noted. 03/08/2012

• Labor theory of value - Wikipedia, the free encyclopedia

  • The labor theories of value (LTV) are heterodox economic theories of value which argue that the value of a commodity is related to the labor needed to produce or obtain that commodity. The concept is most often associated with Marxian economics. Marginal utility modified labor theories of value in mainstream economics by adding the concepts of marginality (the tendency of the consumer to substitute one product for another in the marketplace and for producers to substitute one commodity for another in the production of goods and services) and diminishing utility to the original labor theory.^[1][2] Thus, under marginal utility, the first unit of production of a good or service yields more than the second or subsequent units but still costs an amount of socially necessary labor determined by marginal productivity of labor. This may cause a reduction of the price of the subsequent units, but the units continue to reflect the total value ( i.e. the socially necessary labor applied at the prevailing level of labor productivity) that was used to produce the subsequent units.

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