Talk:Labor theory of value

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Archives Talk:Labor theory of value/archive1: June 2004 – May 2005

Archives Talk:Labor theory of value/archive1/archive2: May 2005 – October 2006

Contents 1 some of this reads rather non-neutrally 2 Factual accuracy tag, because "value" does not typically refer to number 3 3 Too Technical 4 Intro (again :-) 5 Value Revisited 6 Confusion with labor theory of price? 7 Intro to be changed...

[edit] some of this reads rather non-neutrally

While large parts of this article are perfectly fine, some of it reads as a persuasive essay, and sounds like it was written by someone defending the labor theory of value. Now of course it shouldn't read like a critique of it either—the reader should not be able to tell just by reading the article what the primary authors of this encyclopedia article think of the labor theory of value. In particular:

• We keep saying "contrary to popular belief", which is odd, because: 1) nowhere is it cited that this is popular belief; and 2) Wikipedia's job is to describe what people think, not to argue novel points ourselves. I think in many cases this sort of construction should simply be removed, but in others, it may be more appropriate to say something like, "many nonspecialists think that foo [CITE], but economists such as Authoritative Source [CITE] generally think bar".
• The "Criticisms" section sounds very defensive. It reads like a cursory introduction of criticisms summarized by someone who disagrees with them, immediately followed by rebuttals.

Thoughts? --Delirium 04:56, 28 October 2006 (UTC)

I would definitely agree with your assessment: particularly those examples you gave. As for the criticisms section, the sad state of that that has been much discussed above. I’d take a stab at it, but I think someone else could do much better than I. I could try to change the tone of those other sections you cite however. There had been some discussion of eliminating the “jusification of the theory” section that I think was added back when the article had the opposite problem: of being simply an uninformed attack. --Cplot 22:28, 28 October 2006 (UTC)

I disagree. There's nothing pro-LTV about having a 'Justification' section. We would expect an article on the Flat Earth Theory to have a 'justification' featured pretty prominently! I can't see how you can say that 'Wikipedia's job is to describe what people think'! (I know that's what its critics think!!!) The passage you refer to is clearing up a common misconception, which is accomplished by a relevant quotation from Marx, not the advancement of a 'novel' theory. If you want me to cite examples ad nauseum of this misconception I can certainly do so! The 'Criticism' section is difficult because it inevitably degenerates into point and counterpoint. And, yes, the earlier version of the article was an uninformed attack. At least now the article cites primary sources so the readers can make up their own minds!--Jack Upland 06:52, 7 April 2007 (UTC)

[edit] Factual accuracy tag, because "value" does not typically refer to number 3

The intro is wrong when it says "value" in the labor theory does not typically refer to price or value in exchange. That's exactly what it refers to. It should say number 2 is what it typically refers to. I have plent of sources to prove this, and there are many more where they came from. Some sources follow:

• "The labor theor of value says that, in competitive markets, commodities that can be produced over and over against exchange in the marketplace according to the amount of average quality work time it takes to produce them." (Yates, Michael D. Let's Put the Nature of Work on Labor's Agenda: Part Seven)

• "The LTV is the theory that market prices are attracted by prices proportional to the labor time embodied in commodities. In other words, relative prices tend towards relative labor values." (Vienneau, Robert. Frequently Asked Questions about The Labor Theory of value)

• "The central claim of the labor theory of value is that products exchange in proportion to the amount of labor time required for their replacement." (King, Peter and Ripstein Arthur. Did Marx Hold a Labor Theory of Value?)

