Historically and logically, capitalism

[Pinko]

is tied to the private ownership of the means of production, which allows private appropriation of produced commodities, thus private appropriation of surplus-value, and thus private accumulation of capital. It is surely not accidental that the 'rights of private property' are thus at the bottom of the whole constitutional and juridical superstructure which centuries of law-making have erected upon the basis of commodity production.

But what we confront when we examine the social relations which lie behind these juridical forms is, of course, something which is not simply formal private property; otherwise the analysis would be reduced to simple tautology. When Marx states that commodity production is only possible because social labour has been fragmented into private labours conducted independently from each other, he refers to a socioeconomic and not a juridical reality; the latter is only a reflection - and sometimes a very imperfect onel - of the former. What capitalism is about, then, is a specific relation between wage-labour and capital, a social organization in which social labour is fragmented into firms independent of each other, which take independent decisions about investment, prices and forms of financing growth, which compete with each other for shares of markets and profits (of the total surplus-value produced by productive labour in its totality), and which therefore buy and exploit wage-labour under specific economic conditions, compulsions and consents. It is not simply a general relationship between 'producers' and 'accumulators' or 'producers' and 'administrators', for such a relationship is in the last analysis characteristic of all class societies and not specific to capitalism at all.

The content of the economic institution of private capital is therefore the independent firm (whether a small manufacturer or a giant multi-national corporation). Whether the juridicial form strictly conforms to that content or not is irrelevant, and often poses complex legal problems. Are stockholders only owners of income titles, or are they owners of fractions of the firm's 'assets' or 'property'?

The bankruptcy laws - which differ in different capitalist countries - can go into the most sophisticated nuances imaginab1e on this subject. But the vital economic decisions (key investment decisions, for example) are taken by all those firms which are really independent and not subordinate companies. The basic fact of life of the capitalist economy is the fact that these vital decisions are not taken by society as a whole or by the 'associated producers'..

Again, the content of this economic institution of private property (fragmented social labour) should not be confused with the question of the precise agents who take the independent firms' decisions. Whether those who take the decisions are individual owners, or representatives of stockholders, or so-called managers, does not in the least change the fact that they are working under the same previously analysed economic compulsion. Some economists today, such as Galbraith and even some Marxists, contend that the contemporary giant corporation has largely freed itself from these contradictions. This is an illusion, born of an extrapolation from conditions prevailing during a rather lengthy boom. In fact, the idea that any giant corporation, whatever its dimensions or power, could emancipate itself definitively from the compulsion of (monopolistic) competition, that is, could have a guaranteed specific demand for its products, independently of the trade cycle and from technological innovation, could make sense only if it were insulated both from economic fluctuations and from economic uncertainty, that is if the very nature of its output as commodity production was denied. Experience does not confirm such a contention.

The basic distinction which Galbraith, following Baumol, Kaysen and others, introduces between compulsion to profit maximization (true for yesterday's firms) and compulsion to growth maximization (true for today's corporations), becomes devoid of practical long-term significance once we understand that growth remains essentially a function of profit, that capital accumulation can result in the last analysis only from surplus value production and realization.

The only kernel of truth which remains, then, is the difference between short-term and long-term profit maximization, which is indeed one of the basic differences between competitive capitalism and monopoly capitalism.

The debate on the nature of capital has received a new and significant impetus with the 'internal' critique of the theory of the marginal productivity capital by Piero Sraffa and the Cambridge school. The latter have demonstrated convincingly that the measurement of capital inputs in the neoclassical 'production function' is based upon circular reasoning. For if the effect of marginal increases or decreases of capital inputs upon output has to be measured, this can only be done in money terms, given the heterogeneous nature of so-called 'capital goods'. 'But this process of pricing or valuation old capital inputs presupposes a rate of return on the plant and equipment in question, of which the latter value is the capitalization'; that is 'one has to assume a rate of interest in order to demonstrate how this equilibrium rate of return is determined', The way out, obviously, is to look for a common substance in all the 'capital goods' independent of money, that is to return to socially necessary labour as the measurable substance of the value of all commodities. - Ernest Mandel, introduction to Capital Volume 1, 1976.


