Instigator / Pro
14
1588
rating
23
debates
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Topic
#1765
the Marxist "Labor theory of value" is incorrect.
Status
Finished
The debate is finished. The distribution of the voting points and the winner are presented below.
Winner & statistics
After 2 votes and with 8 points ahead, the winner is...
Patmos
Parameters
- Publication date
- Last updated date
- Type
- Standard
- Number of rounds
- 4
- Time for argument
- Three days
- Max argument characters
- 20,000
- Voting period
- One week
- Point system
- Multiple criterions
- Voting system
- Open
Contender / Con
6
1442
rating
22
debates
34.09%
won
Description
The Labor Theory of Value states that the economic value of a good or service is determined by the total amount of "socially necessary labor" required to produce it.
Rules.
1. Forfeit=autoloss
2. No new arguments in the final round from either side.
3. BoP will be shared between debaters. Each side must attempt to prove that their position is correct.
structure
R1. affirmative constructive and negative constructive + rebuttal.
R2. Affirmative and negative rebuttals
R3. Affirmative and negative rebuttals
R4. Rebuttals, final focus, and summary.
Round 1
Prior to the Copernican Revolution, Astronomy had held to the simple theory of a Geocentric model of the universe. However, that simple theory began to grow in complexity as it attempted to counter some obvious objections to the geocentric paradigm. Starting in the 1870s, economics went through its own Copernican revolution as the Labor Theory of Value fell out of favor as the preferred explanation for the value of goods and services.
Today, the Labor Theory of Value boasts only a minuscule number of supporters amongst professional economists and for good reason. There are a number of obvious objections to the labor theory of value that I will outline here
What about differences in skill level that lead to different amounts of labor being necessary to produce the same product? Is the same product is produced by craftsmen of lower skill, then it may take more labor to create. Is the product then worth more despite being lower quality?
What about works of art that required little labor to produce but still fetched high prices? if the Labor Theory of Value is correct, then these works of art should have low value. But they don't.
How does the Labor Theory of Value assess the value of land and other natural resources? No labor goes into the creation of land yet there needs to be a mechanism for determining its value. the LToV does not achieve this.
Marx, as well as other proponents of the LToV, had to provide explanations of ever-increasing number and complexity. Much like the arguments for the Geocentric model, these arguments quickly began to feel ad hoc in nature leading to most respectable economists being driven away from the theory.
In reality, Value is Subjective
Carl Menger, founder of the Austrian school of economics, outlined in his book "Principles of Economics" the fact that value is not determined by physical calculations like labor, but rather by human perception of the value of a particular good or service. Value is by no means transcendent. An object is only as valuable insofar as it serves as a means to an end for an individual person's goals. This method of determining value solves all of the objections to the LToV without the need for overly complex excuses. Land has value because it serves the purpose of, say, growing crops for food. Art has value because people have deemed it to be beautiful and are willing to pay lots of money for it. And the Subjective Theory of Value has no problem explaining away differences in prices for the same good produced by craftsmen of varying skill. A lower quality item is perceived to have a lower value than a higher quality item because a higher quality item serves a purpose better than a lower quality item. Regardless of how much labor went into producing it.
Marx had the relationship between labor and value completely inverted.
Famed economist Steven Horwitz explains that the perceived value of a good or service is what determines the value of labor, not the other way around. Gordon Ramsay's food is not valuable because of the labor of the chef. But rather the fact that his food is so good determines that Gordon's labor is worth a lot so in turn, he makes the big bucks. Under the Subjective Theory of Value, high-quality labor is rewarded for producing valuable goods. You see how this causes Marx's entire economic worldview to implode. Capital does not exploit labor as Marx claims in the LToV. Rather, Capital increases the value of labor by facilitating its transformation into products and services that people want and need which then allows for greater remuneration for the laborer.
Steven Horwitz writes: "For economists, the labor theory of value holds roughly the same validity as the geocentric view of the universe. For that reason, Marx’s whole theoretical apparatus, and therefore his criticisms of capitalism, are equally questionable.
