Labor Theories of Value
The labor theories of value (LTV) are different from the accepted theories of value and states that the value of a commodity only has relation with the labor required for obtaining or producing that commodity and is not related to any other factors of production. The concept of labor theories of value is often linked with Marxian economics in present times. It is also related to earlier classical economic theories like the theories of David Ricardo and Adam Smith. The term ‘labor theory of value’ was never used by Karl Marx for describing the theory of value; instead he referred to a law of value which has no association with the concept of’ labor theory of price’ which is a classical economics concept.
In the LTV, value means something that is the made by labor and its ‘magnitude’ is something that is relative to the quantity of labor being performed. So, explaining how the labor process preserves value and put in new value in the commodities that it creates is important.
A commodity’s value is proportional to the intensity and duration of average labor performed for the production of the commodity. That is, the value of a commodity will increase in proportion to average productivity and skill of the labor performed. Therefore, even if workers perform with more skill and productivity as compared to others, they will increase the value by producing more quantities of commodity, but each unit will still have the same value as the others in the same class. When unskilled workers work slowly, the skill of labor on average is decreased which increases the average labor time needed for producing each unit. But the result produced by the labor process of these unskilled workers cannot be sold for a higher price just because they have worked for more time for production of the commodity than others, as the value of the commodities will still be same.
For production, not just labor, but other means of labor like materials, plants, tools, etc are required which is usually the product of other labor processes and comes in the process with certain value. There are also other means of production like air, sunlight, uncultivated land, etc that are required, but they are not made by labor and so have no value and they are referred to as constant capital.