What is Value? | Smith, Ricardo, Marx | Keyword

[@ClayShentrup]

warning: the presenter's background is in critical theory and social justice, not math or engineering.

[@TheoryPhilosophy]

Lol

[@ClayShentrup]

@@TheoryPhilosophy You really are dug in hard on this idea that laughing is a good counter argument.

[@willystravinsky3814]

@@ClayShentrup and you think your comment was an argument? also just because someone doesn't decide to engage with your dumb-assery doesn't mean that they don't have an argument

[@ClayShentrup]

@@willystravinsky3814 of course it was an argument; it was a mathematical proof. if you can't understand basic concepts like deadweight loss, you have no hope of understanding anything about economics. this is why you gravitate to a fringe religion like marxism, which has no actual basis in fact.

[@willystravinsky3814]

​@@ClayShentrup what is marxism? explain it to me. i want to know if you understand what you critique first

[@Zing_art]

Thanks for the brilliant summation. All the labour that you have put in this and in every other video of yours is just commendable

[@ClayShentrup]

it's idiotic nonsense actually. he doesn't even understand subjective value.

[@darklazerx7913]

​@@ClayShentrup Subjective value is just price. Its talking about price, meaning its redundant to call it economic value when you just mean price. Evidently its just a theory made to dismiss the idea of economic value, because objective value theory is synonymous with all value theory, since subjective value theory is just saying price is price, while objective value theory is talking about an acual concept called value that is something else than price.

[@davec-1378]

Clay He’s not explaining a subjective value theory Why would it need mentioning?

[@florianfelix8295]

You could read David Graebers work on this -- toward an anthropological theory of value. It’s not covered as much as other books , but it is pretty much his entry work.

[@ClayShentrup]

John Green pretty well debunked some of the central aspects of his book debt the first 5000 years.

[@whatabouttheearth]

​@@ClayShentrup 😂 It's funny how so many low brained internet denizens constantly use the term "debunk" now instead of "critiqued". It's just fools acting like everything is a zero sum game because they're too lazy to analyze shit themselves.

[@thomasrivet5494]

And the value of this video? Very high. Thanks for the thorough and thoughtful explanation of the term, David. Welcome to Montreal ... the land of detours and construction. Charming, nonetheless. See you on the flip side!

[@JoyPrin5]

Mariana Mazzucato's book 'The Value of Everything: Making and Taking in the Global Economy provides a very detail explanation and description of the evolution of 'value', as well as the effects around it.

[@florianfelix8295]

I think Graeber is most interesting on this.

[@ClayShentrup]

there hasn't been an evolution. organisms have always had utility ("use value"), and markets create prices ("exchange value") via supply and demand equilibria. this is incredibly simple econ 101 material.

[@JoyPrin5]

@@ClayShentrup so have supply and demand equilibria explained why we keep encountering financial crisises? If the market work perfectly as the rule suggests, problems can be easily fixed. But the world does not work that way, so having a broader perspective beyond mainstream econ is essential.

[@ClayShentrup]

@@JoyPrin5 wow, where to even begin. You're talking about macroeconomic phenomena, which is influenced by a multitude of market failures, notably externalities and information asymmetry. market failures exist, and one of the major justifications for government is to address them. That doesn't mean that the way to address them is to create more market failures. You haven't cited any evidence that the mainstream research on financial crises is wrong. But more importantly, it's virtually irrelevant to the topic we're on, which is the definition of value.

[@JoyPrin5]

The point is that there is work beyond mainstream econ that get at the same issue around 'value'. I majored in econ myself, but over time realized how narrow the field is when it come to explaining reality. Pointing to so-called externalities is pure convenient and demonstrates how desperate mainstream econ right now, or Physics-wannabe as they called it. And I don''t feel the need to cite evidence although there is plenty just to argue with some random person on the internet like you who also I doubt is open enough to hear broader perspective.

[@fernandov1492]

Would you consider doing a follow up video on Menger's subjective theory of value?

[@ckpchaudhari]

It may be more appropriate to consider the concept of transubstantiation in the context of exchange value. In this framework, the physical matter remains constant while the underlying essence undergoes a transformation.

[@iridule]

not sure if this is a new type of video you’re doing, T&P, but videos under a theme are a great idea. keep up the good work!

[@detectiveofmoneypolitics]

Economic investigator Frank G Melbourne Australia is following this content cheers Frank

[@bhargavk1515]

I would like a pre-smithian view of value. Like how barter system was thought of? or even more abstract view of what value is in object sense. And even post Marxian idea. Like how super-rich people are truly worth?