• "The labor theory of value states that the market prices of commodities tend to be proportionate to the labor socially necessary to produce them. (Zachariah, Dave. Testing the labor theory of value in Sweden)

• "Marx and Engles subscrived to an economic theory known as the "labor theory of value." When they first began their economic studies, that was the state-of-the-art theory in economics. Not only had the two great economists Adam Smith and David Ricardo developed it, but all other writers on economic matters, among them Benjamin Franklin, had held it. Marx quotes Franklin extensively. In outline, the labor theory of value asserts the following: All commodigies are useful to someone (otherwise they will not sell). They have, in the classical terminology, "use value." But they also exchange with other commodities, The ration in which they exchange with other commodities in called their "exchange value."...The theory further assumes that in most exchanges, equals exchange for equals. In some way a quarter of wheat is equal to x blackling or y silk or z gold..But that raises a further question immediately, namely, in respect to what are a quarter of wheat and the specific quantities of other commodities equal to one another? The classical economic theory answered: with respect to the emobodies labor. The value of a commodity was the labor time embodied in it. Hence the labor time embodied in any given commodity determined the proportion in which this commodity exchanged with others. (Schmitt, Richard. Introduction to Marx and Engels: A Critical Reconstruction. Westview Press (1997), p. 104-105)

• "Adam Smith theorized that the labor theory of value holds true only in the "early and rude state of society" but not in a modern economy where owners of capital are compensated by profit. As a result, "Smith ends up making liteel use of a labor theory of value." (Canterbery, E. Ray, A Brief History of Economics: Artful Approaches to the Dismal Science, World Scientific (2001), pp. 52-53)

• "The classical economists adopted the simplifying assumption of the labor theory of value. This theory asserts that labor is the only factor of production and that in a closed economy the prices of all commodities are determined by their labor content. In particular, since our interest lies mainly in relative as opposed to absolute prices with regard to the pure theory of trade, according to the labor theory of value, goods are exchanged against one another according to the relative amounts of labor they represent." (Chacholiades, Miltiades. The Pure Theory of International Trade, Aldine Transaction (2006), p. 14)

• "Like most of the classical economists, Marx tried to explain price formation by a labor theory of value. The rates at which goods exchange against each other are explained by the amount of labor that has gone into their production." (Elster, Joe. An Introduction to Karl Marx, Cambridge University Press (1986), p. 64)

• "The labor theory of value, for Marx, played a double role - as a theory of exchange and a theory of exploitation. Marx's approach was to use the theory of exchange as a conduit to generate the theory of exploitation. (Roemer, John E. Analytic Foundations of Marxian Economic Theory, Cambridge University Press (1989), p. 52)

• "Marx believed the exchange value of a commodity was determined by the amount of labor time necessary for its production. His theory is therefore usually called the labor theory of value." (Hunt, E. K. Property and Prophets: The Evolution of Economic Institutions and Ideologies, M. E. Sharpe (2002), p. 109)

• "The labor theory of value states that the value or price of a commodity is equal to or can be inferred from the amount of labor time going into the production of the commodity." (Salvatore, Dominick. Schaum's Outline of International Economics (1995), p. 15)

Economizer 02:59, 16 November 2006 (UTC)

I agree with the assertion the criticism of the third definition of value, when Marx speaks of value he means exchange value meaning price. He does not mean the amount of labour contained in a commodity, as that labour may not be useful. A commodity "...has use-value for others; but for himself (the seller) its only direct use-value is that of being a depository of exchange-value, and, consequently, a means of exchange....Hence commodities must be realised as values before they can be realised as use-values....For the labour spent upon them counts effectively, only in so far as it is spent in a form that is useful for others. Whether that labour is useful for others, and its product consequently capable of satisfying the wants of others, can be proved only by the act of exchange." Capital Volume 1 chapter 2 exchange [1]

Therefore I am going to delete the third definition of value, Marx deals with only two definitions in Capital use value and exchange value.(Bill j 20:11, 11 December 2006 (UTC))

Without reading them all I'll just work from the first two - these citations don't seem to disagree with the text as it was, the three versions of value are still working from a basis that prices are in some way proportional to labour input, likewise in the use value/exchange value/ value set this is what happens, with exchange value being a real world mediation and specification of overall value. Anyway, I've qualifed it to make it accurate - hope my change suffices, but I really think you're misreading it and splitting unnecessary hairs here. I'll refer you to Junankar in the references.--Red Deathy 08:15, 16 November 2006 (UTC)