Unfortunately, many people, academics outside economics and the public alike, are simply unaware of the Copernican revolution in economics. Knocking down the labor theory of value remains a labor-intensive and valuable task."
Conclusion
Much like the geocentric model, the LToV has lost all of its credibility amongst experts in its field. Understood correctly, Capitalism serves as a method by which humans communicate their needs and wants with each other by means of how much they're willing to pay for a particular good or service. The Subjective Theory of Value is far simpler and more reliable than the Labor Theory of Value which not only defies basic economic reality, but also can only survive on the backs of numerous fallacious ad hoc arguments to cover up for all of the wild exceptions to the LToV.
References
Horwitz, Steven. “We're Still Haunted by the Labor Theory of Value: Steven Horwitz.” FEE Freeman Article, Foundation for Economic Education, 12 Nov. 2015, fee.org/articles/were-still-haunted-by-the-labor-theory-of-value/.
Thomas, Bradley. “Three Arguments Debunking Marx's Labor Theory of Value: Bradley Thomas.” Mises Institute, The Mises Institute, 12 Dec. 2019, mises.org/wire/three-arguments-debunking-marx’s-labor-theory-value.
Menger, Carl, James Dingwall, and Bert F. Hoselitz. Principles of Economics. Grove City, PA: Libertarian Press, 1994. Print.
Hello to my opponent, a well presented first round of logical, common sense argument.
Social reality is such that economic reality is dictated not necessarily by the value of the people, but more likely by the value variously attributed to goods. We know that capitalism prevails, so from a purely economic perspective I cannot readily dispute my opponents argument
So was Marx the economist unaware of this?
I would suggest not and therefore will argue very simply that the correctness of the "Labour Theory of Value" must be judged within the context of Marx's philosophical idealism rather than in the context of an assumed economic certainty. That is to ask, who are we dealing with here? Marx the economist or Marx the socialist dreamer.
A. Was Marx saying, wouldn't it be good if this was how things could or should be.....In this context an economic ideal is correctly relevant to the philosophical premise.
B. Or was he saying, this is how things actually work.....How likely is it that Marx would be so foolish as to make such a definitive yet inaccurate assertion?
No matter how we might view Karl Marx with hindsight, we must nonetheless be honest and rightly credit him with the intellect that he clearly possessed.
Even though time and experience has discredited the ideals of enforced socialism, the principles held therein are still relevant to the theory, even if long since proven to be irrelevant to human social reality. In just the same way that geocentric principles are today easily discredited and yet were once deemed to be wholly relevant.
Therefore when we judge the "Labour Theory of Value" and consequently also judge Karl Marx, I would suggest that it is imperative that we judge appropriately within the context meant. In this instance not as a factual proposal but as an idealistic proposal.
"Reason has always existed, but not always in a reasonable form". Karl Marx.
"All in know is I'm not a Marxist". Karl Marx.
Round 2
Thank you to my opponent for his swift response.
I would like to begin by pointing out that my opponent has effectively conceded my economic analysis and refutation of the Labor Theory of Value. This will be important for my next point.
My opponent makes the argument that we should judge the LToV not in the context of economics, but rather in the context of Socialist Philosophy. Note, that this debate is filed in the "economics" category and I believe therefore should revolve around economics.
Nevertheless, I will provide a refutation of my opponent's argument. My opponent implicitly argues that the LToV is morally correct rather than economically correct. stating that this is how things "should" run. However, there are a number of objections to this assertion.
1. The LToV rewards mediocrity or even incompetence and in effect discourages excellence. Consider the first of the objections I posed to the LToV in my first post. That if the LToV is correct then a product produced by an inferior craftsman should have a higher value than a product created by a superior craftsman because the former product requires more labor to produce. Therefore, the LToV creates a negative incentive structure wherein the less competent you are, the more labor you need to expend to produce a product, and the more valuable your labor becomes. Why, in this world, would anyone strive for excellence?