[@sebleblan]

Welcome to Montreal!!

[@alamagoddystyle]

17:20 Value is Subjective to desirability.

[@rainerlippert]

From my point of view Value definition - working hypothesis Value reflects a quantified, abstract usefulness that must be recognized in a socially relevant way by exchanging it for a value equivalent and is assigned the same amount to the exchange goods. Causes of value are weighted needs for goods. These goods are produced, formed, shaped, designed, performed and provided with the help of paid human and machine labour, as well as parts of nature that are also used as labour. Value is formed in connection with the non-free availability of goods. The non-free availability has its roots in the paid workers who take care of the production and provision of the goods or in the ownership of these goods. Addition With the sale of their labor power, human workers acquire a right to means of subsistence. In the case of mechanical workers or the parts of nature that are used as workers, the owners or tenants must provide for their means of subsistence. The rights to means of subsistence correspond to the values of the labor force. Their entitlements to means of subsistence are proportionately linked to the products of work as a right to compensation. Likewise, ownership, e.g. of natural goods, lead to value relationships and thus to values (in Marx Rentiers) through the right to compensation when they are handed over. Through the value-equivalent exchange, these claims are more than completely (with added value - usual), completely or only partially compensated, whereby the exchange for a value equivalent leads to value formation in any case. Justification in brief The formation of value can be explained with Marx's theory of value, but not on the basis of its classical interpretation. * The classical interpretation of Marx's theory of value is flawed Marx assumes that value is created through production. Professor Heinrich sees things differently. Marx contradicts himself in Capital. Based on the value formula that Marx set up for the formation of value, one can see that value is formed on the market. * Value is a social relationship Such is formed between people and works only between people. Value is therefore not a singularity, but something two-sided. Something like that cannot be produced like a lamp. As a social relation, value must contain an objective element that goes beyond the individual and is objectively given to society. This is the common value that buyers and sellers agree on. In the bazaar this happens in dialogue, in the department store through the unilateral adaptation of the buyer to the buyer's specifications. If there is no common value, there will be no exchange - the purchase contract / invoice cannot contain a sales price and a different purchase price. The subjective parts of the value are the subjective reflections of the common value in the consciousness processes of the exchange partners. Before the exchange, these are usually different. In addition, the exchange itself is a subjective act. A quantity that shows the subjective value particularly clearly is the surplus value. This can neither be derived from the production costs nor from the working time or the like. Its size is estimated by suppliers and in many cases negotiated between producers and retail chains. * Value formula by Marx For Marx, value arises after W = c + v + s. W value c constant capital (buildings, raw materials, electricity, ancillary products, at Marx machines, etc.) v variable capital (in Marx only the human labor force) s surplus value Marx applies this formula to the production side of commodity society, since for him the market has no meaning for the formation of value. But there is still no surplus value on the production side. The buyer has to pay for the surplus value on the market. On the production side, there is only one expected surplus value. Since surplus value is part of value, there can only be one expected value. * Qualified value formula for the production side The value formula needs to be adjusted for the production side of commodity society: W|expected = c|cost factor, replacement expected + v|cost factor, replacement expected + s|expected. If the value were formed, as is supposed to be the case according to the classic interpretation of Marx's theory of value, then the buyer would only have to pay for the surplus value, because the costs c + v are already given. In reality, only a buyer in the market will pay the surplus value, if at all. But in order to be able to pay surplus value, he must first fully compensate the costs c + v. This means that the surplus value is not paid on the costs, but on the reimbursement of the costs. The value formula also needs to be adjusted for the market: W|real = c|cost replacing + v|cost replacing + s|real. Note: "Reimbursing costs" does not necessarily mean that the costs must be reimbursed in full. This makes it clear that the value does not arise directly with the work, i.e. the costs c + v, but only with the reimbursement of the costs. That happens in the market. This is also formulated by Marx (among other things, a product of labor only becomes a commodity when it becomes a use value for others through exchange; it is not the work directly performed that creates value, but the work that is socially necessary on average). * There is something right about Marx's formulation of the value formula The objective component of the value also includes the fact that on average the costs must be fully reimbursed with the sale of the products and an surplus value that the manufacturer considers sufficiently large must be paid if production is to be continued and expanded as far as possible. There is much more to say about Marx's theory of value.

[@marifkhan7054]

hi please What are the similarities and differences among adam smith, david ricardo and marx Labour theory of value?