[size=10pt]

[b]SECTION 1
THE TWO FACTORS OF A COMMODITY: USE-VALUE AND VALUE
(THE SUBSTANCE OF VALUE AND THE MAGNITUDE OF VALUE)

The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,”[1] its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity.

A commodity is, in the first place, an object outside us, a thing that by its properties satisfies human wants of some sort or another. The nature of such wants, whether, for instance, they spring from the stomach or from fancy, makes no difference.[2] Neither are we here concerned to know how the object satisfies these wants, whether directly as means of subsistence, or indirectly as means of production.

Every useful thing, as iron, paper, &c., may be looked at from the two points of view of quality and quantity. It is an assemblage of many properties, and may therefore be of use in various ways. To discover the various uses of things is the work of history.[3] So also is the establishment of socially-recognized standards of measure for the quantities of these useful objects. The diversity of these measures has its origin partly in the diverse nature of the objects to be measured, partly in convention.

The utility of a thing makes it a use value.[4] But this utility is not a thing of air. Being limited by the physical properties of the commodity, it has no existence apart from that commodity. A commodity, such as iron, corn, or a diamond, is therefore, so far as it is a material thing, a use value, something useful. This property of a commodity is independent of the amount of labour required to appropriate its useful qualities. When treating of u

se value, we always assume to be dealing with definite quantities, such as dozens of watches, yards of linen, or tons of iron. The use values of commodities furnish the material for a special study, that of the commercial knowledge of commodities.[5] Use values become a reality only by use or consumption: they also constitute the substance of all wealth, whatever may be the social form of that wealth. In the form of society we are about to consider, they are, in addition, the material depositories of exchange value.

Exchange value, at first sight, presents itself as a quantitative relation, as the proportion in which values in use of one sort are exchanged for those of another sort,[6] a relation constantly changing with time and place. Hence exchange value appears to be something accidental and purely relative, and consequently an intrinsic value, i.e., an exchange value that is inseparably connected with, inherent in commodities, seems a contradiction in terms.[7] Let us consider the matter a little more closely.
http://www.marxists.org/archive/marx...c1/ch01.htm#S1

Reading Marx’s Capital with David Harvey
A close reading of the text of Karl Marx’s Capital, Volume I.
http://davidharvey.org/

[Pinko]

Now, what is "Value?"

Value, in the economic sense not the comparison shopping one, comes from the addition of human labor to raw materials. Nothing has value that does not have within it congealed human labor. While you might find, especially in one of the reveries Mike's farming-related posts can put on you, that the purple mountain majesty and all that jazz have 'value,' the fact is they are merely raw materials. There is no using going on and no value being created until a person comes along to sling some labor on said land.

In terms of economic history, Marx expounded on the Labor Theory of Value to show that according to the Labor Theory of Value (which was the theory of value that was used by Thomas Hobbes, John Locke, Adam Smith, David Ricardo, etc - at least that's what Anaxarchos tells me...) capitalists (owners of the means of production) exploit workers by depriving them of value that workers themselves create. According to Marx, profit is the difference between the value that the worker has created and the wage that the worker receives from his employer.

Once Marx firmly established this principle, the Labor Theory of Value was criticized and abandoned by supporters of capitalism. It is from here that you can commence your most vicious criticism of bourgeois economics; they threw out the science because, at its fullness, it condemns their ideas to the hateful rubbish they all are.

OK. So value emanates from the efforts of mankind. What next?

Well, take a brief aside to contemplate that the Walton family has more wealth than the bottom 140 million people in this nation state. This is important. Just pause and think on it for a second.

Bearing that in mind, please bother to drill down a little farther and to absorb the rest of this fundament of political economy, "value." Your enemies have.

In earlier periods of human social relations, products were created by human labor but not under capitalist conditions. What does this mean? They were created to be used, not exchanged on the 'market.'

So when a person made something back in the day, even if he wasn't going to use it himself (instead perhaps tossing it into the kitty of his family/social group) he was creating for use, not exchange.