The reality of the value of commodities differs in this respect from Dame Quickly, that we don’t know “where to have it.” The value of commodities is the very opposite of the coarse materiality of their substance, not an atom of matter enters into its composition. Turn and examine a single commodity, by itself, as we will, yet in so far as it remains an object of value, it seems impossible to grasp it. If, however, we bear in mind that the value of commodities has a purely social reality, and that they acquire this reality only in so far as they are expressions or embodiments of one identical social substance, viz., human labour, it follows as a matter of course, that value can only manifest itself in the social relation of commodity to commodity. In fact we started from exchange value, or the exchange relation of commodities, in order to get at the value that lies hidden behind it. We must now return to this form under which value first appeared to us

The elementary form of value of a commodity is contained in the equation, expressing its value relation to another commodity of a different kind, or in its exchange relation to the same. The value of commodity A, is qualitatively expressed, by the fact that commodity B is directly exchangeable with it. Its value is quantitatively expressed by the fact, that a definite quantity of B is exchangeable with a definite quantity of A. In other words, the value of a commodity obtains independent and definite expression, by taking the form of exchange value. When, at the beginning of this chapter, we said, in common parlance, that a commodity is both a use value and an exchange value, we were, accurately speaking, wrong. A commodity is a use value or object of utility, and a value. It manifests itself as this twofold thing, that it is, as soon as its value assumes an independent form – viz., the form of exchange value. It never assumes this form when isolated, but only when placed in a value or exchange relation with another commodity of a different kind. When once we know this, such a mode of expression does no harm; it simply serves as an abbreviation.

[2]--Red Deathy 08:26, 16 November 2006 (UTC)

Economizer is not conducting a discussion. He has repetitively been answered. See, for example, archived discussions around 22 August 2006. 151.190.254.108 12:14, 4 December 2006 (UTC)RLV, 16 November 2006

Economizer is correct. It refers to price. So, why with all these sources was it not mentioned? Even if it referred to price just sometimes, that should still be mentioned.Anarcho-capitalism 06:28, 4 December 2006 (UTC)

Not mentioned? The relationship between value and price is discussed in the article in Section 3, "The Relation Between Values and Prices". (Not that I like the article.) In both Marx and Ricardo, value often refers, not to price, but to something underlying price. The quotes from Red Deathy above document that perspective in Marx. For Ricardo, see http://robertvienneau.blogspot.com/2006/08/value-in-ricardo.html. Smith, Ricardo, J. S. Mill, and Marx, for example, all said that prices do not tend towards proportionality with prices. 151.190.254.108 12:14, 4 December 2006 (UTC)RLV, 4 December 2006

Anarcho-capitalism the problem with Economizer's cites is they don't say what he wants them to say, they are all perfectly consistent with the text as provided, they don't say that value exclusively refers to price or that value cannot refer to something other than price - theya re all perfectly consistent with the text as it is and teh 3 level account. In many accounts of LTV price=value is assumed for convenience and clarity, but usually not understood to be the end of the matter. I disagree, btw, with deleting the footnote, footnotes aren't just for references but for explanations that don't belong in the flow fo the text.--Red Deathy 12:56, 4 December 2006 (UTC)

It's not a matter of the cites saying what they want them to say. I don't want them to say anything in particular. The matter is what they say. They say that "value" refers to price. For example, "The labor theory of value states that the value or price of a commodity is equal to or can be inferred from the amount of labor time going into the production of the commodity." (Salvatore, Dominick. Schaum's Outline of International Economics (1995), p. 15) I think everybody learns this in Economics 101 but whoever is writing this article doesn't seem to be aware of it. And the problem with the footnotes is that they are just footnotes. As Anarcho-capitalism says, they are editorial. That's ok for footnotes, but they're being used as citatations. We have to use external sources for citatations. We can't write our own editorial in a footnote and then use that as a source for what we say in the article. Economizer 21:08, 4 December 2006 (UTC)

