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In my view, the labor theory of value hasn't been dis-proven so much as it has simply fallen out of favor, for essentially practical reasons.

It is helpful to make the distinction between price and value, or to use Marx's terms, between exchange-value (the amount something is worth in money terms) and value (the average amount of labor time socially necessary to produce it). In theory, the relative prices of commodities in general result from their respective values. In reality, when we are talking about specific kinds of commodities, things get more complicated. The high price of a diamond or a Picasso painting may not correspond to their value, but those are not typical cases. There are different ways of addressing such exceptions that have been debated, particularly among Marxian discussions of the transformation problem.

But with this in mind, its also not difficult to see the real reason that labor theories of value in general have fallen out of favor. If you properly understand what is meant by the labor theory of value, you will quickly see that it is very difficult (perhaps impossible) to empirically measure the value of anything. In contrast, we have mountains of data about prices. So, economic theory in the twentieth century has increasingly worked its way around value in the classical sense, not so much disproveing its existence as finding a way to live without it. Modern economics shows us that studying prices instead of their underlying values can be relatively useful. Marxists and others who defend the labor theory could counter, however, that where economists have failed (e.g. their inability to predict of financial crises) it is precisely because the underlying essence of value is still human labor.

Finally I would emphasize that Smith, Ricardo and Marx each developed their own theories of value. In that sense, I do not think that sweeping, general critiques of "the labor theory of value" in the singular make a whole lot of sense. Ricardo built on and critiqued Smith, rejecting parts of his theory, while Marx did the same to both of the other two. These theories are each quite different and I haven't seen a convincing, general critique that really applies to all three.

In my view, the labor theory of value hasn't been dis-proven so much as it has simply fallen out of favor, for essentially practical reasons.

It is helpful to make the distinction between price and value, or to use Marx's terms, between exchange-value (the amount something is worth in money terms) and value (the average amount of labor time socially necessary to produce it). In theory, the relative prices of commodities in general result from their respective values. In reality, when we are talking about specific kinds of commodities, things get more complicated. The high price of a diamond or a Picasso painting may not correspond to their value, but those are not typical cases. There are different ways of addressing such exceptions that have been debated, particularly among Marxian discussions of the transformation problem.

But with this in mind, its also not difficult to see the real reason that labor theories of value in general have fallen out of favor. If you properly understand what is meant by the labor theory of value, you will quickly see that it is very difficult (perhaps impossible) to empirically measure the value of anything. In contrast, we have mountains of data about prices. So, economic theory in the twentieth century has increasingly worked its way around value in the classical sense, not so much disproveing its existence as finding a way to live without it. Modern economics shows us that studying prices instead of their underlying values can be relatively useful. Marxists and others who defend the labor theory could counter, however, that where economists have failed (e.g. their inability to predict of financial crises) it is precisely because the underlying essence of value is still human labor.

Finally I would emphasize that Smith, Ricardo and Marx each developed their own theories of value. In that sense, I do not think that sweeping, general critiques of "the labor theory of value" in the singular make a whole lot of sense. Ricardo built on and critiqued Smith, rejecting parts of his theory, while Marx did the same to both of the other two. These theories are each quite different and I haven't seen a convincing, general critique that really applies to all three.

In my view, the labor theory of value hasn't been dis-proven so much as it has simply fallen out of favor, for essentially practical reasons.

It is helpful to make the distinction between price and value, or to use Marx's terms, between exchange-value (the amount something is worth in money terms) and value (the average amount of labor time socially necessary to produce it). In theory, the relative prices of commodities in general result from their respective values. In reality, when we are talking about specific kinds of commodities, things get more complicated. The high price of a diamond or a Picasso painting may not correspond to their value, but those are not typical cases. There are different ways of addressing such exceptions that have been debated, particularly among Marxian discussions of the transformation problem.

But with this in mind, its also not difficult to see the real reason that labor theories of value in general have fallen out of favor. If you properly understand what is meant by the labor theory of value, you will quickly see that it is very difficult (perhaps impossible) to empirically measure the value of anything. In contrast, we have mountains of data about prices. So, economic theory in the twentieth century has increasingly worked its way around value in the classical sense, not so much disproveing its existence as finding a way to live without it. Modern economics shows us that studying prices instead of their underlying values can be relatively useful. Marxists and others who defend the labor theory could counter, however, that where economists have failed (e.g. their inability to predict financial crises) it is precisely because the underlying essence of value is still human labor.

Finally I would emphasize that Smith, Ricardo and Marx each developed their own theories of value. In that sense, I do not think that sweeping, general critiques of "the labor theory of value" in the singular make a whole lot of sense. Ricardo built on and critiqued Smith, rejecting parts of his theory, while Marx did the same to both of the other two. These theories are each quite different and I haven't seen a convincing, general critique that really applies to all three.

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In my view, the labor theory of value hasn't been dis-proven so much as it has simply fallen out of favor, for essentially practical reasons.

It is helpful to make the distinction between price and value, or to use Marx's terms, between exchange-value (the amount something is worth in money terms) and value (the average amount of labor time socially necessary to produce it). In theory, the relative prices of commodities in general result from their respective values. In reality, when we are talking about specific kinds of commodities, things get more complicated. The high price of a diamond or a Picasso painting may not correspond to their value, but those are not typical cases. There are different ways of addressing such exceptions that have been debated, particularly among Marxian discussions of the transformation problem.

But with this in mind, its also not difficult to see the real reason that labor theories of value in general have fallen out of favor. If you properly understand what is meant by the labor theory of value, you will quickly see that it is very difficult (perhaps impossible) to empirically measure the value of anything. In contrast, we have mountains of data about prices. So, economic theory in the twentieth century has increasingly worked its way around value in the classical sense, not so much disproveing its existence as finding a way to live without it. Modern economics shows us that studying prices instead of their underlying values can be relatively useful. Marxists and others who defend the labor theory could counter, however, that where economists have failed (e.g. their inability to predict of financial crises) it is precisely because the underlying essence of value is still human labor.

Finally I would emphasize that Smith, Ricardo and Marx each developed their own theories of value. In that sense, I do not think that sweeping, general critiques of "the labor theory of value" in the singular make a whole lot of sense. Ricardo built on and critiqued Smith, rejecting parts of his theory, while Marx did the same to both of the other two. These theories are each quite different and I haven't seen a convincing, general critique that really applies to all three.