Now as time goes by and man's abilities improve so too do the products of his labor, both in quality and variety. Soon enough comes the time when folks begin to trade among these more numerous products. Even then, the products of labor may not have this character of being produced for exchange. If Mike grows too many pears one season, he may elect to give some to his fellows rather than letting the entire surplus return to the soil (still a good use of his labor). That don't mean he raised pears for exchange; it just means he is effective at his labor and - unlike most folks today - his "human nature" is not wholly oriented towards Randian selfishness.

Some more time goes by and, with it, more products appear on the scene as mankind improves its lot through labor. Eventually people produce enough pears and other goods through labor that they almost always have excess over what they need to use. Consequently, trade emerges as people swap their unusable values (the excess is not usable by the producer who already has all he wants of his own produce, right?) for other products of labor that can be used.

Then what do you suppose happens? If the scene above plays out several times for Mike and his copious pears, it should come as little surprise that one day he has the revelation that he can intentionally labor to produce more pears than he needs, knowing full well he can swap the excess he won't use for some products he will use, say for instance canning jars and a pressure cooker to put up produce for the winter.

Do the excess products he won't use fail to have value merely because he doesn't need or want to use them?

Of course not. They have a value; one would however be safe in assuming that these products' values are not use-values, at least not for Mike. So what are these products made for that are over and above Mike's needs?

Exchange.

Products intentionally produced for exchange have exchange-values, at least in Mike's eyes. Why is an exchange-value different than a use value? I'll leave that for discussion down thread. But take note that the two need not be - are are not often - the same things.

So when you were earlier discussing the OP, I could not help but see these comments leap off the page for want of their own discussion:


Kid writes:

My contention is that value originates from labor and has an existence independent of exchange and circulation of commodities, which is the precise OPPOSITE of how a given individual capitalist is obligated to look at the world. Its in the job description really..

That gets us back to asking what the "scheme" is, who's orchestrating it, and why do pieces of green paper have "value" in the first place?

TBF responds:

Yes, that is the part that is interesting to me - how we define "value" and more importantly who defines it.

I think we've perhaps scratched the surface of value in the paragraphs above. So another definition - what is a product created specifically for exchange rather than for use?

We'll let this guy answer (pic posted since Diego Rivera got a bad rap earlier):


A commodity is, in the first place, a thing that satisfies a human want; in the second place, it is a thing that can be exchanged for another thing. The utility of a thing makes is a use-value. Exchange-value (or, simply, value), is first of all the ratio, the proportion, in which a certain number of use-values of one kind can be exchanged for a certain number of use-values of another kind.

Daily experience shows us that millions upon millions of such exchanges are constantly equating with one another in every kind of use-value, even the most diverse and incomparable. Now, what is there in common between these various things which are constantly equated with one another in a definite system of social relations?

Their common feature is that they are products of labour. In exchanging products, people equate with one another the most diverse kinds of labour. The production of commodities is a system of social relations in which individual producers create diverse products (the social division of labour), and in which all these products are equated with one another in the process of exchange.

Consequently, what is common to all commodities is not the concrete labour of a definite branch of production, not labour of one particular kind, but abstract human labour – human labour in general. All the labour power of a given society, as represented in the sum total of the values of all commodities, is one and the same human labour power. Thousands upon thousands upon millions of exchanges prove this.

As a result, each particular commodity represents only a certain share of the socially necessary labour time. The magnitude of value is determined by the amount of socially necessary labour, or by the labour time that is socially necessary for the production of a given commodity, of a given use-value.
http://www.marxists.org/glossary/terms/v/a.htm#value

It is indescribably important that one at least have a vague grasp of these concepts, most especially if squeamish about the matter of private property. It is a leap outside of al

l that we are brainwashed and propagandized to understand for a person to shuck the idea of property, accumulation, etc. It is what we are.

Taken from earlier thread: http://socialistindependent.org/boar...php?topic=12.0

[Kid of the Black Hole]

I was going to ask you if your reference to David Harvey was his classroom videos. I listened to most of them..I found it was easier just to do the audio. I took some notes, but don't remember much of what I thought about it.