The first four of your quotes above do not say that, they merely say price is proportionate to value, not that value refers to price. Which supprots the contention of the text of the article. I've given two primary source quotes from unca Charlie Marx that illustrates that price was not, in his system at least, the ssame thing as value. Footnotes are footnotes, they *can* as a stylistic preference contain expansion of the text, as well as give citations (which the ones removed did, they cited external sources which they discussed).--Red Deathy 08:22, 5 December 2006 (UTC)

As an aside, has it ever occured to you that price comes close to labor, because manufacturers stop improving the manufacturing process once they have achieved a decent return on investment? Usually a company will not improve the manufacturing process unless it has a competitor trying to put him out of business. LTV cannot explain why new products start out expensive. Look at CD players. They started out costing something like $1000.00, now you can have one for maybe $50. Do you think manufacturers where making $950.00 profit on each unit? hardly. Dullfig 17:16, 5 December 2006 (UTC)

The above question, about the "price com[ing] close to labor" has nothing to do with the LTV. See, for example, http://www.dreamscape.com/rvien/Economics/Essays/LTV-FAQ.html#ValueDef10 151.190.254.108 22:37, 5 December 2006 (UTC) RLV, 5 December 2006

The first sentence of that FAQ that you're referencing says "The LTV is the theory that market prices are attracted by prices proportional to the labor time embodied in commodities." (Never mind, that a FAQ isn't a credible source one way or the other).Anarcho-capitalism 00:18, 6 December 2006 (UTC)

Right. The first sentence of that FAQ distinguishes between prices and labor values. That is, according to that FAQ, value (in the sense of the LTV) is not price, but something else. Namely, value is the amount of labor time embodied in a commodity. (I hope "Anarcho-capitalism" recognizes his comment is not a response to my explanation to Dullfig, just as Dullfig's comment is not a response to the conversation that preceded it. Nor is Dullfig's comment a comment on the Wikipedia article. As noted, Dullfig's comment is also not a comment on the LTV.) 216.171.187.46 RLV, 6 December 2006

I disagree. Look at the first quote for example. "The labor theor of value says that, in competitive markets, commodities that can be produced over and over against exchange in the marketplace according to the amount of average quality work time it takes to produce them." It's saying that the value at which they exchange accords with the amount of labor required to produce them. That's clearly saying that "value" refers to price. Here is another source: "The classical economists (by which I mean writers such as Adam Smith, David Ricardo, and John Stuart Mill, but also Fréderic Bastiat) adhered to some version of the cost theory of value, and in particular a labor theory of value. Although each writer differed in minor details and points of emphasis, at this level of generality we can take a cost theory of value to state the following: A good’s “natural” (or long-run) price is equal to its total cost3 of production. Similarly, a labor theory of value claims that a good’s natural price is proportional to the total quantity of labor required to produce it." [3] Anarcho-capitalism 23:53, 5 December 2006 (UTC)

Learn to read. "The labory theory of value says that, in competitive markets, commodities that can be produced over and over again exchange in the marketplace according to the amount of average quality work time it takes to produce them." The above does not say that labor values are prices. It is perfectly consistent with labor values being the "amount of average quality work time it takes to produce" commodities. That, in fact, is how labor values are defined by, for example, Marx. In fact, the acronym SNALT is commonly used in the literature for "socially necessary abstract labor time". I don't even see why this matter should be a subject of dispute. 216.171.187.9 10:17, 6 December 2006 (UTC) RLV, 6 December 2006

Quite - the concepts of bargain and rip-off illustrate the value/price difference nicely, if people think they are gtting a bargain it is because the price they are paying is below what they understand to be the value of the good, prices are proportionate to values but they do not equal values and are not the same thing, at least by the time we get to Charlie Marx. I've changed the tag because this isn't a question of neutrality but a dispute over the theory per se.--Red Deathy 10:54, 6 December 2006 (UTC)

BillJ - as you can see from quotes above, and cited sources, Marx did distinguish between Use value, exchange value and value proper (see the bolded quotes in the blockquotes above). I'll revert your changes...--Red Deathy 09:18, 12 December 2006 (UTC)