[@sebastiancontreras2089]

Great video!

[@marifkhan7054]

What are the similarities and differences among adam smith, david ricardo and marx Labour theory of value?

[@jesseweideman4247]

LTV becomes true suddenly when workers start striking.

[@lizicadumitru9683]

Can these collapses not be the equalizers that Smith and Ricardo spoke of?

[@minerbroEDI]

You should cover value form theorists.

[@gwennygwen9768]

Can you expand on where and why you are moving? My tingle needs require me to inquire.

[@TheoryPhilosophy]

Montréal cause my partner got a job there

[@gwennygwen9768]

@@TheoryPhilosophy awesome thanks, I was hoping it wasnt to some remote location that would prevent you from continuing your videos, Godspeed

[@rebecca1517]

thank u king

[@36cmbr]

You are right, big topic. If you fail to perceive Smith and Ricardo accurately, there will be no need to read Marx. Wasn’t it Marx’s point that economics as theorized failed to understand the value of labor as a social class at all. Do I give Marx too much credit in thinking his work was a critique of an economic system that resulted in recurring wars? Communism is a philosophical system, I think, that suggested wealth creation without a proper consideration for the proletariat, slave, wage worker or wife would create insurmountable social inequalities and war. If that is not his conclusion, it should have been because that’s what has evolved. If Marx did not perceive those premises who can we give credit too; certainly, not Jesus. Jesus was not a proper philosopher, never totaled figures and by all accounts gave all the money to Caesar. So it was Marx whom successfully critiqued western ideas regarding wealth creation and maintenance. I’ll go listen to your Smith and Ricardo reviews, but I’ll be looking specifically at how either of those two colonizers valued labor if at all.

[@36cmbr]

@guttergrown was here Good luck sustaining that conclusion. Hegelian history was specifically rejected by Marx because it failed to explain and adequately indict causes of war. Political sophistry, clearly was failing to guide populations beyond war. Das Kapital challenges the old economics to change or devour itself. Marx did the math. We/U ignore the calculations at your peril.

[@12345wwww]

Value theory is vague, incorrect, and obsolete. Yet so many people still follow the classical economists down the gutter on this. Still, you explain well. Good job.

[@snocookies]

Excellent

[@Yomamaissoo]

I have a question. Let’s say I have a business that only relies on machines and I am still making profit. How would Marx explain this since there is no labor involved in it?

[@jtfernandes]

how is there no work? from the creation of machines, there is their maintenance and improvement, and everything else that is necessary for them to work, from energy to the materials with which the machines will work.

[@Yomamaissoo]

@@jtfernandes And what if they are automated?

[@anthonyesposito7]

​@@jtfernandes In that case I believe Marx would say that you would then have no variable capital and only constant capital being used for your business. Being that there is no variable capital there would be minimal surplus value generated since that primarily comes from the variable capital and the use of labor.

[@Alloballo123]

If the entire economy were automated there would be no economy, because there would be no consumers. How can you have consumers without workers making money.

[@raymondhartmeijer9300]

@@Yomamaissoo Profit is something that you pocket after the commodities have been to market and found a buyer. If your factory is fully automated, it means you don’t spend any money on wages, but you do have other costs, like electricity, monthly rent for the factory, maintainence costs if something’s broken, yet bc you can do without labour, your product will just have a value equal to those other costs. That should result in commodities with low value. But low value doesn’t necessarily means low price. If your product is popular, you might sell it for a high price, even though there’s little value embodied in them. It’s the same argument as buying machines to replace some workers, but now taken to the extreme

[@kugisaki-s9f]

very good

[@drydessert4198]

In practice, price has nothing to do with the resources that went into it (one of those resources being work). Price is only determined by demand versus cost (cost being resistance to purchase). Of course, value is something different than price. Calculating price based on labor is only necessary in a totalitarian system.

[@RithwikOfficial]

please add english captions

[@fazzzad]

legend

[@serenaguida9106]

i’ve started reading ricardo a few days ago, and i find it extremely interesting. it seems to me that the labour theory of value does not state at all that ‘labour is the source of value’, but rather that the only rule to describe the (virtual) proportions at which any good is exchanged for another is the proportion between the quantities of labour needed to produce the goods. what i find interesting is that i’m not really able to pin down the incompatibility with subjective theory of value when both are applied to the real world… (ultimately in competitive markets, prices should approximate costs, and it might make sense to think of cost proportions as proportions of labour -especially when you assume homogeneous wages, and allow for deviations due to variations in wages over time mediated by machinery).