I do know that I don't really think Harvey is the ideal guy to teach Capital, and I think the most relevant parts can be taught in a more straightforward fashion. I wouldn't discourage anyone from reading the whole book, but I don't know how urgent it is.

[Pinko]

I was going to ask you if your reference to David Harvey was his classroom videos.

Funny you should say that about reading the whole book. Harvey says just the opposite in Class One.

I am listening to the classes, still only Chapter 1 for maybe the third time now. I am in Chapter 7 in the book, that still very slow as I probably don't even read it once a week. When I do though, I read and reread pretty often. This was especially true in the first three or four chapters.

And, as Anax has urged, the first ~90 pages really give us the fundamentals that are transformative to one's way of thinking about political economy. I do intend to read the entirety though; and it is becoming an easier read - except for getting derailed by going to read up on one of the many, many wide ranging footnotes every now and again.

I travel a fair little bit these days; just yesterday, I loaded up nearly every one of Harvey's mp3s into my phone/pod thing. 16g micro SD card in there. Damn, it amazes me that my phone is 8x as big as my my first serious PC --> I am officially getting old. I'll be red road tripping next week and should come close to catchin' up with the audio courses to where I am in the text.

I think Harvey is a fine prof. You should surf over there for "financial katrina" and "the enigma of capitalism" - they're good stuff.

[Kid of the Black Hole]

This is a tangent, and I promised Anax to be on best behavior, but Mandel is full of fucking shit. This is what Anax means when he says "knowing" Marx doesn't necessarily mean dick and it is also a case of how reading the first 3 or 4 pages of the Manifesto can dispel untold amounts of cobwebs, gloom and accretions surrounding the subject

Historically and logically, capitalism is tied to the private ownership of the means of production, which allows private appropriation of produced commodities, thus private appropriation of surplus-value, and thus private accumulation of capital. It is surely not accidental that the 'rights of private property' are thus at the bottom of the whole constitutional and juridical superstructure which centuries of law-making have erected upon the basis of commodity production.

Historically and logically, CLASS SOCIETY is tied to the private ownership of the means of production.

Honestly, that whole passage/introduction makes me want to take a blunt object to his dick until it falls off.

[Pinko]

Historically and logically, capitalism is tied to the private ownership of the means of production, which allows private appropriation of produced commodities, thus private appropriation of surplus-value, and thus private accumulation of capital. It is surely not accidental that the 'rights of private property' are thus at the bottom of the whole constitutional and juridical superstructure which centuries of law-making have erected upon the basis of commodity production.

Historically and logically, CLASS SOCIETY is tied to the private ownership of the means of production.

A little farther down in the passage:

What capitalism is about, then, is a specific relation between wage-labour and capital, a social organization in which social labour is fragmented into firms independent of each other, which take independent decisions about investment, prices and forms of financing growth, which compete with each other for shares of markets and profits (of the total surplus-value produced by productive labour in its totality), and which therefore buy and exploit wage-labour under specific economic conditions, compulsions and consents. It is not simply a general relationship between 'producers' and 'accumulators' or 'producers' and 'administrators', for such a relationship is in the last analysis characteristic of all class societies and not specific to capitalism at all.

I think it would be quite a leap to accuse Mandel of being anything less than a full fledged expert. In any case though, consider the intention and the audience. The intention is to discuss capital, class society being relevant but not central. And, as for the audience, this is the introduction to the book - a commentary for readers who do not begin to know as much as you do about the topic or philosophy in general.

[Kid of the Black Hole]

Historically and logically, capitalism is tied to the private ownership of the means of production, which allows private appropriation of produced commodities, thus private appropriation of surplus-value, and thus private accumulation of capital. It is surely not accidental that the 'rights of private property' are thus at the bottom of the whole constitutional and juridical superstructure which centuries of law-making have erected upon the basis of commodity production.

Historically and logically, CLASS SOCIETY is tied to the private ownership of the means of production.

