4 ms·

The labor theory of value hasn't been considered correct in nearly a century.

_alternator_ 6mo ago
"Observation of how economies actually work has upended 150 year of economics." True for both Marxist and neoclassical economics.
noosphr 6mo ago
If you want the neoclassical version: What happens when there is an oligopoly in the supply of labor? Same answer. Nothing good for the consumers of labor.
- kjshsh123 6mo ago
  Technological improvements shift supply curves right which is good for consumers.
  - noosphr 6mo ago
    In a market with perfect competition, which I specifically ruled out by stating that the suppliers of labor from an oligopoly.
    - dash2 6mo ago
      Why would you expect technological improvements to only shift supply curves right under perfect competition? I'd also expect it under oligopoly or even monopoly. You also might think there'd be more tech improvement under oligopoly, on Schumpeterian grounds that oligopolists can internalize the benefits of tech research.
      - noosphr 6mo ago
        A monopolist has no reason to decrease price because there is no competition. As we saw with Bell Labas in the US it is entirely possible for a monopoly to both have world class research and burry it for decades, viz. magnetic storage https://gizmodo.com/how-ma-bell-shelved-the-future-for-60-years-5691604 https://gizmodo.com/how-ma-bell-shelved-the-future-for-60-ye... Oligopolists are in the same boat. But there needs to be a conspiracy to retard innovation. Something tech companies are only too happy to do: https://journals.law.unc.edu/ncjolt/blogs/wage-fixing-scheme-shocks-silicon-valley-google-apple-and-many-others-now-under-doj-investigation/ https://journals.law.unc.edu/ncjolt/blogs/wage-fixing-scheme...
        kjshsh123 6mo ago
        Technological improvements don't reduce prices as much in a monopoly, but they still do reduce prices to increase profits. Profit is always maximized at MR=MC, in perfect competition, oligopoly, or monopoly.
  - shimman 6mo ago
    Ah yes, shinier trinkets while your material reality dissolves (unaffordable housing, childcare, school, poor jobs, poor benefits)! The neoliberal dream.
- kridsdale1 6mo ago
  (See Medicine)
dwb 6mo ago
By who? The capitalist economists that presided over the 2008 financial crisis and its response? And the response to COVID that has seen inequality rocket?
gbacon 6mo ago
Unlike Jevons, [Carl] Menger [(1840–1921)] did not believe that goods provide “utils,” or units of utility. Rather, he wrote, goods are valuable because they serve various uses whose importance differs. For example, the first pails of water are used to satisfy the most important uses, and successive pails are used for less and less important purposes. Menger used this insight to resolve the diamond-water paradox that had baffled Adam Smith (see marginalism). He also used it to refute the labor theory of value. Goods acquire their value, he showed, not because of the amount of labor used in producing them, but because of their ability to satisfy people’s wants. Indeed, Menger turned the labor theory of value on its head. If the value of goods is determined by the importance of the wants they satisfy, then the value of labor and other inputs of production (he called them “goods of a higher order”) derive from their ability to produce these goods. Mainstream economists still accept this theory, which they call the theory of “derived demand.” Menger used his “subjective theory of value” to arrive at one of the most powerful insights in economics: both sides gain from exchange. People will exchange something they value less for something they value more. Because both trading partners do this, both gain. This insight led him to see that middlemen are highly productive: they facilitate transactions that benefit those they buy from and those they sell to. Without the middlemen, these transactions either would not have taken place or would have been more costly. https://www.econlib.org/library/Enc/bios/Menger.html https://www.econlib.org/library/Enc/bios/Menger.html

"Observation of how economies actually work has upended 150 year of economics." True for both Marxist and neoclassical economics.

noosphr 6mo ago

If you want the neoclassical version: What happens when there is an oligopoly in the supply of labor? Same answer. Nothing good for the consumers of labor.

kjshsh123 6mo ago
Technological improvements shift supply curves right which is good for consumers.
- noosphr 6mo ago
  In a market with perfect competition, which I specifically ruled out by stating that the suppliers of labor from an oligopoly.
  - dash2 6mo ago
    Why would you expect technological improvements to only shift supply curves right under perfect competition? I'd also expect it under oligopoly or even monopoly. You also might think there'd be more tech improvement under oligopoly, on Schumpeterian grounds that oligopolists can internalize the benefits of tech research.
    - noosphr 6mo ago
      A monopolist has no reason to decrease price because there is no competition. As we saw with Bell Labas in the US it is entirely possible for a monopoly to both have world class research and burry it for decades, viz. magnetic storage https://gizmodo.com/how-ma-bell-shelved-the-future-for-60-years-5691604 https://gizmodo.com/how-ma-bell-shelved-the-future-for-60-ye... Oligopolists are in the same boat. But there needs to be a conspiracy to retard innovation. Something tech companies are only too happy to do: https://journals.law.unc.edu/ncjolt/blogs/wage-fixing-scheme-shocks-silicon-valley-google-apple-and-many-others-now-under-doj-investigation/ https://journals.law.unc.edu/ncjolt/blogs/wage-fixing-scheme...
      - kjshsh123 6mo ago
        Technological improvements don't reduce prices as much in a monopoly, but they still do reduce prices to increase profits. Profit is always maximized at MR=MC, in perfect competition, oligopoly, or monopoly.
- shimman 6mo ago
  Ah yes, shinier trinkets while your material reality dissolves (unaffordable housing, childcare, school, poor jobs, poor benefits)! The neoliberal dream.
kridsdale1 6mo ago
(See Medicine)

dwb 6mo ago

By who? The capitalist economists that presided over the 2008 financial crisis and its response? And the response to COVID that has seen inequality rocket?

gbacon 6mo ago

Unlike Jevons, [Carl] Menger [(1840–1921)] did not believe that goods provide “utils,” or units of utility. Rather, he wrote, goods are valuable because they serve various uses whose importance differs. For example, the first pails of water are used to satisfy the most important uses, and successive pails are used for less and less important purposes. Menger used this insight to resolve the diamond-water paradox that had baffled Adam Smith (see marginalism). He also used it to refute the labor theory of value. Goods acquire their value, he showed, not because of the amount of labor used in producing them, but because of their ability to satisfy people’s wants. Indeed, Menger turned the labor theory of value on its head. If the value of goods is determined by the importance of the wants they satisfy, then the value of labor and other inputs of production (he called them “goods of a higher order”) derive from their ability to produce these goods. Mainstream economists still accept this theory, which they call the theory of “derived demand.” Menger used his “subjective theory of value” to arrive at one of the most powerful insights in economics: both sides gain from exchange. People will exchange something they value less for something they value more. Because both trading partners do this, both gain. This insight led him to see that middlemen are highly productive: they facilitate transactions that benefit those they buy from and those they sell to. Without the middlemen, these transactions either would not have taken place or would have been more costly. https://www.econlib.org/library/Enc/bios/Menger.html https://www.econlib.org/library/Enc/bios/Menger.html