[@secxybear6629]

Adam Smith definitely says that labor is the source of all value but seems not to present it the way it's presented here. From Adam it seems like he's saying that the costs of the inputs of labor will determine the costs of the outputs of labor - which is fairly straight forward. That's what the whole "cost of corn" thing is about. Adam is saying that laborers in England mostly eat corn so if the cost of corn goes up then the cost of labor will go up. This means that the productivity of agricultural land for growing corn has a big impact on the rents of the land. Again, pretty straight forward. For Adam, 'value' and 'exchange value' (prices) are very similar. He's explaining how we get prices from the labor that goes into a product - but clearly understands that things like scarcity cause the price to go up despite the fact that producing the scarce product may take the same amount of labor as producing the abundant one. Karl Marx is clearly doing something different. He tried to map labor onto objective reality in a concrete way. At the same time he's setting up a moral framework around labor. When Karl says that all value comes from labor he means that you can measure (moral) value directly by the amount of labor it took to make a thing. ie: 4 hours is worth 8 shillings, because it takes 4 hours to mine 8 shillings of silver. Therefore, if you spin yarn for 4 hours you should be paid 8 shillings - and being paid less is exploitative. He seems to flatten labor into hours and resists the idea that different labor can be worth different values and he uses the term "socially necessary" to patch over the glaring hole in the theory - namely, that the same hours of labor can produce very different quantities of the same material. The confusion in this video is that it takes Marx's ideas on labor theory and applies those ideas backward into Adam and possibly David Ricardo (which I haven't read). Karls makes a very big deal out of this theory to the point where his entire work rests on it. He makes many claims about labor with specific implications where Adam's work doesn't place nearly the same emphasis on it, nor make nearly as many claims about it. That said - I'm only part way through Adam's work - maybe that'll change. It's possible both authors are totally off the mark.

[@connorbrady5689]

That's the thing, there really isn't any incompatibility between the LTV and Marginal Utility- they describe different things, as you already explained. It's modern economics which has disparaged Marxian economics that has created the notion that the two are incompatible. It's like general relativity and quantum mechanics. Right now, to understand the universe as best we can, you need to use both models. They describe different things, but together they (imperfectly, but pretty damn well) describe reality.

[@connorbrady5689]

@@secxybear6629 "He seems to flatten labor into hours and resists the idea that different labor can be worth different values and he uses the term "socially necessary" to patch over the glaring hole in the theory - namely, that the same hours of labor can produce very different quantities of the same material." But then you missed Marx's analysis if this is your take away. Socially necessary labor time is the average time a commodity is produced in a society. Obviously any individual commodity may be produced in far far quicker or longer timeframes. But that's part of what makes capitalism so adaptive- see, if a firm is producing commodities at rates beyond the socially necessary labor time it takes to produce (be it from having extremely efficient workers, or, more likely, by having an innovative procedure, technique, or technology) which enhances labor productivity. This allows the firm to then garner more profits, as they sell the commodities for less than market value (because they were produced with fewer working hours, i.e. less labor). Then, the firm, enjoying greater profits, will increase its share of the market as consumers purchase its commodities at discount values. One of two things happen: the firm continues to grow uninterrupted and becomes a monopoly, buying out competing firms along the way and outfitting them with its processes, in which case the socially necessary labor time now is adjusted to the firm, while monopoly powers allow it to still maintain profit even as it no longer produces above par, OR, what most often happens, other firms will copy the innovation that allowed for the increased productivity, causing them to catch up after some amount of time, and the firm to return to normal rates of proft. And the race continues. "Different labor can be worth different values"? When you labor, you are working. While there are different forms of work, the universal, common denominator is that working takes time. Time is the fundamental unit of measure, it's the singular resource shared by everyone. It's time you spend that you never get back. I don't think Marx anywhere has stated that all labor is equivalent, merely that all labor, all of a working day, is spent at work. On the clock. As a worker for the capitalist. Also, that the amount of labor that goes into a product will be proportional to the cost of production, which will be (mostly) proportional in price. I don't see what the problem is here. Can you be more specific?