A little farther down in the passage:

What capitalism is about, then, is a specific relation between wage-labour and capital, a social organization in which social labour is fragmented into firms independent of each other, which take independent decisions about investment, prices and forms of financing growth, which compete with each other for shares of markets and profits (of the total surplus-value produced by productive labour in its totality), and which therefore buy and exploit wage-labour under specific economic conditions, compulsions and consents. It is not simply a general relationship between 'producers' and 'accumulators' or 'producers' and 'administrators', for such a relationship is in the last analysis characteristic of all class societies and not specific to capitalism at all.

I think it would be quite a leap to accuse Mandel of being anything less than a full fledged expert. In any case though, consider the intention and the audience. The intention is to discuss capital, class society being relevant but not central. And, as for the audience, this is the introduction to the book - a commentary for readers who do not begin to know as much as you do about the topic or philosophy in general.

But it is written in expert-ese not for the lay reader and virtually all of it is chock full of Mandel's own theoretical "finesses", which not coincidentally are all crap. The only thing he is a full-fledged expert in is jacking himself off..IMO

EDIT: I will state my reason for bringing this up. It seems to me that anyone approaching that piece by Mandel without a fairly strong background will be pretty much overwhelmed by it and probably turned off on the assumption that Capital is a work to help you achieve that same type of "erudition".

So calling a pencil-neck out for what he is strikes me as a way to defuse that obstacle in advance. Just start with Chapter I and ignore all of that self-involved jazz..again, IMO.

[Pinko]

Skilled labour counts only as simple labour intensified, or rather, as multiplied simple labour, a given quantity of skilled being considered equal to a greater quantity of simple labour. Experience shows that this reduction is constantly being made.

Dullard that I am, I took this as a priori, and this despite his reference to experience.

So, what is the experience left unmentioned?

Will you expound some on this problem, Anax?

[Pinko]

The assertion that labor is the sole determinant of value is hard to accept just based upon common sense and experience. The assertion that only labor gives an object value ignores the fact that many natural objects in which no labor has been invested – such as scenic views, pure water, gems and minerals, and wild fruits and vegetables – have economic value. Also the labor theory cannot by its nature account for the fact that people value some natural objects, such as diamonds, tremendously more than other natural objects, such as leaves.

The labor theory of value also fails to take into account changing consumer desires and the contextual nature of value. In a horse-and-buggy culture, horse-shoes are tremendously valuable commodities, but in a society without horses they are virtually useless. Similarly in a society with much leisure time, games and recreational facilities become important, but in a subsistence economy in which people must work nearly continuously just to stay alive, such things may actually have negative value.

The labor theory also ignores the importance of time and position. A 20-year-old wine and properly-aged beef are far more enjoyable than one-year-old wine and unaged beef. Oil in a desert is a potentially valuable resource, but oil in the local reservoir or in the middle of a farmer's field is a hazard.

Perhaps the most grievous theoretical fault with the labor theory is that it ignores what economists call time preference. Time preference is the common strong preference for goods and services here and now, rather than later. Present consumption is more valuable than future consumption.

For example, most workers prefer to be paid when their work is completed rather than when their products are sold – which may be months later. For workers to be paid now, rather than later, someone must advance their wages, and clearly this service has a value. But proponents of the labor theory would have it both ways: workers are to receive the full future value of their product now.

The final theoretical failure of the labor theory of value is the value-effort fallacy. It is folly to assume that all effort produces value. Every day each of us wastes time on fruitless efforts. To equate labor with the automatic creation of value is to fallaciously imply that all human effort is infallible and constantly productive.
Absurdities Of The Labor Theory

The labor theory is even more absurd in practice. If all value is derived from labor, and entrepreneurial effort is "parasitic", who would bother to invest the time and money necessary to build factories, plan product development or organize a production process? If all profits are "exploitation", what incentive does anyone have to risk money on a new and untried product or service? Where will the money come from to finance new investment in tools?

Communist countries have not abolished profits. They have merely transferred all profits to the state, which typically uses them to build a huge military apparatus at the expense of consumer production.

The labor theory of value is violently anti-consumer by its nature. Under this theory, sellers are compelled to price all goods by the amount of labor that goes into them, rather than how much they are demanded by consumers. Thus stores could charge no more for an aged foreign wine than for a local cheap wine (given equal labor input) or more for the work hacked out by a beginner. This inevitably produces a surplus of unskilled and shoddy work, and a shortage of skilled work – which is exactly the situation that exists in communist countries.