[edit] Too Technical

Personally, I think this article is too technical. This has come as a result of the 'dialectical' development of the article, which started as a critique of LTV and has now turned into a defence (somewhat). This is supposed to be an encyclopedic article which a person with no knowledge of the topic can be introduced to it.--Jack Upland 23:35, 25 November 2006 (UTC)

I agree, and it's slightly too long - personally, I favour losing the scary maths stuff, it's not necessary. I tried adding the conceptual model section, don't know how much that helps...--Red Deathy 08:17, 27 November 2006 (UTC)

I think it's beyond just the maths. The whole devotion to abstract theory is unnecessary at this level - including your pursuit of the various definitions of value. This is why I added the 'Justification' section which some object to (see above). It's not intended to prove the LTV just to summarise the reasons some have supported it before launching into endless series of theoretical diversions...--Jack Upland 06:57, 7 April 2007 (UTC)

[edit] Intro (again :-)

While I generaly like the intro, it seems it has grown a lot, and has become a little rambling and long winded. I fear it will bore the reader. I will atempt to condense it. Please feel free to join in (as if you guys needed my blessing :-). Dullfig 17:32, 23 December 2006 (UTC)

[edit] Value Revisited

I'm sorry to revisit this controversy, but I think the definitions of value included in the intro are likely to alienate and confuse the general reader. While Marx does use the bald term "value" in the "third sense",I am not convinced this is particularly relevant. It seems tautological, and certainly isn't very enlightening. After all, Marx states:

exchange value is the only form in which the value of commodities can manifest itself or be expressed (Capital, Vol. 1, ch. 1, section 1)

The only real entities here are the amounts of labour and the prices of products. To cloud this issue in a basic presentation of the topic is simply wrong. The whole controversy seems to be spurred by an overreaction to the Transformation Problem.

If these three definitions are included, I certainly don't think they should be in the intro as it gives the impression of being goobledegook.--Jack Upland 03:31, 29 December 2006 (UTC)

I'm not entirely sure I agree. Say you are shopping for hammers. you find a ball-peen, and a framing hammer for the same price (not surprising, since the labor involved is the same). But you need to do sheet metal work, so the ball-peen hammer is what you need. You have taken into consideration its use-value to make your decision.

I have a better one: you go buy a hammer for construction. There is a plain framing hammer, and then there is one with a groove on top, which allows you to hold a nail in the grove, so that you can start a nail in hard to reach places with one hand (such a hammer does exist). Other than the grove, the labor necessary to make both hammers is the same. The hammer with the groove costs twice than the regular, but you decide to buy it anyways because it has more use-value. You percieve the higher price to be fair, because you will get more use-value out of it.

Where did the extra use-value come from? Certainly not from labor. It must have come from the intelect of the person that thought of putting the grove on the head. But I thought that only human labor could create value. Isn't the person that thought of the grove entitled to compensation for creating more use-value? Shouldn't use-value be a factor in the exchange-value? -- Dullfig 04:29, 29 December 2006 (UTC)

Sorry, but your hammers are missing the point. The point here is not to argue over LTV (which is what you are doing) but to improve the text.--Jack Upland 03:45, 30 December 2006 (UTC)

Yes, I went a little off topic, but I still think that mentioning the use-value of things is necesary. Maybe we need a re-write to make it more readable? Dullfig 15:48, 30 December 2006 (UTC)

I never said "use-value" shouldn't be mentioned. It's the prominent defintion of "value" per se that rankles with me. What's the point?--Jack Upland 06:24, 1 January 2007 (UTC)

seems the intro is quite disorganized. I think the first step would be to decide what it is that we want to explain in this article. Right now it's like a ship without rudder. People add and subtract from it (welcome to wikipedia) at their heart's content. Anyways. Open to ideas. Dullfig 20:19, 1 January 2007 (UTC)

A blog post, http://robertvienneau.blogspot.com/2006/11/no-influence-of-tastes-on-prices-part.html, illustrates a theorem in price theory. In that example, commodities have different use values to different communities. Yet exchange values are no different among these communities. Contrast this to Dullfig's hammer example. Clearly, Dullfig does not understand modern price theory. He should also recognize that he is uninterested in understanding the labor theory of value. (People who do understand the theory know that they need not be concerned with how Stella got her groove back, or if anybody is entitled to more or less compensation in some particular case. See http://robertvienneau.blogspot.com/2006/11/marx-and-commentators-on-marx-on_09.html). Given his lack of understanding, I suggest Dullfig should refrain from modifying the article. And Jack Upland will always say that any entry related to Marxism is too technical. RLV, 1 January 2007 —The preceding unsigned comment was added by 216.171.187.7 (talk) 00:33, 2 January 2007 (UTC).

