The mistake here is the assumption that value comes from labor. Value is inherently subjective, depending on what the purchaser is willing to pay for, not due t

The mistake here is the assumption that value comes from labor. Value is inherently subjective, depending on what the purchaser is willing to pay for, not due to intrinsic properties of whatever the good or service is. Suppose in your raw iron example, instead of making steel or a car, you make an inferior product because either you or the people who work for you are incompetent. Suppose you make the 1960 Chevrolet Corvair, a car so horrible that it inspires the book "Unsafe at Any Speed" by Ralph Nader. Even though nothing about the product or the labor used to produce it changes, your product loses value immediately because people don't want to buy a dangerous car. Your hypothetical multiplier turns negative overnight, even though your car is just as unsafe before the book as it was afterward. If the labor and your intelligence were the source of the labor, the value of the car should not change just because Ralph Nader says it's dangerous.