Marxist Theory of Value versus Utility

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Classical Liberal
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In this video I show the differences between the Labour theory of value and the subjective utility theory of value.

In the next video I iron out the merits of the subjective theory more clearly.
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miltcho
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Marx writes about use value and exchange value (something like price, when the piece of exchange is money) as inherent merchandises' properties. However, he arguments that the first one, the use value, the subjective dimension of goods, cannot be the value's fondament because of clear empirical evidences; pencils are cheaper than diamonds, Picassos' paintings are more expensive than tables...

In the other hand, he concludes that is the average human necessary work which makes oscilate exchange value. Why? Because, at first, he has solid examples again: prices decreasing after industrial revolution, differences between wood's and gold's cost... and he knows the capitalist tendence to sell things the closest as posible to its value. Every capitalist needs to sell his merchandises as cheaper as he can whenever there are other capitalists in the market, but not that cheap that he cannot invest in machines, technology and so on.

I think that it's not difficult to see which one is, at least by these steps, a stronger theory.
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JacobW
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(Original post by miltcho)
Marx writes about use value and exchange value (something like price, when the piece of exchange is money) as inherent merchandises' properties. However, he arguments that the first one, the use value, the subjective dimension of goods, cannot be the value's fondament because of clear empirical evidences; pencils are cheaper than diamonds, Picassos' paintings are more expensive than tables...

In the other hand, he concludes that is the average human necessary work which makes oscilate exchange value. Why? Because, at first, he has solid examples again: prices decreasing after industrial revolution, differences between wood's and gold's cost... and he knows the capitalist tendence to sell things the closest as posible to its value. Every capitalist needs to sell his merchandises as cheaper as he can whenever there are other capitalists in the market, but not that cheap that he cannot invest in machines, technology and so on.

I think that it's not difficult to see which one is, at least by these steps, a stronger theory.
Marginality. Picasso's paintings are more expensive than pencils because the utility provided by the marginal painting is more than that of the marginal pencil. Doesn't mean the average Picasso provides more utility than the average table (it doesn't).
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miltcho
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(Original post by JacobW)
Marginality. Picasso's paintings are more expensive than pencils because the utility provided by the marginal painting is more than that of the marginal pencil. Doesn't mean the average Picasso provides more utility than the average table (it doesn't).
My brother's painting are so far more marginal, and they are not that expensive... My noises on computer are more marginal than Dylan's music and it couldn't be expensive either.

Aristotle's theorems are so useful, and they are just free.
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(Original post by miltcho)
My brother's painting are so far more marginal, and they are not that expensive... My noises on computer are more marginal than Dylan's music and it couldn't be expensive either.

Aristotle's theorems are so useful, and they are just free.
Gah? No good or service is inherently "more marginal" than any other. The marginal utility of something is the utility produced by one additional unit of it. http://en.wikipedia.org/wiki/Marginalism
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miltcho
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(Original post by JacobW)
Gah? No good or service is inherently "more marginal" than any other. The marginal utility of something is the utility produced by one additional unit of it. http://en.wikipedia.org/wiki/Marginalism
Wood and straw are both useful and probably, same marginal. Anyway, they have different prices.

Potatoes are as useful and marginal as any operative system (as windows), but the second one is more expensive.

It is not marginality, but the human work put into taking and transforming these materials which gives value value to merchandises!
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D.R.E
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(Original post by miltcho)
Wood and straw are both useful and probably, same marginal. Anyway, they have different prices.

Potatoes are as useful and marginal as any operative system (as windows), but the second one is more expensive.

It is not marginality, but the human work put into taking and transforming these materials which gives value value to merchandises!
Image

That's how badly you missed the point!

Imagine two people, A and B, produce things. A works 100 hours to produce one unit of a seemingly useful tool. And B, well, B makes comedy gifs like the one above, and it takes him 20 minutes in photoshop to produce one of those. The point of marginality is that, there is no reason to assume that A's tool should be worth more than B's gif simply because it takes more time and effort to make.
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JacobW
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(Original post by miltcho)
Wood and straw are both useful and probably, same marginal. Anyway, they have different prices.

Potatoes are as useful and marginal as any operative system (as windows), but the second one is more expensive.

