>>11076218>but the 'socially necessary' labour.this is why marx is garbage. he uses bullshit language as a guise for "objectivity" to hide his subjectivity.
"socially necessary" also means the same time it takes to produce cheap box wine would be used to produce expensive wine.
This is all categorized with the transformation problem.
To put it simply, LTV only works when there is constant returns to scale - which is a rarity.
There is a simple model which the labor theory of value works. If inputs are homogeneous (workers abilities) and constant returns to scale hold (changes in inputs respond equally proportionally to outputs), the proportions of labor input will need to be proportional to the price. If not, labor inputs will be reallocated until this proportionality holds.
One problem is that we need labor, capital, and land for production – not just labor. The transformation problem tries to resolve this, but it all falls apart and becomes unscientific by begging the question as a result.
Another problem is that inputs are heterogeneous (worker’s abilities are not the same). So they have to be valued in dollar terms, and that requires some transformation. In turn, this requires information from the demand side (not just labor). Price determines cost of production at least as much as cost of production determines price.
Compared to Marshallian supply/demand curves, the labor theory of value is at best awkward and most of the time it’s wrong. There are some economic sectors where constant returns to scale hold and thus demand has little influence over market price. Those are special cases.
"socially necessary" is a subjective nebulous term that doesn't make any sense. To put it another way: Who is to decide what is "socially necessary," marx or the "experts" who are reallocating the resources? At some point, value has to come from the subjective demand of others. It is impossible to escape a value judgement - no matter who you are.
