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And how do you determine the value of someone's labour? Marxism can't answer that, while conventional economics can. > Possibly the most obvious example is the

And how do you determine the value of someone's labour? Marxism can't answer that, while conventional economics can. > Possibly the most obvious example is the tendency of the rate of profit to fall. So your evidence of the validity of Marxism is... a 50-50 shot? Even in the replication crisis, science at least demands no more than 5% chance for hypotheses to come true by random luck.

lucian1900 5y ago
All value comes from labour or nature, which is trivially provable by comparing an enterprise's inputs and outputs. The outputs are most obvious in terms of the prices of sold commodities. The inputs are either capital (materials, etc.) or labour. Since materials & machinery have to be paid for in full and there is still something left over as profit, that value can only come from paying workers less than the value of their labour. The rate of profit has a historical tendency to fall, as companies are incentivised to produce cheaper by automating. This reduces the proportion of costs attributed to labour, which means either reducing wages or reducing profits. Since workers will resist being paid less than they can survive on, profits end up falling over time. The rate of profit does get reset by destruction of capital (like wars), just like the labour theory of value suggests. This can be seen historically, using data collected by mainstream economists. You can find such graphs in most economics textbooks. Here's some more on the topic https://thenextrecession.wordpress.com/2020/07/25/a-world-rate-of-profit-a-new-approach/ https://thenextrecession.wordpress.com/2020/07/25/a-world-ra...
- scatters 5y ago
  Not at all; value comes from marginal utility! The action of labour creates value, but it can just as easily destroy it. If a factory produces goods at a loss, is the value of its workers labor negative? Clearly not, but that is what labor theory of value would imply. Then, stylistically, capital goods are funded out of shareholder capital, which is risk-bearing, so demands a return above depreciation; this is accounted as profit but companies still need to promise dividends to be able to fund capital improvements. And enterprise value - which lies in a firm's relationships with its workforce, its suppliers and customers - is created by entrepreneurial labour with the promise of eventual profit. Yes, of course in the course of competition, in mature industries profit will reduce to the cost of capital; although automation (as a productivity improvement) will delay this process, not accelerate it. But as industries mature, others arise through innovation. Simply drawing a trend line on a graph (and it's not clear what the graph is displaying) and exclaiming that it fits theory is nowhere near enough to evidence a hypothesis, especially when the counter-trends are contrary to theory. What destruction of capital occurred in the early '80s?
  - lucian1900 5y ago
    I recommend you read Marx, who explains at length about the difference between use value and exchange value. Not all labour is useful, but all profit is generated by labour. The overall global rate of profit has been steadily falling since the beginning of capitalism; this is not disputed by bourgeois economists. Destroying capital is one way to reset it, which did happen in the 80s as well through war and closing of “old” industries. Along with forced privatisations, which opened up more of the economy to commodity production for profit. And along with deregulation and violent suppression of labour movements, to reduce the price of labour. Neoliberalism is what temporarily raised the rate of profit in the 80s.
    - scatters 5y ago
      The distinction between use value and exchange value is incoherent, so there is nothing to be gained by studying Marx's writings on it. Any theory of value that does not include the concept of marginal utility is a best worthless. There is certainly no consensus that the global rate of return is in long-term decline, and much evidence to the contrary, particularly over the recent decades when econometric data has become sufficient to measure it. And anyway, even if there were a secular trend, Marxian economics could not explain it because that theory is dependent on Marx's law of value, which is entirely contradicted by evidence.

lucian1900 5y ago

All value comes from labour or nature, which is trivially provable by comparing an enterprise's inputs and outputs. The outputs are most obvious in terms of the prices of sold commodities. The inputs are either capital (materials, etc.) or labour. Since materials & machinery have to be paid for in full and there is still something left over as profit, that value can only come from paying workers less than the value of their labour. The rate of profit has a historical tendency to fall, as companies are incentivised to produce cheaper by automating. This reduces the proportion of costs attributed to labour, which means either reducing wages or reducing profits. Since workers will resist being paid less than they can survive on, profits end up falling over time. The rate of profit does get reset by destruction of capital (like wars), just like the labour theory of value suggests. This can be seen historically, using data collected by mainstream economists. You can find such graphs in most economics textbooks. Here's some more on the topic https://thenextrecession.wordpress.com/2020/07/25/a-world-rate-of-profit-a-new-approach/ https://thenextrecession.wordpress.com/2020/07/25/a-world-ra...

scatters 5y ago
Not at all; value comes from marginal utility! The action of labour creates value, but it can just as easily destroy it. If a factory produces goods at a loss, is the value of its workers labor negative? Clearly not, but that is what labor theory of value would imply. Then, stylistically, capital goods are funded out of shareholder capital, which is risk-bearing, so demands a return above depreciation; this is accounted as profit but companies still need to promise dividends to be able to fund capital improvements. And enterprise value - which lies in a firm's relationships with its workforce, its suppliers and customers - is created by entrepreneurial labour with the promise of eventual profit. Yes, of course in the course of competition, in mature industries profit will reduce to the cost of capital; although automation (as a productivity improvement) will delay this process, not accelerate it. But as industries mature, others arise through innovation. Simply drawing a trend line on a graph (and it's not clear what the graph is displaying) and exclaiming that it fits theory is nowhere near enough to evidence a hypothesis, especially when the counter-trends are contrary to theory. What destruction of capital occurred in the early '80s?
- lucian1900 5y ago
  I recommend you read Marx, who explains at length about the difference between use value and exchange value. Not all labour is useful, but all profit is generated by labour. The overall global rate of profit has been steadily falling since the beginning of capitalism; this is not disputed by bourgeois economists. Destroying capital is one way to reset it, which did happen in the 80s as well through war and closing of “old” industries. Along with forced privatisations, which opened up more of the economy to commodity production for profit. And along with deregulation and violent suppression of labour movements, to reduce the price of labour. Neoliberalism is what temporarily raised the rate of profit in the 80s.
  - scatters 5y ago
    The distinction between use value and exchange value is incoherent, so there is nothing to be gained by studying Marx's writings on it. Any theory of value that does not include the concept of marginal utility is a best worthless. There is certainly no consensus that the global rate of return is in long-term decline, and much evidence to the contrary, particularly over the recent decades when econometric data has become sufficient to measure it. And anyway, even if there were a secular trend, Marxian economics could not explain it because that theory is dependent on Marx's law of value, which is entirely contradicted by evidence.