2. The LToV promotes inefficiency. Under the LToV the way you increase your profits is by increasing the amount of labor you expend to accomplish a particular task. In this way, the LToV discourages efficiency. After all, the less efficient you are, the more labor you need and the more money you earn.
As we can see, even if we grant that the LToV is an economic truth, it still produces a world with less prosperity and efficiency and is, therefore, an incorrect idea on philosophical as well as economic grounds. It is good and right that craftsmen who have spent years developing their skills to become masters of their trade are paid more than those that haven't put in that effort. It is good and right to have a system that promotes economic efficiency thus bolstering the prosperity of everyone benefiting from that economy.
I would also like to point out that my opponent made no attempt to prove that the LToV IS philosophically correct. He merely attempted to shift the paradigm of the debate. As such, my opponent has yet to provide us with a proper constructive.
Hello once again.
Yes, I reiterate that the economic argument is sound.
So I have to shift my argument away from purely economics and focus on what I perceive was Marx's reasoning and purpose behind the LToV.
In short; that the social ideal should be the value of the people rather than the value of the product. Therefore within the context of the philosophy the LToV is sound.
Now let me address my opponents refutations:
1. Firstly, I have already conceded that the LToV in practical terms is clearly incorrect, given the nature of hierarchy and also the proven unworkability of enforced socialism. Nonetheless, within the context of the philosophical ideal, it is still fundamental that it is the labour of the people that is rewarded rather than the product of their labour. Therefore in the context of the social ideal neither product value nor quality are primary considerations, if considerations at all.
2. The social ideal accepts the inequality of ability and relies upon achievement and achievable efficiency through cooperation. Similarly as above, profit is not a primary consideration, if a consideration at all.
I would not grant that the LToV is an economic truth. It is only truthful in as much as it was truthfully proposed only as a socialist ideal. The ideal proposes social equality without regard for monetary prosperity and with a lesser regard for efficiency. Therefore in terms of a profit based economy the LToV is clearly incorrect, whereas philosophy is always correct in the context of it's production, irrespective of it's achievability in practical terms.
Once again, mastery and skill are not the primary considerations of the ideal. Nonetheless as an aside to the actual issue, I would suggest that mastery and skill would inevitably be acquired through practice and effort, in any social system.
What is good and right is relative to the system and to what the system aims to promote. My opponent clearly makes comparisons with what has generally become the social norm. The LToV was obviously never meant to be representative of what is now generally regarded as the social norm.
I would strongly assert that philosophy cannot be anything other than correct. In so much as the production of the data is as honest as the physiological process that achieves the output. Whether or not the output can be successfully applied, is separate to and exceeds the philosophy.
In the context of this debate I am not certain what more my opponent requires as a constructive. So I will simply rest with the contention that The LToV is not primarily an economics focussed issue. if it were such, then my opponent will unavoidable also be calling into doubt not just the practicality of the philosophy, but also the credibility of the philosopher and the very nature and purpose of philosophy.
Therefore my position in this debate is solely in defence of freedom of thought within the context of Marx's philosophy, rather than to defend the social impracticality of the application of the thought and the philosophy.
Round 3
I think there was something of a miscommunication between myself and my opponent on what my last argument meant. In this round, I'd like to clear that up.
My argument in my last post was that the LToV is as backward philosophically as it is economically. Consider my first point which my opponent misunderstands as a merely practical argument. What I argued was that it is morally correct that people who have put in the effort necessary to master their trade should be rewarded for that effort. Not punished as the LToV accomplishes by ensuring that inferior craftsmen who need to put in more labor to produce a product get paid more while those who use less labor get paid less for their work. In short, the LToV punishes people who work hard and rewards those that don't. This is morally, ethically, and philosophically inverted from the way things should be.
