Editing Labor theory of value (section)

=== Karl Marx<!--'Marx's theory of value', 'Marxian theory of value' and 'Marxist theory of value' redirect here--> ===
Contrary to popular belief, Marx never used the term "labor theory of value" in any of his works, but used the term [[law of value]];<ref>cf [[E F Schumacher]],''[[Small Is Beautiful]]'', Pt 1, ch 1. Mike Beggs, "Zombie Marx and Modern Economics, or How I Learned to Stop Worrying and Forget the Transformation Problem." ''Journal of Australian Political Economy'', issue 70, Summer 2012/13, p. 16 [http://australianpe.wix.com/japehome#!current/c1cok]</ref><ref>{{cite journal |last1=Mongiovi |first1=Gary |title=Vulgar economy in Marxian garb: a critique of Temporal Single System Marxism |journal=Review of Radical Political Economics |date=September 2002 |volume=34 |issue=4 |pages=393–416 |doi=10.1016/S0486-6134(02)00176-6 }}</ref><ref>{{cite journal |last1=Beggs |first1=Mike |title=Zombie Marx and modern economics, or how i learned to stop worrying and forget the transformation problem |journal=The Journal of Australian Political Economy |date=8 November 2020 |issue=70 |pages=11–24 |id={{Gale|A318902338}} {{ProQuest|1274649717}} |url=https://search.informit.org/doi/abs/10.3316/INFORMIT.042280767799732 }}</ref> Marx opposed "ascribing a supernatural creative power to labor", arguing as such:
<blockquote>Labor is not the source of all wealth. Nature is just as much a source of use values (and it is surely of such that material wealth consists!) as labor, which is itself only the manifestation of a force of nature, human labor power.<ref name="Critique of the Gotha Program">{{cite book |chapter-url=http://www.marxists.org/archive/marx/works/1875/gotha/ch01.htm |title=[[Critique of the Gotha Program]] |chapter=1 |via=[[Marxists Internet Archive]] |first=Karl |last=Marx |author-link=Karl Marx |date=1875}}</ref></blockquote>

Here, Marx was distinguishing between [[exchange value]] (the subject of the LTV) and [[use value]]. Marx used the concept of "[[socially necessary labor time]]" to introduce a social perspective distinct from his predecessors and [[neoclassical economics]]. Whereas most economists start with the individual's perspective, Marx started with the perspective of society ''as a whole''. "Social production" involves a complicated and interconnected [[division of labor]] of a wide variety of people who depend on each other for their survival and prosperity. [[Abstract labor and concrete labor|"Abstract" labor]] refers to a characteristic of [[commodity]]-producing labor that is shared by all different kinds of heterogeneous (concrete) types of labor. That is, the concept abstracts from the ''particular'' characteristics of all of the labor and is akin to average labor.

"Socially necessary" labor refers to the quantity required to produce a commodity "in a given state of society, under certain social average conditions or production, with a given social average intensity, and average skill of the labor employed."<ref name="marxprofit" /> That is, the value of a product is determined more by societal standards than by individual conditions. This explains why technological breakthroughs lower the price of commodities and put less advanced producers out of business. Finally, it is not labor per se that creates value, but labor power sold by free wage workers to capitalists. Another distinction is between [[productive and unproductive labor]]. Only wage workers of productive sectors of the economy produce value.<ref group=note>For the difference between wage workers and working animals or [[slave]]s confer: John R. Bell: Capitalism and the Dialectic – The Uno-Sekine Approach to Marxian Political Economy, p. 45. London, Pluto Press 2009</ref> According to Marx an increase in productiveness of the laborer does not affect the value of a commodity, but rather, increases the surplus value realized by the capitalist.<ref>If therefore, the capitalist who applies the new method, sells his commodity at its social value of one shilling, he sells it for threepence above its individual value, and thus realises an extra surplus-value of threepence. On the other hand, the working day of 12 hours is, as regards him, now represented by 24 articles instead of 12. Hence, in order to get rid of the product of one working day, the demand must be double what it was, i.e., the market must become twice as extensive. (Marx et al., 1974)</ref> Therefore, decreasing the cost of production does not decrease the value of a commodity, but allows the capitalist to produce more and increases the opportunity to earn a greater profit or surplus value, as long as there is demand for the additional units of production.