[@secxybear6629]

​@@connorbrady5689 "But then you missed Marx's analysis if this is your take away." I didn't miss it. "Socially necessary" really does do a TON of heavy lifting in this theory. Your description of 'socially necessary' labor is backward. Capitalism doesn't "produce beyond the socially necessary labor time it takes to produce". Capital lowers the socially necessary labor time by making work more efficient. As in, if its socially necesary to take an hour to make a widget and you invent a machine that means you now only need to spend 30 minutes to make a widget, then 30 minutes is now your socially necessary labor time. The point of this is that people who produce products nobody wants or who produce in a needless inefficient way are not doing 'socially necessary' work. Time is time, but time obviously isn't the only thing that matters. Marx flattens labor into exquivalence with the LTV. If its not all equivalent then the theory dies because it profit can be explained as a non-exploitative share of various values that go into labor value.

[@connorbrady5689]

@@secxybear6629 No, Smith and Ricardo flattened labor into equivalence with the LTV, which Marx was critiquing. His socially necessary labor time partly addresses it, and just because you don’t understand it doesn’t mean he didn’t. You’re literally criticizing the same things Marx did, just worse.

[@shimnakt955]

Thanks..

[@ClayShentrup]

there has never been any serious question about what value is. it has been solved since antiquity. first we have utility, which can be trivially observed via revealed preference lotteries. for instance if you are indifferent between a 60% chance at $5,000 versus a guarantee of $2,000, then they both give you equal utility. But every resource has its own decreasing marginal utility curve, as does wealth in general, and this is how we get prices, which are another representation of value ("exchange value") using common quantifiable units. these arise via flight and demand creating equilibrium prices. this is all econ 101.

[@TheoryPhilosophy]

So cute, Clay! Can't wait for you to take Econ 102!!

[@ClayShentrup]

@@TheoryPhilosophy please. econ 102 (macroeconomics) doesn't refute any fundamental principles of econ 101 (microeconomics). why do novices always make this dumb argument? and 102 certainly doesn't change the well-established concepts of utility or price. If you're going to make an argument, make the argument. invoking econ 102 makes you sound like a grade schooler. and for your information, I've worked an economic policy for over 17 years and had conversations with notable economists such as Nicholas Tideman and Kenneth Arrow. I'm friends with Max Ghenis, an economist who left a Google software engineering job to work on simulations of economic policy. you're out of your depth.

[@TheoryPhilosophy]

@@ClayShentrup lol clay I was making fun of you. Please stop making me laugh it hurts too much

[@ClayShentrup]

@@TheoryPhilosophyI mean, you might be trying to, but it just looks like you don't understand what econ 102 is, or revealed preference for that matter. If you think something I said was funny, that implies you think it's wrong. in which case you should try to cite the counter argument because I'm quite confident I have superior expertise in this field and will be able to refute that argument. but I see your background is in critical theory and social justice, not math or engineering, so I suspect that would be pretty challenging for you.

[@ClayShentrup]

oh your background is in "critical theory" and social justice, not math. that explains everything.

[@kikim6116]

Why do people who teach philosophy have to always say “but I’m not a Marxist” or “I’m not a Marxist douchebag”? Maybe if people teaching this stuff weren’t so defensive and afraid more people would take an interest. The irony of people so quivering would teach or explain the philosophy of someone so fearless would not be lost on Marx himself. This is a poverty of dignity.

[@alamagoddystyle]

4:11 Money is actually a commodity that functions as a "store of value" and "medium of exchange". Bitcoin fits into this definition well. and nothing has any intrinsic value, it's all subjective and perceived, and I think all lay people conceived it better than economists throughout history.

[@asoiaf.got.3048]

Im sorry but your example with the kardashian bottle is really bad and was actually clearly(not with this example obviously) adressed by marx what this example is is a monopol the bottle has the kardashian name on it and only these bottles can have this name on them cause their from the kardashians this means that these bottles have a monopol over other bottles so you can ask for a higher price for the kardashian bottle because its not in competition with the other bottles

[@justinmcclure6767]

I like how marx accurately criticizes existing thought but fails to provide any sustainable solutions to the problems. And then people hear the accurate remark and conflate it with the rest of what he had to say

[@legendaryblood1937]

You get the answer from the modern marxists. But unfortunately you can't because the world especially in Capitalist countries doesn't want you to😂

[@bubblegumgun3292]

you cant talk about value without the Rothbardian ancap philosophy ,in this anarcho capitalism/free market anarchism grounds itself to what is fundamental and ultimate. supply and demand is law that stems from a Mind which means its above the universe because in the causal chain creation presupposes order and order presupposes a chaotic mind having a demand

[@deleuzeional]

rothby mid 🥱

[@michael511128]

I cannot understand you.

[@groupflix]

That he says "Paper Money" shows that this person is a complete ignoramus on the subject. Ignore.