My opponent argues that people should be rewarded instead of their work being rewarded. Rewarded for what exactly? Existing? Not contributing to the best of your ability? In a proper moral and ethical order, those that contribute more should be rewarded and those who contribute less should receive less in return. This incentivizes the creation of more, higher quality products and services that better the lives of others. The LToV incentivizes the creation of fewer, lower quality goods and services that will not better the lives of others.
My response to this argument boils down to this: the LToV is philosophically incorrect because the very idea that you will punish those people who have put in all of the time and effort necessary to develop a skill set that sees to the betterment of many other lives for the sake of so-called "social equality" is immoral and unjust. The great irony of my opponent's argument is that he actually demolishes true equality in his attempt to create it. Telling one group of people, the skilled craftsmen, that their work is worth less than another craftsman's work simply because it took less time to create actually creates a horrible inequality and injustice. Equality is not measured by outcome. It is measured by opportunity. Everyone has the opportunity on the Subjective Theory of Value to put in the work to develop a skill and make more money. under the LToV skilled workers are denied the opportunity to reap the fruits of their labor simply so that the Socialist can see a nice pretty spreadsheet where everyone makes the same amount of money regardless of how much or little they contribute to society. Further, unless the skilled worker deliberately decreases the quality of his work, then he will actually make LESS money and inequality as my opponent views it remains exactly the same. All the LToV does is invert who has more money. Suddenly, those producing low quality work have more money than those that produce high-quality work.
As we can see, the LToV has the moral order completely reversed from the way it should be with those that contribute more being penalized and those that contribute less being rewarded as well as creating an incentive structure that discourages the betterment of the lives of our fellow man.
My opponent argues that philosophy cannot be anything other than correct. Now, I've heard a lot of nonsensical claims in my long and storied debating career. But this one may just take the cake. A philosophy can only have a chance to be correct if what it aims to promote is also correct. If the aims are immoral then the philosophy is also immoral. If a philosophy is immoral then it is also incorrect. Moreover, the mere existence of a particular philosophy is not evidence that it is correct. Perhaps a philosophy's aims could be correct but if that philosophy doesn't actually achieve those aims, then that philosophy should be considered incorrect. I have already proven and my opponent has already conceded that the LToV is broken economically and socially. He even conceded that the LToV is broken in every practical way. This means that the LToV does not even come close to accomplishing its aims. Even if I grant that those aims are correct, the LToV certainly isn't.
If my opponent's argument is true, then some truly awful philosophies can be filed in the "correct" category. Nazism being perhaps the greatest example.
What's more, I refuse to allow my opponent to drag this debate into a fantasy world where he is going to argue that if we ignore all of the LToV's inherent and critical flaws, then it can be correct. Moreover, my opponent has yet to prove that the aims of the LToV are correct.
Moreover, this notion that Marx only intended the LToV to be some pie-in-the-sky abstract idea is directly contradicted by his own writings. In "Das Kapital" Marx directly argues that the LToV CAN explain the market mechanisms I addressed in my first post. Marx's attempt to show how his theory worked in a practical sense completely discredits my opponent's argument that we should only address this Practical, Economic theory "as it was intended" meaning an abstract philosophical contention. If we accept my opponent's argument that we should only consider the LToV in the way Marx intended, then I've already won this debate. He conceded right out of the gate.
My opponent attempts to claim that his argument is a "defense of freedom of thought." That argument means nothing in this debate. Just because you are free to think what you want does not mean that every thought is correct. This is demonstrably false.
Ok:
Round three and my opponent has gone off at something of a different tangent. They no longer present an argument against the LToV based solely on the "incorrectness" of it's actual ability to perform economically. But rather an extended discussion taking in a wider range of social ethics and values.
So; I think that it would be foolish of me to now be fully drawn into a protracted discussion regarding the practical ethics of LToV, rather than just sticking to my original premise, which as a philosophical social ideal the LToV has always been nothing other than correct. Backward maybe especially if we trace it's antiquity all the way back to Thomas Aquinas and beyond, possibly all the way back to Aristotle.