The labor theory also means the end of all economic freedom. Engels, Marx's disciple, wrote: "For a pure Marxist society to long endure, voluntary exchange between individuals must be abolished." In a communist society you produce what the rulers tell you and consume what scraps they allow you. If you don't like this, you are of course free to relocate – to a slave labor camp.
Methodological Fallacies

The most interesting fallacies of the labor theory of value are methodological. Labor theory arose from two extremely poor methods of economic research. First it attempted to establish economic laws of exchange by examining only supply – ignoring demand entirely.

Even worse, the entire labor theory is unproven. In the entire first volume of Das Capital, where Marx proposed the labor theory, there is not one "positive proof". Rather Marx offers a fallacious "negative proof" in which he argues:

Premise 1: Some factor in the production of a good gives it value. TRUE;

Premise 2: Only those goods to which man has applied labor have value. FALSE;

Procedure: Examine all the factors producing a good by discarding those which did not create equal value in equal quantity, and end up with one factor – Labor. ARBITRARY;

Conclusion: Labor must be the source of value. FALSE.

Marx promised to provide a positive proof in the Volume 3 of Das Capital. However, that book does not offer a positive proof, and implicitly refutes one. Marx proclaims that two types of capital exist in production, only one of which can produce "surplus value". Thus exchange of items of equal value can have uneven mixtures of these two types of capital, implying that labor alone is not the sole determinant of value.
http://www.isil.org/resources/lit/labor-theory-val.html

I see misunderstandings and outright lies in this, but I do think it important that one test the validity of the LTV before setting out for a deeper grasp of what Marx had to say about capital.

[anaxarchos]

The assertion that labor is the sole determinant of value is hard to accept just based upon common sense and experience. The assertion that only labor gives an object value ignores the fact that many natural objects in which no labor has been invested – such as scenic views, pure water, gems and minerals, and wild fruits and vegetables – have economic value. Also the labor theory cannot by its nature account for the fact that people value some natural objects, such as diamonds, tremendously more than other natural objects, such as leaves.

The labor theory of value also fails to take into account changing consumer desires and the contextual nature of value. In a horse-and-buggy culture, horse-shoes are tremendously valuable commodities, but in a society without horses they are virtually useless. Similarly in a society with much leisure time, games and recreational facilities become important, but in a subsistence economy in which people must work nearly continuously just to stay alive, such things may actually have negative value.

The labor theory also ignores the importance of time and position. A 20-year-old wine and properly-aged beef are far more enjoyable than one-year-old wine and unaged beef. Oil in a desert is a potentially valuable resource, but oil in the local reservoir or in the middle of a farmer's field is a hazard.

Perhaps the most grievous theoretical fault with the labor theory is that it ignores what economists call time preference. Time preference is the common strong preference for goods and services here and now, rather than later. Present consumption is more valuable than future consumption.

For example, most workers prefer to be paid when their work is completed rather than when their products are sold – which may be months later. For workers to be paid now, rather than later, someone must advance their wages, and clearly this service has a value. But proponents of the labor theory would have it both ways: workers are to receive the full future value of their product now.

The final theoretical failure of the labor theory of value is the value-effort fallacy. It is folly to assume that all effort produces value. Every day each of us wastes time on fruitless efforts. To equate labor with the automatic creation of value is to fallaciously imply that all human effort is infallible and constantly productive.
Absurdities Of The Labor Theory

The labor theory is even more absurd in practice. If all value is derived from labor, and entrepreneurial effort is "parasitic", who would bother to invest the time and money necessary to build factories, plan product development or organize a production process? If all profits are "exploitation", what incentive does anyone have to risk money on a new and untried product or service? Where will the money come from to finance new investment in tools?

Communist countries have not abolished profits. They have merely transferred all profits to the state, which typically uses them to build a huge military apparatus at the expense of consumer production.