It is not marginality, but the human work put into taking and transforming these materials which gives value value to merchandises!
Suppose I'm running a software company with ten computers, nine of which have operating systems. Acquiring one additional operating system will increase my capacity substantialy; it might earn me an extra £2000 pounds of revenue each year. So I'd be willing to pay up to £2000 for the system.

If, on the other hand, I have nine potatos and an average disposable income...for an Irish peasent, perhaps an extra potato would keep him alive and be invaluable. For me, however, it's next to worthless. The marginal potato will give me precious little satisfaction, maybe 10p's worth. So I'd be willing to pay up to 10p for the potato.

Utility theory of value can account for your examples easily.
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confusedexcited
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I'm really very confused, Marx never argued that the amount of time attributed to creating an object gives it value, to quote directly he does not wish to "ascribe a supernatural creative power to labour."

As far as I remember, and it's been a while since I read Kapital Volume 1, Marx's theory of Labour hinged around the idea that labour is an inter-connected process that exists within an entire society, and that rather than measuring the amount of time it takes an individual to do anything, it should instead be measured by a fraction of the entire labour time of society.

Essentially, his argument kind comes down to the idea that it is the labour put into an object that makes it worth anything, rather than the object itself. I think.
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Classical Liberal
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(Original post by confusedexcited)
I'm really very confused, Marx never argued that the amount of time attributed to creating an object gives it value, to quote directly he does not wish to "ascribe a supernatural creative power to labour."


Essentially, his argument kind comes down to the idea that it is the labour put into an object that makes it worth anything, rather than the object itself. I think.
Good one sir.
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(Original post by Classical Liberal)
Good one sir.
I never professed to be an expert! I can see there's an inconsistency there, which perhaps is because of an inconsistency of the idea itself. If you'll look, although I quote Marx, I never say whether I agree, because I'm unsure. Though, on further examination I think I merely summed it up too briefly, Marx argued that without the labour, the object would not exist and hence have no value. Therefore, it is not so much the abstract idea of labour, otherwise the more time put into an object the more it would be worth (hence the misconception that under Marxian utility of value idea a toothbrush that took a million years to carve would be worth a fortune), but the process of construction itself.
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Classical Liberal
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(Original post by confusedexcited)
I never professed to be an expert! I can see there's an inconsistency there, which perhaps is because of an inconsistency of the idea itself.
Precisely.

Once all the confusing language is stripped out Marxism actually makes very little sense

I can't count the amount of videos and text on Marxism that just uses bamboozling gibberish to confuse the reader into thinking the argument is sound. Its like how experts can just use nonsensical jargon then draw a conclusion that is completely false and laymen just no their heads pretending to get it
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confusedexcited
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(Original post by Classical Liberal)
Precisely.

Once all the confusing language is stripped out Marxism actually makes very little sense

I can't count the amount of videos and text on Marxism that just uses bamboozling gibberish to confuse the reader into thinking the argument is sound. Its like how experts can just use nonsensical jargon then draw a conclusion that is completely false and laymen just no their heads pretending to get it
I'm not entirely sure I agree with you, I think Marxism is a very logical ideology (at least the philosophy is), which actually makes quite a lot of sense I think I just attempted to explain a complex theory briefly, which made it incomprehensible.

However, I do agree that many Marxists use ridiculous language to over-state their arguments to the extent that the original idea is lost amongst a quagmire of superlatives
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prog2djent
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(Original post by confusedexcited)
I'm not entirely sure I agree with you, I think Marxism is a very logical ideology (at least the philosophy is), which actually makes quite a lot of sense I think I just attempted to explain a complex theory briefly, which made it incomprehensible.

However, I do agree that many Marxists use ridiculous language to over-state their arguments to the extent that the original idea is lost amongst a quagmire of superlatives
Yeah marx is logical if you leave out humanity.

I wish Proudhon would have achieved the fame Marx did, atleast there is something In mutualism I can agree with, infact most of it tbf.

Not quite shure why Marx over-shadowed him, probably because proudhon was busy debating and agreeing with Bastiat whilst marx was looting from his family.
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(Original post by prog2djent)
Yeah marx is logical if you leave out humanity.