Though I still firmly believe that it is correct to assert That the principles of a LToV were as relevant to the social idealists of the Twentieth Century as they were to the idealists of the Fourth Century B.C.
Therefore the relevance of the thought has always demonstrated it's correctness within the context of the thought, irrespective of how economic reality has inevitably always played out.
After all it's so easy to argue economic incorrectness once you have acquired all the necessary information.
Despite my opponents tugged heart strings and emotive references to Nazism:
The morality or correctness or inequality of society is a separately debateable issue. Though the transferability of said argument should be obvious to the seasoned debater. To draw upon my opponents rhetoric; are they attempting to say that current systems do not "punish" on the basis of social inequality and similarly do current systems also not promote greed. To this end I think that it's fair to suggest that my opponents approach to social morality is somewhat ambiguous and questionable.
Given the somewhat hypocritical nature of Marx, in so much as he espoused social equality from the comfort of his so obviously privileged status. One would concede that "pie in the sky" is not an unfair comment. But once again, if the abstract thought is sound then despite any shortcomings the thought is nonetheless correct.
Irrespective of our shared criticisms of the philosopher, I think that it is still fair to assume that Marx's thoughts were promoted with all seriousness, rather than as deliberately nonsensical ramblings, as my opponent would perhaps have us believe.
"Fantasy Worlds" are:
One persons reality is often another persons fantasy, that is as true today as it always has been irrespective of how society might perform economically. Similarly the freedom of thought and the freedom to create "abstract" fantasy is just as time worn, if not more so.
As far as I am concerned Big Brother, the ability to conceptualise and fantasise, renders itself irrevocably correct. The practicable correctness or incorrectness of the internal fantasy remains irrelevant until externally demonstrated
For now at least, the fundamentality of the physiological process, absolves the internality of thought of any blame.
Even though the we now view the practicable applications of Nazism as being so completely immoral, within the heads of Adolph Hitler and his acolytes the thought, the abstract idea, the fantasy was nonetheless correct.
Therefore the thought irrespective of morality, was always correct, even if not always demonstrably practicable or moral.
My final thought for Round Three would be that my opponents argument would have been far better suited by a different adjective. Unworkable, impracticable, unfeasible etc. rather than using the word "incorrect". I certainly would not have taken up the challenge so readily if this had been the case.
Because as I see it, the practicable correctness or incorrectness of any theory is easily demonstrable and observable with hindsight. Whereas the theory as an abstract idea can neither be deemed to correct nor incorrect unless implemented and subsequently scrutinized.
Which begs the question:
Has the Labour Theory of Value ever been truly tested?
Round 4
I think the best way to handle my last post is to synthesize this debate into its main point then respond to the arguments my opponent made that don't neatly fit into this point.
Just because someone believes something, doesn't make it correct.
So far in this debate, my opponent has conceded not only that the LToV is broken in a practical sense in terms of economics but also that it's broken in the abstract terms of ethics and morals. How then, is the LToV correct? My opponent has argued in this debate that merely because someone somewhere genuinely believes in an idea, that that automatically makes it correct. But he has yet to really explain why that is. If a philosophy has bad goals and bad ethics, then fails to achieve those bad goals in the practical world as the LToV has, then it seems to me that this philosophy is incorrect in every sense of the word both in the abstract and in the practical. This notion that belief in an idea is what generates its correctness seems to disregard the fact that people throughout history have believed in some crazy things. Back in ancient times in and around Canaan, they would sacrifice their children to Baal in order to bring about prosperity. But of course, Baal isn't real. He didn't receive your sacrifice, and he won't bring prosperity. You just murdered your child for no reason. It was a philosophy both immoral in its ethics and impractical in its function. It believes that you have to commit an act of evil to obtain your goal, but doesn't even get you there. as my opponent said, "What is good and right is relative to the system and to what the system aims to promote." So if a particular philosophy aims to promote something, but then cannot actually achieve that goal, is it still correct?