Clearly, you don't understand rules of modern civility. But I will overlook you crass attempt at intimidation (for now). As for the theorem you point to, if you where that smart, you would have noticed that the theorem contains a fallacy. The whole thing is based on the price of wheat and barley, two commodities! by definition, commodities will trade at a price proportional to their labor input, not their use-value. If the theorem is to hold valid, you would have to prove that it is true for goods with different use-value. Go back to your room and take another look at your theorem, and then come back when you are ready to discuss things in a mature, adult fashion. -- Dullfig 01:19, 2 January 2007 (UTC)

Dullfig should recognize that he does not know what he is talking about. The theorem is not false, but valid. Commodities in the example (and in general) do not trade at a price proportional to their labor input. And, in the example, the commodities have different use values. RLV, 1 January 2007

Ok, let me see if I get this straight: I don't know what I'm talking about, because a blogger says that taste has no influence on prices. cute.

Assuming you are arguing in good faith (not sure about that) let me tell you what is wrong with that theorem. Have you noticed that the amount of rye and wheat consumed by workers is totally arbitrary and designed to arrive at the expected outcome? worker A gets 9/16 bushels of rye, B gets 3/8 bushels of wheat, and C gets 1/8 rye and 3/8 wheat. Why can B get by on 3/8 wheat, but C needs 1/8 + 3/8? It would be more likely that all three would want equal volume of food. When you do the math for equal volume of food, the prices of rye and wheat vary depending on individual taste. Dullfig 07:49, 2 January 2007 (UTC)

Nope. Dullfig should realize that, when it comes to price theory, he doesn't know what he is talking about. RLV, 2 January 2007

To return to the point of Jack Upland's question - the reason why we need to distinguish all three, and why there's been such a fight over it, is that the theory can be quickly rendered ridiculous if price and value are assumed to be the same - hence why some editors, I'd suggest have been trying to write that into the intro.

This links in with an old example I used to use to explain LTV. How long is a piece of string? The obvious answer is, Some millimetres. This length value can only become known by comparison with lengths of other objects. How long is the piece of string? could be answered with Twice as long as this one. To render such comparisons meaningful and useful, we need to create an abstract measure, and a constant one (after all, pieces of string can be stretched). This is why we use the speed of light, perhaps we could refer to this as the string's metric value. Now, imagine a game where the person who guesses nearest the length of the piece of string wins it - no rulers allowed. The winning guess whilst based upon the competitor's estimate of the metric value of the string will be approximate and based not just on the string's real length but also on other competitor's guesses. Such guesses would equate to price of a piece of string.--Red Deathy 08:20, 2 January 2007 (UTC)

So do the changes made earlier today adequately address Jack's concern? 216.171.187.42 23:44, 3 January 2007 (UTC) RLV

No. Dullfig 23:52, 3 January 2007 (UTC)

I love it when trolls take over. Can't even sign his posts. Dullfig 16:19, 2 January 2007 (UTC)

To insist that it is not natural for humans to pay more for a product that has more use-value as compared with another one, is to not know human nature. My hammer example is a valid, real life example. But of course it is ignored, as it would involve thinking. Instead, some people choose to argue over some fictional example of some fictional islanders eating totaly made up quantities of cereal set at arbitrary prices, in order to prove LTV. nice. Dullfig 16:23, 2 January 2007 (UTC)

Dullfig should also realize that he doesn't understand what points are at issue and is incapable of summarizing them. RLV, 3 January 2007 —The preceding unsigned comment was added by 216.171.187.15 (talk) 08:20, 3 January 2007 (UTC).

