg 103
'Men do not change, they unmask themselves' - Germaine de Stael
Emerica560: Hello Mises Community,
Hi. :)
Well, the consumers don't "create" value. They evaluate, and discover the value of something to them through that process of evaluation.
It's no surprise it's like you're talking to a brick wall. People start with empty minds. For some people, their empty minds that fill up with stories and close. They don't stay open. The trick is to prop it open, to get them to hold their understanding of their worldview in doubt, just so that they can leave some space to contemplate an alternative. :) On other people, it just might be worthwhile to quit. If a simple, real-world example discrediting Marx' theory of value isn't good enough for these people, what makes you think that anything following logic or real-life example will make them re-think things?
Nice to have your company. Don't mind my Marx beard. I shaved it since. :)
Check out Lilburne's Human Action comics:
Subjective Theory of Value.
Marginal Theory of Value.
List of other available issues...
Wow you shouldn't have to refute the labor theory of value even in a keynesian economics class. I run accross silly marxian theory in my social science electives but marginal utility is pretty much a mainstream economic concept.
Emerica560:I’m taking a course this semester on Marxian Political Economy
Are you reading "capital" as part of the course? If so, then dialogue with the book, imagine yourself talking to marx -what would he think of your objections and what objections could you raise in reply? I find this to be a very effective way to develop arguments for/against a specific idea. It also, I think, aids in the learning process.
Marxism - A Materials List
Send this out to the whole class.. lol.
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It's easy to refute an argument if you first misrepresent it. William Keizer
Conza88: Marxism - A Materials List Send this out to the whole class.. lol.
*Pirate Laugh* HA HA!
Thanks for the warm welcome and the quick responses to my post its been very helpful so far. Here's something I meant to mention along in the post. Marx argues in Capital volume I that prices may not reflect the labor that went into them and therefore misrepresent their true value but he argued that in the long run it was the "tendency law" for prices to come back and reflect the labor cost. This to him was "accidental" now that answer has never proven very convincing because it seems like with that theory he could pick virtually any variable that he wanted to attribute to giving a commodity value like for instance the weight of the object. Am I right in this criticism? (Remember I am not a marxist in the least I'm merely taking a class on his political schema!)
Emerica560: Am I right in this criticism?
The way I see it: Marx can prove his point in one of three ways.
1] He can state the obvious, that everyone will agree to once it is pointed out to them, because it makes so much sense. Dunno if this tendency law is so obvious. Quite the contrary. When you are looking at a used car, do you think "Lemme see, how much labor went into this thing?"
2] He can begin with an obvious statement , and by the universally recognized laws of logic, deduce his conclusions. I doubt this is what he's doing , because Marx is supposed to have rejected logical thinking as being beurgosie, meaning only thought of as true by capitalists.
3] He can show you statistics. I doubt he did this, because the statistics don't exist.
So what is he really up to? He picks labor as what determines price, because it is vital for his argument later [the workers are being ripped off, because they put in the labor]. Then, as a cover up for this flying in the face of reality, he makes up a fictitious "tendency law".
So if you mean he could have used this fictitious cover up to attribute the price of an object to be determined by its weight, or by it's page in a french dictionary, yes he could.