He also says "whereas philosophy is always correct in the context of it's production" So if a philosophy doesn't generate its desired production that means it's incorrect?
My opponent says " if the abstract thought is sound then despite any shortcomings the thought is nonetheless correct."
But then he never addresses any of my arguments about why the abstract thought is not sound when I attacked the LToV's ethics.
My opponent also claims that the Subjective Theory of Value punishes social inequality and promotes greed. Not so. the SToV makes sure that you get paid directly in proportion with the value of the good or service you are providing. You are not being punished if you get paid less, rather you are getting paid what you've earned. Whether that's more or less is ultimately up to you and how much work you're willing to put in. As for promoting greed, I don't see any good argument as to why its greedy to want to be paid more for producing a better product. That just seems like a rational way to order an economy.
My opponent says "I think that it is still fair to assume that Marx's thoughts were promoted with all seriousness, rather than as deliberately nonsensical ramblings, as my opponent would perhaps have us believe." But that's what I said. I said that in "Das Kapital" Marx was seriously proposing the idea that the LToV was a real practical economic idea that explains market mechanisms. And if, as you said in your very first post " it is imperative that we judge appropriately within the context meant." then I won this debate after you conceded in your first post.
To sum up this debate, I believe that I have won because my opponent has conceded that the LToV is incorrect in the practical and abstract ethical sense. That it is only even abstractly correct within fantasy. That is to say, not in the real world. If the voters believe as I do that we should judge real ideas within the context of the real world, then I can see nothing but a vote in affirmation of the resolution.
Finally, I would like to answer the hypothetical question my opponent ended his post with. "Has the Labour Theory of Value ever been truly tested?"
Yes, it was called communism. And it was incorrect.
Towards the end of this post, my opponent seems to be conceding that the LToV is only correct inside of fantasy which by definition means that the LToV is incorrect in the real practical and abstract world. The voters should prefer the real world over fantasies.
So:
My opponent sums up with communism and fantasy. Communism as an exemplar of the LToV and fantasy as a basis for my contention.
Firstly, it was my opponent who proposed the idea of fantasy and I was merely addressing their argument. I have never proposed fantasy as being Marx's intention.
Communism is further debatably just an extreme form of enforced socialism that has little or no regard for a social ideal such as the LToV and I would suggest that my opponent made a gross error in suggesting that 20th and 21st Century so called communist regimes were suitable examples of incorrect LToV.
In fact the LToV remains untested and perhaps untestable given the true nature of hierarchical human society. Therefore an untested system cannot be not proven to be either correct, or more importantly incorrect.
My contention throughout therefore, has always been the primary correctness of the philosophical ideal rather than the impracticability of the theory. For as I have continually contested it is all too easy to judge with hindsight and propose that even without testability a conceptual proposition would be incorrect.
My opponents ethical argument is extremely ambiguous and I would suggest that in fact they are actually promoting the inequalities of capitalism as being somehow the more morally correct. This must be proven.
To conclude:
I have conceded from the start and for the reasons given that the LToV is unlikely to be a workable theory. Which is completely different to saying that the LToV can actually be proven to be workably incorrect.
For as long as it is possible to remain so, it is the freedom of the thought that must be paramount rather than the sometimes untestable correctness of the thought.
So irrespective of practicability, for as long as Marx's thoughts were put forward in all honesty, then the thought, namely the Labour Theory of Value was not incorrect.
Finally:
Many thanks to my opponent for a well presented and well contested debate.
Looks like a really good debate. I have sadly been too burnt out lately to put time into voting.
Yes.
But were Marx's economic assumptions (Labour Theory of Value) rooted in socialist idealism rather than in pure economics.
incorrect as in it is rooted in false assumptions about market forces relating to how prices are set.
Incorrect, simply as in an unworkable hypothesis? That is to say a flawed philosophy from the outset.
Or an incorrect hypothesis in light of what we can conclude from experience? based solely upon economics.
Marx the philosopher, economist or pretender?