The labor theory of value is violently anti-consumer by its nature. Under this theory, sellers are compelled to price all goods by the amount of labor that goes into them, rather than how much they are demanded by consumers. Thus stores could charge no more for an aged foreign wine than for a local cheap wine (given equal labor input) or more for the work hacked out by a beginner. This inevitably produces a surplus of unskilled and shoddy work, and a shortage of skilled work – which is exactly the situation that exists in communist countries.

The labor theory also means the end of all economic freedom. Engels, Marx's disciple, wrote: "For a pure Marxist society to long endure, voluntary exchange between individuals must be abolished." In a communist society you produce what the rulers tell you and consume what scraps they allow you. If you don't like this, you are of course free to relocate – to a slave labor camp.
Methodological Fallacies

The most interesting fallacies of the labor theory of value are methodological. Labor theory arose from two extremely poor methods of economic research. First it attempted to establish economic laws of exchange by examining only supply – ignoring demand entirely.

Even worse, the entire labor theory is unproven. In the entire first volume of Das Capital, where Marx proposed the labor theory, there is not one "positive proof". Rather Marx offers a fallacious "negative proof" in which he argues:

Premise 1: Some factor in the production of a good gives it value. TRUE;

Premise 2: Only those goods to which man has applied labor have value. FALSE;

Procedure: Examine all the factors producing a good by discarding those which did not create equal value in equal quantity, and end up with one factor – Labor. ARBITRARY;

Conclusion: Labor must be the source of value. FALSE.

Marx promised to provide a positive proof in the Volume 3 of Das Capital. However, that book does not offer a positive proof, and implicitly refutes one. Marx proclaims that two types of capital exist in production, only one of which can produce "surplus value". Thus exchange of items of equal value can have uneven mixtures of these two types of capital, implying that labor alone is not the sole determinant of value.
http://www.isil.org/resources/lit/labor-theory-val.html

I see misunderstandings and outright lies in this, but I do think it important that one test the validity of the LTV before setting out for a deeper grasp of what Marx had to say about capital.

Sorry, dude but the above is simple ignorant gibberish. There is an entire economic literature which attempts to refute the labor theory of value. In fact, it can be argued that neo-classical economics exists for the sole purpose of refuting, or more often, ignoring or bypassing the Labor Theory of Value. Unfortunately, the piece of shit above is not a part of that literature.

Not everything that everyone says requires "refutation"... Some things require a <belch>.

[anaxarchos]

What capitalism is about, then, is a specific relation between wage-labour and capital, a social organization in which social labour is fragmented into firms independent of each other, which take independent decisions about investment, prices and forms of financing growth, which compete with each other for shares of markets and profits (of the total surplus-value produced by productive labour in its totality), and which therefore buy and exploit wage-labour under specific economic conditions, compulsions and consents. It is not simply a general relationship between 'producers' and 'accumulators' or 'producers' and 'administrators', for such a relationship is in the last analysis characteristic of all class societies and not specific to capitalism at all.

I think it would be quite a leap to accuse Mandel of being anything less than a full fledged expert. In any case though, consider the intention and the audience. The intention is to discuss capital, class society being relevant but not central. And, as for the audience, this is the introduction to the book - a commentary for readers who do not begin to know as much as you do about the topic or philosophy in general.

I think it is entirely fair to call Mandel a full fledged expert. Trouble is that he was also a full fledged Trotskyite who kept slipping his own bullshit into the narrative. Consider this part of your quote above:

"It is not simply a general relationship between 'producers' and 'accumulators' or 'producers' and 'administrators', for such a relationship is in the last analysis characteristic of all class societies and not specific to capitalism at all."

Say what? "Producers" versus "administrators"? WTF is dat? Do you smell "New bureaucratic class", yabada yabada?

Fucker was infuriatin'...

[Kid of the Black Hole]

Skilled labour counts only as simple labour intensified, or rather, as multiplied simple labour, a given quantity of skilled being considered equal to a greater quantity of simple labour. Experience shows that this reduction is constantly being made.

Dullard that I am, I took this as a priori, and this despite his reference to experience.

So, what is the experience left unmentioned?

