Labour Theory of Value (LTV):
Non arguments:
>If I dig a hole in my backyard and then fill it in I used labor but made no value! Commies BTFO!
Marx clarified (unlike adam smith) that only socially nessary labor (labor used to produce a commodity with use value) creates value. This is also the case if you spend 1000 years making a bed.
>Nature can create value as well. If an apple falls from a tree then value is created without labor
Marx also noted nature could create value.
>if labor determines price why is coca cola cheaper than bottled water?
Labor doesn't determine price. It determines value (not exchange value or use value) and correlates with the equilibrium price. Supply and demand determine price.
Machines cannot create value. If I make a machine that makes diamonds out of thin air then the value of a diamond falls below that of bricks now that they can be aquired with no work what so ever. Price might not fall because you can still manipulate supply and demand but value certainly does.
Some definitions.
Use value = How useful an object is.
Exchange value = Market value of a commodity. Different from use value. You can sell a beanie baby for 200$ but it is almost completely useless.
Value = the amount of congealed labor withing a commodity.
Some evidence of the LTV
users.wfu.edu
