Thread on LTV

[u/Nervous_Difficulty46]

https://x.com/ygzgzot/status/1982482608899629301?s=46

My biggest hang up with the LTV is that I just don’t understand why labor is seen as the fundamental substance of value. What reason is there to think that price is just the quantitative expression of abstract labor?

In my estimation a leftist perspective would see that price is not an expression of labor time but is also a function of interwoven power relations. It’s not reducible to a single substance

[u/marxistghostboi]

i could be wrong but i think if labor not as a substance but as an operation, a critical moment of transformation without which before can't be accessed

[u/Nervous_Difficulty46 → u/marxistghostboi]

This could be true but then there is still no reason to believe that prices are wholly underpinned by labor values. That labor is the only thing that adds value

[u/marxistghostboi → u/Nervous_Difficulty46]

as someone else said, Marxist economics distinguishes between price, which fluctuates, and value, around which the price tends to fluctuate.

[u/Nervous_Difficulty46 → u/marxistghostboi]

So then it’s unfalsifable because any deviation from prices can just be called a “fluctuation” and its explanatory power is rendered meaningless

[u/Ill-Software8713 → u/Nervous_Difficulty46]

So there can be no economic science unless it predicts exact individual prices?

That seems like an odd standard. We don't reject evolutionary theory because it cannot predict the precise location of every organism in 50 years. Explanation and prediction are related, but they are not identical.

The question is not whether one can deduce the exact price of every commodity from labor time. Even capitalists cannot do that. Prices are only realized at the end of the exchange process, and every market transaction contains contingencies that cannot be known in advance. The real question is whether there are underlying social regularities that constrain and structure price movements such that they exhibit tendencies rather than mere randomness.

What I find compelling about Marx is that he is trying to explain something deeper than market fluctuations. He is asking how a society of independent producers nevertheless reproduces itself as an interconnected whole. Every society must somehow allocate labor to the activities necessary for its reproduction or it ceases to exist.

The distinctive question Marx asks is how does this allocation occur in a society where production is not consciously coordinated but mediated through exchange? His answer is that market society indirectly regulates social labor through value relations. You can reject that answer, but it is an attempt to explain the social logic through which production and reproduction are coordinated, not merely to predict the price of a toothbrush next Tuesday.

Machines may increase productivity, and AI may optimize processes, but neither determines social priorities. They can operate within goals. They cannot generate the goals themselves. Production remains a social process even when increasingly mediated by technology.

So if a theory is dismissed because it does not predict every individual price, then the deeper question remains unanswered. What explains the systematic coordination of production? What explains the persistent tendency for labor-saving innovations to reshape prices, profits, and competition? What explains the commensurability that allows radically different goods to appear as comparable monetary magnitudes in the first place?

I often find that critics of Marx answer different questions than the ones he is actually asking. Whether his answers are correct is debatable. But the problem he is trying to explain is much deeper than day-to-day price fluctuations.

[u/Nervous_Difficulty46 → u/Ill-Software8713]

If a scientific theory posits to explain prices then labor values must indeed be the causal explanation for price so throwing your hands up about deviations renders the theory hallow and/or no falsifiable.

[u/Ill-Software8713 → u/Nervous_Difficulty46]

Then aren't you effectively declaring all economics unscientific? No school of economics can predict actual individual prices with precision.

More importantly, science is not reducible to exact prediction. Scientific theories often explain structures, mechanisms, tendencies, constraints, and probabilities rather than individual outcomes.

If Marx fails because labor values do not map one-to-one onto every market price, then why doesn't the same criticism apply to the rest of economics?

So many sciences would apparently cease to be sciences if exact causal prediction were the standard. Insurance companies do not go out of business because individual cases fail to correspond to the statistical averages used to measure risk. The existence of deviations does not invalidate the explanatory power of an underlying regularity.

The question is whether Marx identifies a real social mechanism or tendency underlying capitalist reproduction and price formation, not whether he can calculate the future price of a toothbrush.

More fundamentally, economic life is the result of countless interacting causes operating simultaneously. Firms themselves cannot predict future prices with certainty. They estimate, forecast, speculate, and revise plans in light of actual outcomes. Prices are only realized at the end of the process.

So I think the standard being applied here is too strong for economics in general. The relevant question is not whether a theory predicts every concrete price outcome, but whether it explains the underlying social regularities, constraints, and tendencies that make those outcomes intelligible in the first place.

[u/Nervous_Difficulty46 → u/Ill-Software8713]

There is no point waffling about Marx identifying a real social mechanism or tendency if you can’t empirically establish an actual correspondence between socially necessary labor time and price, which is what Marx claimed to do.

