LTV = labor theory of value

MU = marginal utility

Useless Effort Problem

• P1: LTV says goods derive value from the labor time embodied in them.
• P2: Poking 10 thousand small holes into a rotting apple requires labor time.
• P3: The demand for a rotting apple with 10 thousand small holes is ~0
• C: A good can contain labor time but have ~0 value.
• LTV Contradiction: labor was expended, but almost no value was produced
• MU Explanation: Value arises from subjective desire. Since nobody wants rotten apples with a bunch of holes, , so .

Inefficient Worker Problem

• P1: LTV says more labor time means more value (although there need not be a proportional relation, just some increase).
• P2: Worker A takes 4 hours to make a basket; Worker B takes 2 hours to make the same basket.
• P3: The baskets command the same price on the market.
• C: Equal goods embody unequal labor time yet command equal value because additional labor was born of inefficiency and consumers only give value to the product, not the process.
• LTV Contradiction: Despite the great difference in labor expended, no additional value was added from additional labor. The only way to get around this is to call the value of labor subjective and marginal, but that is just MU with a middle man (no real difference).
• MU Explanation: Buyers care about the usefulness of the basket, not how long it took to produce. Both baskets satisfy the same need, and thus have the same value. Inefficiency doesn’t generate extra value, it just hurts the producer’s competitiveness.

Technology Problem (similar to the Inefficient Worker Problem)

• P1: LTV says reducing labor time reduces value.
• P2: A machine reduces chair-making time from 4 hours to 1 hour.
• P3: Consumer demand stays the same despite production costs decreasing.
• C: Value is unchanged despite less labor input.
• Sidenote: Obviously in an actual economy the producer would decrease the sale price of the chair to attempt to take market share from their competition and increase revenue. This does not devalue this argument–nor make it wrong; instead what we are seeing is the effect of production costs decreasing, which shifts the supply curve rightward (lowering the price). This has nothing to do with how the consumers value the product. Contrary to what Kevin Carson thinks, marginalists believe value (demand) and supply (cost) is what determines prices, . Labor is the factor of production that is being optimized here which drops the cost. I should also mention here that labor itself is a commodity that has marginal subjective value. The labor of a brain surgeon is worth more than the labor of a fast food worker simply because one type of labor is more scarce.

The Investment Problem

• P1: LTV holds that value derives from the labor embodied in a produced good.
• P2: An inventor with no capital but a valuable idea can secure money from an investor in exchange for interest

• P3: This transaction has value before any good is produced or any labor embodied in it.
• P4: The investor, who contributes no labor, nonetheless earns income.
• C: Value and income exist independently of embodied labor.

The Timing/Supply Problem

• P1: LTV says equal labor inputs ≈ equal value.
• P2: Two bakers use equal labor to bake identical loaves.
• P3: The first baker sells all their loaves first for $2 each as at the time there were other loaves at the market selling for $2.50
• P4: The second baker sells their loaves later in the day when no other bakers were at the market and is thus able to charge $3
• C: The value of a good can change based on the current supply
• Contradiction: This shows how a change in value can occur despite labor not changing

Subjective Preference Problem

• P1: LTV says equal labor inputs ≈ equal value.
• P2: A rare coin and a nickel take equal labor to mint.
• P3: The rare coin is worth more than the intended value of 5¢.
• C: equal labor can produce radically unequal value

The Productivity Problem

• P1: LTV says the value of labor-power (wages) is determined by the cost of reproducing the worker (food, shelter, etc.), not by how much they produce.
• P2: If tools make a worker more productive, the cost of reproducing the worker does not change.
• P3: In reality, workers with better tools (more capital) often earn higher wages.
• C: Wages can rise without any change in the cost of reproducing labor-power.

I can think of many more basic arguments to point out problems, but I think this is sufficient. There is also no equivalent easy examples to show why marginal subjective value is wrong (almost like it isn't wrong 🤨)