When one first enters the world of Marxist political economy it appears as a daunting task. Where to start? What to read? Perhaps you attempt to start with Capital Vol. 1. Perhaps you start with a couple of blogs and articles. Wherever you start, if you have no background in philosophy it can seem like a bit much. The difficulty of Marxian economic theory is not that it speaks with some philosophical terms, for all economic theory is laden with terms that originate in philosophical thinking. The difficulty is generally of two kinds: one is not used to the technical language and dialectical style of Marx, and/or one is already acquainted with other systems of standard economic theory which makes it difficult to grasp even the basic beginner concepts of a new theory since old definitions block understanding of new conceptions. One such concept which people have great trouble with in Marxian economic theory is value. I will assume the reader already knows the standard conceptions of what economic value (utility) is and shall focus on explaining the Marxian concept of value.
Marx’s theory of economic value is well known as a labor theory of value (LTV). There are two values Marx distinguishes as being at work in our modern world: use-value and exchange value. Use-value is the use (utility) a commodity has for us, what we desire it for. Exchange value is what a commodity trades for, or what you generally understand as being its price. Use-value is psychologically driven and only accounts for the kinds of things we want, not the value they exchange for, because of this Marx dwells little with this type of value. From here on value refers exclusively to exchange value. Let it be said before there is any confusion: value and price are not the same concept and serve different functions in reality. Ideally value and price would be the same, but because of the complexities and fluctuations in the real world these two rarely align for long. There are also things which have a price that have no value, and it will be left for another article to explain what this exactly means and why it is the case.
The big question that should be on one’s mind at this point should not be the elaboration of this theory of value, but rather what justifies the claim that labor is the only source of value, the foundational claim of the LTV? There are many that dispute this, and many elaborate theories have been constructed about other things value can just as easily be based on such as physical goods production, etc. There is actually a quite good and simple point that explains why human labor is the sole source of value. Supposing that there is an industry that is completely automated and devoid of human labor inputs of any form, not even occasional maintenance, would the products of this industry have a value? Would anyone pay for the products of this industry directly? Let us be naïve and tentatively say ‘yes’. Who exactly are we paying? The managers of this industry? They’re machines. The workers? They’re machines. But, you may say, how do you know machines don’t produce value? Well, because we don’t recognize the work of machines as something that requires anything in exchange for being done, nor do machines demand us to.
Machines have no desires to fulfill, no social obligations, such as payment they demand us to meet in order for them to do work. If you paid a machine for its work, what would it do with it? Nothing. Machines work and keep working until they can’t; that is all there is to them in a sphere that only inputs but never needs to take from the economy. The fully automated industry creates its products, we take it, and the machines keep on working to create the products. These products are free because they have no value, there is no conscious being behind it all that will refuse to hand over or make the product if it isn’t compensated for its labor. Maybe these products are picked up by truckers, taken to warehouses, and distributed in malls, and thus these items gain value through this human labor, but as far as the machines go there is no value that anyone recognizes. If these items have a price at the end of the day it is only because after being produced, a human being somewhere has a hand in its movement and distribution even if they are behind a fleet of automatic drones doing the physical work. Anything that is paid is always paid to a person who engages in the economic sphere to give and take according to the value they command. The recognition and realization of value is a relation between human beings and nothing else.
Supposing that someone owned that fully automated factory, anything he charges is just an arbitrary price gate enforced by government force, and there is no value being recognized in the price. If machines ever become sentient, acquire self-determination, and desires to fulfill, then their work will create value, until then human beings and their labor is the only source of value. All things traded, all things bought, are only recognition that somewhere, somehow, a person spent a portion of their life working to move, create, and get you to buy a commodity.