 Karl Marx Labor Theory of Value. Delusion or Truth?Gennady Bilych () Macroeconomics from Socionet Abstract: Karl Marx’s labor theory of value has been on the periphery of the economic thought for already more than 100 years. Being a follower of Ricardo D., who, as many believe, never adhered to the labor theory of value (his theory is often called 93% theory of labor value), Marx contended that product value is defined in full by the quantity of invested labor. Presence of capital in manufacturing process should not embarrass anybody: it constitutes paid labor of the creation of instruments of labor, equipment, erections, and the last thought causes no doubts. At such an approach the profit of capitalists and businessmen can be obtained only by way of exploitation, in other words, by the appropriation of a part of the labor. Marx was subjected to severe criticism as early as during his lifetime, the most successful example of the criticism being works by Bohm-Bawerk E. V., on which we are going to dwell later. But other theories, including contemporary ones, suffer from the same shortcomings. Profit is interpreted as payment for a specific production factor “entrepreneurial talent” and is a reward for efficient resources use. Entrepreneurial activity is connected with an extremely high risk and nothing guarantees adequate payback. All this arouses no doubt. But all theories have one hidden defect. The paradox is in the following: if salary is only a part of end value of a product (even if 93% of the value), then how comes that all end products are bought. All workers’ salary is clearly insufficient to buy out all products and services. If one assumes that all the profit is also directed at the purchase of product manufactured, then where is here a place for savings and investments, which we observe in the real world. Savings must be made from workers’ available funds, and those are definitely not enough. How to solve the existing paradox? Date: 2011-04-10 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:nos:wuwpma:bilych_gennady.85552-008 Access Statistics for this paper More papers in Macroeconomics from Socionet |
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