Will you expound some on this problem, Anax?

You're reading too much into it I think. I don't think he is saying that an empirical proof of the idea is necessary so much as stating the obvious that skilled labour receives a higher wage than unskilled.

[Pinko]

You're reading too much into it I think. I don't think he is saying that an empirical proof of the idea is necessary so much as stating the obvious that skilled labour receives a higher wage than unskilled.

Nope. Money, let alone wages, are not yet introduced to the analysis.

[Kid of the Black Hole]

You're reading too much into it I think. I don't think he is saying that an empirical proof of the idea is necessary so much as stating the obvious that skilled labour receives a higher wage than unskilled.

Nope. Money, let alone wages, are not yet introduced to the analysis.

That is basically how Engels explains it in Anti-Duhring talking about the passage you quoted

[Pinko]

That is basically how Engels explains it in Anti-Duhring talking about the passage you quoted

It doesn't read that way to me, although it does make feel somewhat better about having taken the passage for granted before having heard Harvey say it was a point of contention among Marxists.

But let us look a little more closely at the doctrine of equality in values. All labour-time is entirely equal in value, the porter's and the architect's. So labour-time, and therefore labour itself, has a value. But labour is the creator of all values. It alone gives the products found in nature value in the economic sense. Value itself is nothing else than the expression of the socially necessary human labour materialised in an object. Labour can therefore have no value. One might as well speak of the value of value, or try to determine the weight, not of a heavy body, but of heaviness itself, as speak of the value of labour, and try to determine it. Herr Dühring dismisses people like Owen, Saint-Simon and Fourier by calling them social alchemists {D. K. G. 237}. His subtilising over the value of labour-time, that is, of labour, shows that he ranks far beneath the real alchemists. And now let the reader fathom Herr Dühring's brazenness in imputing to Marx the assertion that the labour-time of one person is in itself more valuable than that of another {500}, that labour-time, and therefore labour, has a value—to Marx, who first demonstrated that labour can have no value, and why it cannot!
For socialism, which wants to emancipate human labour-power from its status of a commodity, the realisation that labour has no value and can have none is of great importance. With this realisation all attempts — inherited by Herr Dühring from primitive workers' socialism — to regulate the future distribution of the necessaries of life as a kind of higher wages fall to the ground And from it comes the further realisation that distribution, in so far as it is governed by purely economic considerations, will be regulated by the interests of production, and that production is most encouraged by a mode of distribution which allows all members of society to develop, maintain and exercise their capacities with maximum universality. It is true that, to the mode of thought of the educated classes which Herr Dühring has inherited, it must seem monstrous that in time to come there will no longer be any professional porters or architects, and that the man who for half an hour gives instructions as an architect will also act as a porter for a period, until his activity as an architect is once again required. A fine sort of socialism that would be—perpetuating professional porters!
If the equality of value of labour-time. means that each labourer produces equal values in equal periods of time, without there being any need to take an average, then this is obviously wrong. If we take two workers, even in the same branch of industry, the value they produce in one hour of labour-time will always vary with the intensity of their labour and their skill—and not even an economic commune, at any rate not on our planet, can remedy this evil—which, however, is only an evil for people like Dühring. What, then, remains of the complete equality of value of any and every labour? Nothing but the purely braggart phrase, which has no other economic foundation than Herr Dühring's incapacity to distinguish between the determination of value by labour and determination of value by wages—nothing but the ukase, the basic law of the new economic commune: Equal wages for equal labour-time! Indeed, the old French communist workers and Weitling had much better reasons for the equality of wages which they advocated.
How then are we to solve the whole important question of the higher wages paid for compound labour? In a society of private producers, private individuals or their families pay the costs of training the qualified worker; hence the higher price paid for qualified labour-power accrues first of all to private individuals: the skilful slave is sold for a higher price, and the skilful wage-earner is paid higher wages. In a socialistically organised society, these costs are borne by society, and to it therefore belong the fruits, the greater values produced by compound labour. The worker himself has no claim to extra pay. And from this, incidentally, follows the moral that at times there is a drawback to the popular demand of the workers for "the full proceeds of labour".