I wish Proudhon would have achieved the fame Marx did, atleast there is something In mutualism I can agree with, infact most of it tbf.

Not quite shure why Marx over-shadowed him, probably because proudhon was busy debating and agreeing with Bastiat whilst marx was looting from his family.
I've never read Proudhon, though I'll take a glance by your recommendation. I'm not entirely sure what you mean by 'leaving out humanity', presumerably the classical post-Enlightenment criticism that people are all self-interested, etc. I reject that argument on the basis that, firstly, neurologically speaking we are more hard-wired for alturism (and, if you were take it as such, the subset of alturism; empathy) and secondly because it seems both wildly stereotypical and as counter-logical as assuming all people are obsessed with each others' welfare. Marx's arguments were intensely logical, in particular his dialectic which I use often to analyse events, or individuals. His metanarrative was frankly stupid, as all such constructions tend to be!
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(Original post by confusedexcited)
I've never read Proudhon, though I'll take a glance by your recommendation. I'm not entirely sure what you mean by 'leaving out humanity', presumerably the classical post-Enlightenment criticism that people are all self-interested, etc. I reject that argument on the basis that, firstly, neurologically speaking we are more hard-wired for alturism (and, if you were take it as such, the subset of alturism; empathy) and secondly because it seems both wildly stereotypical and as counter-logical as assuming all people are obsessed with each others' welfare. Marx's arguments were intensely logical, in particular his dialectic which I use often to analyse events, or individuals. His metanarrative was frankly stupid, as all such constructions tend to be!
He believes humans are a means to an end, and that no-one should reveive help if they don't work, marx hated charity. And since capital will be abolished, there is aid to give in other ways, catering for needs. But marx flat out says you should be punished for doing this.

Anyway, the only part of Mutulaism I like is its emphasis on the free market and a free society, its tagline is "free market anti-capitalism" and like Austrain economists, anarcho capitalists and right-libertarians, criticises 'actually existing capitalism', which is essentially corporatism mixed with state capitalism (sorry for throwing a load of jargon at you). Its private property ideas are meh, taking from the georgists and believing land is not property as it cannot be made, but like austrian economists, arguing property can be used either individually or collectively with a strong law defining private property. I am still learning some more, Its biggest flaw is basing argument on the labour theory of value, which only marxists/communists, and syndicalists still believe to be correct.

If I had not leared about neo-conservatism, then neo-liberalism, then classical liberalism, then austrainism, then anarcho capitalism (in that order) when I saw the series "free to choose" by M.Friedman, I would have probably chosen mutualism as my prefered economic system, back when I was an idiotic socialist because I saw the holy grail of economically illeterate, hypocritical progressive, Michael Moore's "capitalism a love story" when I was 13.

The influence that guy holds over people who otherwise don't know any other alternatives is sickening, he completely takes advantage of the genearl populations economic naivity and throttles it with empty, false rhetoric about how great europe is because, yes, we, are socialist. Ultimate facepalm, I wish both the republicans and progressive democracts would stop using europe as a scape goat for either saying how awful or wonderful socialism is. Jeez, most of us have freer markets than the US. I guess they see two or three public industries that they have under subsidised insurance (which is in no way private) as socialistic, oh and according to Moore we don't mind paying high taxes HAHA

They are clueless.
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confusedexcited
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(Original post by prog2djent)
He believes humans are a means to an end, and that no-one should reveive help if they don't work, marx hated charity. And since capital will be abolished, there is aid to give in other ways, catering for needs. But marx flat out says you should be punished for doing this.

Anyway, the only part of Mutulaism I like is its emphasis on the free market and a free society, its tagline is "free market anti-capitalism" and like Austrain economists, anarcho capitalists and right-libertarians, criticises 'actually existing capitalism', which is essentially corporatism mixed with state capitalism (sorry for throwing a load of jargon at you). Its private property ideas are meh, taking from the georgists and believing land is not property as it cannot be made, but like austrian economists, arguing property can be used either individually or collectively with a strong law defining private property. I am still learning some more, Its biggest flaw is basing argument on the labour theory of value, which only marxists/communists, and syndicalists still believe to be correct.