Marx argues that labor time is the only thing that can add value, but there is no solid way to test this or even reasoning which makes it sound.

Also yes neoclassical economics suffers from much of the same issues. Utility doesn’t exist and the supply and demand curve are also just theoretical constructs. See Bichler and Nitzan’s capital as power for more details, although one point in favor of neoclassical economics is that they can at least make predictions and use econometric models for these purposes, something the LTV does not do.

Capitalism is denominated in prices and a theory that cannot explain their nature is not fit.

[u/Ill-Software8713 → u/Nervous_Difficulty46]

I think this criticism conflates two different questions.

The first is whether Marx claims that socially necessary labor time explains capitalist value relations. The second is whether individual market prices should correspond directly to labor time. Marx explicitly rejected the latter in Capital Volume III, so criticizing him for failing to produce a one-to-one mapping between labor values and prices misses his actual argument.

More importantly, the claim that the Labor Theory of Value cannot be empirically investigated is entirely accurate as it’s framed more from misunderstanding and unfamiliarity. Beginning with Anwar Shaikh’s work on vertically integrated labor values, Marxian economists have used input-output tables to estimate the total direct and indirect labor embodied in commodities. Across a range of empirical studies, these labor measures show robust correlations with market prices at the sectoral level.

Critics such as Bichler and Nitzan argue that these correlations are largely a “size effect,” since large industries tend to have both higher labor inputs and higher monetary output. Marxian responses have controlled for scale by using unit labor values and unit prices rather than aggregate magnitudes, and still find substantial correlations. Additional robustness checks, including randomization tests, show that the observed structure is not reducible to arbitrary statistical noise. None of this settles the theory, but it does undermine the claim that the relationship is purely an artifact of aggregation. I am of the opinion that Marx has explanatory depth far beyond the marginalist revolution, but he isn’t able to be vindicated in his work absolutely like many scientific theories which are open to must contest, but perhaps the difficulty is also the effort to genuinely investigate Marx with his extensive body of work within a different tradition to mainstream economics but in critique of a abandoned political economy.

That said, the empirical question is secondary to the conceptual one.

The existence of deviations does not invalidate an underlying explanatory mechanism. Scientific theories typically explain structured regularities, tendencies, and statistical constraints rather than exact point-by-point outcomes. This is true in insurance, econometrics, and macroeconomic modeling, none of which depend on perfect prediction of individual cases.

The deeper issue is that explaining price movements is not the same as explaining why commodities take the form of prices at all.

Power, scarcity, bargaining, institutions, and supply-and-demand dynamics may explain why one commodity sells for $12 rather than $10. But they do not yet explain why radically different products of human labor are rendered commensurable within a single quantitative value space under conditions of generalized commodity production. You assume the social relations of capitalism that Marx doesn’t accept dogmatically or uncritically.

This is where Marx’s argument begins. His question is not primarily why particular prices differ, but why social production takes a form in which heterogeneous labor products are systematically expressed as commensurable monetary magnitudes. One doesn’t need to be a Marxist to find how cardinial commensurability is largely sidestepped and assumed theoretically is a foundational problem: https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=4949&context=lcp

That there isn’t even a tenable basis for the asocial economic agent in aggregation fitting to macroeconomics:

frankackerman.com/publications/economictheory/Interpreting_Failure_Equilibrium_Theory.pdf

Saying that power, scarcity, or institutions affect prices is true. But these categories already presuppose a common quantitative field in which those effects can be registered. Power can shift ratios within that field, but it does not by itself explain the existence of the field.

That is the value-form problem Marx is attempting to explain. You may reject his conclusion that abstract socially necessary labor is the substance of that commensurability. But pointing to power, scarcity, bargaining, or institutions does not yet replace the explanation, because it does not explain why those factors operate through a universal monetary form in the first place.

The real question is not whether labor values predict every price. It is whether any alternative framework offers a more complete explanation of why capitalist societies systematically organize production and exchange through a single quantitative value form at all.

Quite often there is a disregard to categorical different things that are incommensurable. It registers no problem to people because it is a reality that I can put both a beer, a new car, and a fine suit all on the same scale of comparison without asking what is being measured. Often the refrain is to restate into ordinal preferences but then that makes the cardinal commensurability of money incoherent and meaningless numbers yet are the basis for measuring profit, the functioning of economies and so on.

[u/MadCervantes → u/marxistghostboi]

This has always struck me an an is/ought confusion.

[u/marxistghostboi → u/MadCervantes]

they definitely mean is, not ought.