Editing Labor theory of value (section)

{{Short description|Economic hypothesis}}
{{Use American English|date=March 2021}}
{{Use mdy dates|date=March 2021}}
{{Marxian economics|sp=us}}
The '''labor theory of value''' ('''LTV''') is a [[theory of value (economics)|theory of value]] that argues that the [[exchange value]] of a good or service is determined by the total amount of "[[Socially necessary labour time|socially necessary labor]]" required to produce it. The contrasting system is typically known as the [[subjective theory of value]].

The LTV is usually associated with [[Marxian economics]], although it originally appeared in the theories of earlier [[classical economics|classical economists]] such as [[Adam Smith]] and [[David Ricardo]], and later in [[anarchist economics]]. Smith saw the price of a commodity as a reflection of how much labour it can "save" the purchaser. The LTV is central to Marxist theory, which holds that capitalists' expropriation of the [[surplus value]] produced by the [[working class]] is [[Exploitation of labour|exploitative]]. Modern [[mainstream economics]] rejects the LTV and uses a theory of value based on subjective [[Preference (economics)|preferences]].<ref>{{Cite web |url=https://plato.stanford.edu/archives/sum2018/entries/preferences/ |title=Preferences |date=November 14, 2017 |access-date=November 21, 2020 |website=[[The Stanford Encyclopedia of Philosophy]] (Summer 2018 Edition) |last1=Hansson |first1=Sven Ove |last2=Grüne-Yanoff |first2=Till |editor-last=Zalta |editor-first=Edward N.}}</ref><ref>{{Cite book |title=The Common Sense of Political Economy, Including a Study of the Human Basis of Economic Law |last=Wicksteed |first=Philip H. |publisher=[[Macmillan and Co.]] |year=1910 |location=London |url=https://oll.libertyfund.org/titles/wicksteed-the-commonsense-of-political-economy |url-status=live |author-link=Philip Wicksteed |archive-url=https://web.archive.org/web/20201020224441/https://oll.libertyfund.org/titles/wicksteed-the-commonsense-of-political-economy |archive-date=October 20, 2020}}</ref><ref>{{Cite book |last1=Hunt |first1=E. K. |title=History of economic thought l: a critical perspective |date=2011 |publisher=[[M. E. Sharpe]] |last2=Lautzenheiser |first2=Mark |isbn=978-1-317-46859-2 |edition=3rd |location=Armonk, New York |oclc=903283190}}</ref>