Comment by regularization | Hacker News Reader

Comment by regularization | Hacker News Reader

> Suppose you become politically radicalized and become a Marxist. You get convinced that the labor theory of value is correct.

> The number of people in the general population who will know enough about the history and philosophy of economics to give you a clear account of why Marxism and the labor theory of value is incorrect,

He's correct most people don't know about labor theory of value. Which is why it's easy for him to categorize those who believe it as "radicalized" and "Marxist" versus the minority of calm, rational, objective people who can discount it.

Marx did follow the labor theory of value - as did virtually every major economist (or as they put it probably better back then, student of political economy) before Marx, who also believed it. Marx credits another revolutionary for discovering the labor theory of value - Benjamin Franklin. There were a few proto-papers on subjective theory of value, but an alternative theory of value did not even really exist before Capital was published.

Labor theory of value was the theory of Benjamin Franklin, John Locke, Adam Smith, David Ricardo, and all the major economists before Marx. And Marx accepted what they accepted.

Alternative theories of value were not really fleshed out until after Marx published Capital.

So consider all of this when he categorizes the idea of the labor theory of value as extremist, radical, Marxist etc.

According to this article, believing that a carpenter banging wood and nails into a table creates value is an extremist belief. Even though pretty much every major economist before Marx believed the same thing.

Ps. This was told to you by myself - from one the 1% of people who know this stuff

Pps. If you didn't read the article, you would not know I am referring to myself as part of an elite 1% of knowledge sarcastically

The important issue to focus on isn't that long ago people had a model that was not a good model of reality. The issue is that now we have better models and the person who claims they have an educated opinion should know it. Blindly holding to a model that has been shown to be inferior is what makes it an extremist belief.

The geocentric model was thought to be true for literally thousands of years by every astronomer and scientist. Today if someone claimed the geocentric model was true, we would consider it an extremist belief - even though pretty much every major astronomer believed it for thousands of years.

Yes, we should compare the best currently available descriptive models and normative systems. But Masley's claims in the text can then be critiqued for disregarding that there are contemporary thinkers in the marxian tradition who either hold an updated and modified labor theory of value informed by contemporary evidence or hold a marxian view that does not rely on any labor theory of value at all.

I am with the author on how people get radicalized, but he could not have picked a worse example that Marxism as an example of extremist idea.

Equating Marxism to labor theory of value is akin to maybe equating economics to a supply/demand curve.

There are unequivocally true parts of Marxism, such as surplus value of labor, and the fundamental incentive conflict between a capital owner and laborer (which Marx deems exploitation)

The labor theory of value is also I think misinterpreted by modern economists as a price-setting mechanism, which it isn't. It's a mechanism to show that there is a certain floor on value of an economic good, which is raised every time constructive labor is applied to a product.

> It's a mechanism to show that there is a certain floor on value of an economic good, which is raised every time constructive labor is applied to a product.

The problem is that this argument is circular: whether the labor is "constructive" gets judged by whether it succeeded in adding value.

Yes, I was considering making the same point, but in fairness to him, the vast majority of the millenial marxists and beyond don't know this either, nor that marxism doesn't mean "no profits or reinvestment or insurances, all value goes to workers".

Sorry, but this completely misrepresents what LVT actually is, as well as suggesting considerably more agreement between Marx and e.g. Smith than they actually had; it's also wrong about the chronology of alternative theories, or at least the main one that came to dominate (and which is still considered mainstream).

Smith can be forgiven for giving an unsatisfactory answer to his own water-diamond paradox, as he preceded Marx by almost a century. But the originators of the formal theory of marginalism (Jevons, Menger and Walras — you likely know the first for his paradox) were roughly contemporary with Marx; they published their work only a few years after the first volume of Das Kapital, and well before Engels could publish the rest. The roots of the theory can be traced to Italian mercantilists contemporary with Smith, and even a bit further to Bernoulli (yes, the mathematician, the actually-turns-out-to-be-wrong explanation of wing lift guy).

https://en.wikipedia.org/wiki/Marginalism

More importantly, "believing that a carpenter banging wood and nails into a table creates value" is a strawman version of LVT that none of the people you mentioned would actually espouse, including Marx; and it is extremist, as it pays no heed to issues of either quality or utility, never mind market demand.

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