[jswinghammer]

Even if you concede all those points (which I won't) the entire Marxist system relies on the labor theory of value which was smashed by Eugen Böhm von Bawerk in his book "Karl Marx and the Close of His System". No one has really bothered to follow up on it since it was so definitive.

That his theory lives on is a testament to the degree to which people a.) never learn anything ever and b.) the intoxicating nature of what he proposes.

[vidarh]

(EDIT: Perhaps the downvoter would care to give a counter-argument for why the LTV is a pre-requisite for Marx political ideology?)

I don't see what it is you believe relies on the labor theory of value.

Marx theories span a wide range, but certainly his political ideology did not in any way rely on the labor theory of value to underpin it, and it is something most people advocating Marxism don't even know or understand very well.

What it does rely on is whether Marx hypothesis that capitalism will necessarily self destruct as it reaches the limits of market expansion is correct (no more people living out of reach of capitalist competition). Marx expected this to happen by forcing capitalists into ever harsher competition and automation at the cost of starting to throw workers back into poverty and as a result pulling the rug out under their own markets, eventually leading to sufficient social upheaval to drive the working classes to revolution.

It further relies on Marx hypothesis that upon the self destruction of capitalism, that the working classes can end the class struggle by seizing control and redistributing wealth and the control of the means of production.

The LTV is used by Marx as justification for why some of this is "right", but at the same time Marx theories on the political and economic development of society does not rest on right and wrong, but on how the self-interests of the members of the various classes affects society as the economic development alters the relative powers of these classes.

There are plenty things that can be wrong in these theories, but whether or not the LTV is right or not is an entirely orthogonal issue.

[jswinghammer]

I'll try to summarize why the LTV is so intrinsic to Marxist analysis. Marx's basic argument in Capital is that labor is what creates value in capital goods. The argument goes like this: if no labor is added to capital goods they eventually rot and become worthless and cease to be a capital good at all. Thus labor is at the heart of what drives value because what gives something value is labor time stored within it. This is at the heart of the exploitation of the workers because the capitalist gets this return without having spent any of their own time to build and develop the capital and they pay less than the value of the capital goods to the workers who made the goods in the first place.

Understanding the employee/employer relationship is at heart of understanding capital and the returns capital receive over time. The employee is paid in advance of sales (most of the time) and thus the employer shoulders the risk of those sales never materializing in the first place. To compensate employers for that risk, employees are paid less than the full output of their labor. As we know wages are not taken back if the product or service they were developing was never sold. It's a mutually beneficial relationship that explains profits in a way that does not involve exploitation but rather mutually beneficial exchange.

If there is no exploitation you don't have Marxism in the first place. This is a very basic summary of "Karl Marx and the Close of His System".

[cynicalkane]

> Marx expected this to happen by forcing capitalists into ever harsher competition and automation at the cost of starting to throw workers back into poverty

His analysis of this in Capital uses the LTV as a base assumption. Under the LTV, capital profit is "surplus value" that is driven down by competition, and capitalists cannot exist as a social class once their surplus value fails to exceed their personal labor cost. Marx was very proud of this claim, and bragged in a letter to Engels that he had "proven" this historical inevitability.

Like most economic models, they cease to be correct when the premises fail.

[asgard1024]

> the entire Marxist system relies on the labor theory of value

I am no expert in Marx, so I cannot say that's invalid statement, but I do consider labor theory of value wrong and I agree with many of Marxs' views.

Interestingly though, the idea of meritocracy relies on labor theory of value as well. (As someone else above noted: "A large part of the problem for the working classes, according to Marx, is that they buy into the capitalist idea that people are paid what they deserve, rather than what the capitalist can get away with.")

If you believe that capital, or machines, or biological systems, or historical experience, do create value, and not all value comes from the human work, how are you going to split the extra value? Machines don't need it. Anyway you split it, it's not meritocratic, because merit is measured in work.

For example, if I automate something (let's say by happy accident), then I am doing less work now and should deserve less than my previous me, yet at the same time, more value is produced. Meritocracy fails to reconcile this difference unless you ascribe all value that is produced to human labor.

[jswinghammer]

The basic criticism of the labor theory is that it does not explain all things humans value. Adam Smith discussed this when noticing that water however useful it is for keeping humans alive, it's priced in accordance with its' use.

There isn't necessarily any connection between labor and the things people value. For example, the work that goes into designer purses is often the same as the cheap purses at Walmart or whatever but the former could sell for multiples of the cost of the latter.

In a meritocracy, a contributor is paid in relation to doing the work that their team values most. It could be the case that what they do has no direct connection to their labor performed but rather could involve doing very little work that no one else wants to do (or can do). The business values that labor very highly even if it's in very small chunks.