If I had not leared about neo-conservatism, then neo-liberalism, then classical liberalism, then austrainism, then anarcho capitalism (in that order) when I saw the series "free to choose" by M.Friedman, I would have probably chosen mutualism as my prefered economic system, back when I was an idiotic socialist because I saw the holy grail of economically illeterate, hypocritical progressive, Michael Moore's "capitalism a love story" when I was 13.

The influence that guy holds over people who otherwise don't know any other alternatives is sickening, he completely takes advantage of the genearl populations economic naivity and throttles it with empty, false rhetoric about how great europe is because, yes, we, are socialist. Ultimate facepalm, I wish both the republicans and progressive democracts would stop using europe as a scape goat for either saying how awful or wonderful socialism is. Jeez, most of us have freer markets than the US. I guess they see two or three public industries that they have under subsidised insurance (which is in no way private) as socialistic, oh and according to Moore we don't mind paying high taxes HAHA

They are clueless.
"And that children, is what we called a meandering thought process." I jest, I jest.

I agree, Micheal Moore is professionally disengenious and the idea that the Americans have anything like a free market is absurd. I wouldn't go so far as to say Europe (as a landmass) has (in general) freer markets, but I'd call neither socialist nor free-market. I agree with you that the theory of labour is a weak point, it either ignores or fails to acknowledge the other essential parts of resource production and as far as I know Marx never gives a mathmatical forumula. Not help to economists!

I've investigated most of those theories, anarcho-capitalism, Austrian economics (gotta lotta love for Austrian economics, as well as Hayek's philosophy) and classical liberalism. I don't think I'm in a position to declare an alligance yet, my heart yearns for Anarcho-socialism though!
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(Original post by confusedexcited)
"And that children, is what we called a meandering thought process." I jest, I jest.

I agree, Micheal Moore is professionally disengenious and the idea that the Americans have anything like a free market is absurd. I wouldn't go so far as to say Europe (as a landmass) has (in general) freer markets, but I'd call neither socialist nor free-market. I agree with you that the theory of labour is a weak point, it either ignores or fails to acknowledge the other essential parts of resource production and as far as I know Marx never gives a mathmatical forumula. Not help to economists!

I've investigated most of those theories, anarcho-capitalism, Austrian economics (gotta lotta love for Austrian economics, as well as Hayek's philosophy) and classical liberalism. I don't think I'm in a position to declare an alligance yet, my heart yearns for Anarcho-socialism though!
Just realised I put capitalist a love story, I meant I saw Sicko on more4 when i was 13, since im 18, a love story was in 09 so that doesn't match up haha.

I also have a lot of love for social anarchists too, on the same page essentially, except where we view property rights, and I don't think the society will ever be free, sacrificing the individual for the commune seems inhuman to me, still more sane that orthodox marxists and communists though.
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py0alb
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(Original post by D.R.E)
Image

That's how badly you missed the point!

Imagine two people, A and B, produce things. A works 100 hours to produce one unit of a seemingly useful tool. And B, well, B makes comedy gifs like the one above, and it takes him 20 minutes in photoshop to produce one of those. The point of marginality is that, there is no reason to assume that A's tool should be worth more than B's gif simply because it takes more time and effort to make.
According to basic economic theory, if A works 24 hours and produces 2 tools, whereas B works 24 hours and produces 300 comedy gifs, and each person desires the use of one tool and 2 gifs per day, what is the trade value of the tool in terms of gifs?
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Classical Liberal
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(Original post by py0alb)
According to basic economic theory, if A works 24 hours and produces 2 tools, whereas B works 24 hours and produces 300 comedy gifs, and each person desires the use of one tool and 2 gifs per day, what is the trade value of the tool in terms of gifs?
Can I just check this.

A wants. 1 tool. 2 gifs.

B wants. 1 tool. 2 gifs.

They get no more benefit from extra consumption. There is not benefit from liesure time, time not worked, for either individual.

And A can only produce tools. And B can only produce gifs. There is no trade off for either individual with regards to production.

If this is true then.

A produces 2 tools and trades one of the tools with B for 2 gifs.....

1 tool for 2 gifs.
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