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Labour theory of value: Difference between revisions
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{{a|devil| | {{a|devil|{{image|Karl Marx|jpg|A fan of hard yakka, yesterday.}}}}:“''The things which have the greatest value in use have frequently little or no value in exchange; and, on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce anything; scarce anything can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.''” | ||
{{image|Karl Marx|jpg|A fan of hard yakka, yesterday.}}}}:“''The things which have the greatest value in use have frequently little or no value in exchange; and, on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce anything; scarce anything can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.''” | |||
::{{author|Adam Smith}} —{{br|The Wealth of Nations}}, Book 1, chapter IV. | ::{{author|Adam Smith}} —{{br|The Wealth of Nations}}, Book 1, chapter IV. | ||
The [[labour theory of value]] (“'''[[LTV]]'''”) argues that the ''economic'' value of a good or service is determined by the total amount of “socially necessary labour” required to produce it. A staple of Marxist theory, the [[LTV]] stands in contrast to the neoclassical model of [[value]] — the one typically subscribed to by venal capitalist running dogs etc., as as articulated by their spiritual Godfather [[Adam Smith]], above — that the value of a good or service is ''whatever someone else is prepared to pay for it''. | The [[labour theory of value]] (“'''[[LTV]]'''”) argues that the ''economic'' value of a good or service is determined by the total amount of “socially necessary labour” required to produce it. A staple of Marxist theory, the [[LTV]] stands in contrast to the neoclassical model of [[value]] — the one typically subscribed to by venal capitalist running dogs etc., as as articulated by their spiritual Godfather [[Adam Smith]], above — that the value of a good or service is ''whatever someone else is prepared to pay for it''. | ||
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This is not to say price and value are independent — that would be too easy. Merchants are greatly assisted by the irrational psychology of scarcity and desirability: some items — paintings, for example — become ''more'' desirable the higher their price. | This is not to say price and value are independent — that would be too easy. Merchants are greatly assisted by the irrational psychology of scarcity and desirability: some items — paintings, for example — become ''more'' desirable the higher their price. | ||
===[[SaaS]] and the [[LTV]]=== | ===[[SaaS]] and the [[LTV]]=== | ||
In any case, [[reg tech]] providers are wont to unexpectedly invoke the [[labour theory of value]] on prospective clients by way of justifying the outrageous rent they propose to extract: “this desultory code, which I commissioned from some java programmer in the Balkans I found on ''UpWork'' and which he knocked together over a weekend, will save you a million dollars a year in legal fees. Therefore you will be thrilled to hear that your licence is only $500,000 per annum, for up to 100 documents per quarter.” | In any case, [[reg tech]] providers are wont to unexpectedly invoke the [[labour theory of value]] on prospective clients by way of justifying the outrageous rent they propose to extract: “this desultory code, which I commissioned from some [[Bulgarian freelance coder|java programmer in the Balkans I found on ''UpWork'']] and which he knocked together over a weekend, will save you a million dollars a year in legal fees. Therefore you will be thrilled to hear that your licence is only $500,000 per annum, for up to 100 documents per quarter.” | ||
===Does the information revolution validate [[LTV]]?=== | ===Does the information revolution validate [[LTV]]?=== | ||
In which [[JC|your correspondent]] no doubt goes over the front of his [[Skiing|ski]]s. But it seems to me, readers, that the information revolution presents our conventional model of value with a problem. For anything that can be automated can be replicated, algorithmatised, reverse-engineered and widely propagated without cost. However good it is, we know it can be generated cheaply, reliably, and non-exclusively. This is anti-scarcity: it necessarily affects our assessment of its value, and in any case where price is the right side of value that is not the end of it: then you must beat your competitors, all of whom have the same technology and the same ability to generate an equivalent product with minimal cost. | In which [[JC|your correspondent]] no doubt goes over the front of his [[Skiing|ski]]s. But it seems to me, readers, that the information revolution presents our conventional model of value with a problem. For anything that can be automated can be replicated, algorithmatised, reverse-engineered and widely propagated without cost. However good it is, we know it can be generated cheaply, reliably, and non-exclusively. This is anti-scarcity: it necessarily affects our assessment of its value, and in any case where price is the right side of value that is not the end of it: then you must beat your competitors, all of whom have the same technology and the same ability to generate an equivalent product with minimal cost. | ||