Go away. And learn to spell summarizing. Dullfig 17:24, 3 January 2007 (UTC)

Hammers, string - I think you're all nuts. And I don't know why I'm accused of arguing any article about Marxism is too technical. The issue in economics is how we explain the phenomenon of price. I don't believe that "supply and demand" or " marginal utility" can explain it. I believe LTV does. That does not mean price is always proportionate to labour value, rather that it fluctuates around this norm. I don't see how an article on LTV can usefully or sensibly disappear or obfuscate the issue of price.--Jack Upland 06:51, 14 January 2007 (UTC)

PS "Since the term value is understood in the LTV as denoting something created by labor and its magnitude as something proportional to the quantity of labor performed" - this is equivalent to saying the "Labor Theory of Value" should be defined as the "Labor Theory of Labor"!!!! Sorry, just a little bit circular. —The preceding unsigned comment was added by Jack Upland (talk • contribs) 06:59, 14 January 2007 (UTC).

"It [i.e., price] fluctuates around this norm [i.e., labor value]." No. The distinction between 'market price' and 'natural price' (also known as 'price of production') is not the same as the distinction between price of production and 'labor value'. The 'realization problem' is not the 'transformation problem'. All sorts of explanations are available, e.g., http://www.dreamscape.com/rvien/Economics/Essays/sraffa.html. (I do think the intro is better set off from the definition of value.) ~~ RLV —The preceding unsigned comment was added by 209.217.195.11 (talk) 22:07, 14 January 2007 (UTC).

Point taken on realization v transformation problem. However, in both cases the price/value difference is caused by market-based fluctuations. Moreover, the equalisation of profit posited by the transformation problem never occurs (and if it did it would negate itself), so I question the weight given to this issue. From reading the article, you'd think that equating prices and values was wide from the mark when it's only a minor inaccuracy. Though economists like to assume a 'normal profit' phenomenon, empirical evidence shows otherwise. If you think I'm wrong, provide real world data.--Jack Upland 07:11, 7 April 2007 (UTC)

[edit] Confusion with labor theory of price?

Are the mainstream criticisms of LTV based on confusion between LTV and the labour theory of price? In the cost of production theory of value article, it says:

Ricardo also refutes the labor theory of value in later sections of that chapter. This refutation leads to what later became known as the transformation problem. Karl Marx later takes up that theory in the first volume of "Capital", while indicating that he is quite aware that the theory is untrue at lower levels of abstraction. This has led to all sorts of arguments over what both David Ricardo and Karl Marx "really meant". Nevertheless, it seems undeniable that all the major classical economics and Marx explicitly rejected the labor theory of price (Gordon, Donald, F. What Was the Labor Theory of Value? American Economic Review, Vol. 49, No. 2, Papers and Proceedings of the Seventy-first Annual Meeting of the American Economic Association (May, 1959), pp. 462-472

154.5.39.80 16:14, 13 January 2007 (UTC)

This is a source of endless confusion on both sides. Marx, Smith etc were quite clear that price fluctuated, but at the same time they did not claim "value" was unrelated to price - if they did what on earth is its meaning???--Jack Upland 06:41, 14 January 2007 (UTC)

No, but they were quite clear that price and value were separate things. Hence the endless misnomer surrounding antiques and paintings in these sorts of debates - someone can pay any price for anything - there's no discernable law which will necessarilly explain all prices, but values can - I suppose the main debate is whether value determines or over-determines price.--Red Deathy 08:40, 15 January 2007 (UTC)

[edit] Intro to be changed...

The fundamental point is the intro needs to be changed:

• It totally confuses the issue of LTV (so why write the article???)
• It argues the point whether Adam Smith accepted the LTV - this has no place in an intro

Why can't people accept a boiler plate introduction which is just that - i.e. introduces the topic to people who aren't aware of it, "needless" to say - and then argue away in the body of the article??? The result of the current structure is that bridges are burnt down before they're even constructed.--Jack Upland 07:14, 14 January 2007 (UTC)