Marx's labor theory of value: some definitions
Labor theory of value: a theory in the science of political economy (now called economics) to explain how the working class are exploited under capitalism and how capitalist society works.
Labor Theory Of Value basically explains what fixes the value of a commodity. The value of a commodity can be objectively measured by how many labor hours are required to produce a commodity from start to finish.
Value: used up human energy (labor power).
Wealth: anything useful produced by human labor from materials found in nature.
Wealth takes the form of commodities under certain social conditions, specifically when it is produced for sale.
Commodity: an article of wealth produced for the purpose of being exchanged for other articles of wealth. Thus commodity production is an economic system where wealth is produced for sale, for the market.
Labor (used up human energy) takes the form of "value" when it is made to be exchanged for money.
Surplus value: the difference between the value workers create (eg, $50-$75/hr in profits for employer) and what workers are paid in wages (eg, $17/hr).
Capital Accumulation: capital accumulates into fewer hands through the reinvestment of surplus value.
Understanding capitalism
Capitalism: a market-based commodity-producing economic system controlled by capital; money used to hire labor for wages. Capitalism can also be defined as a wages system of employment.
The wages system of employment is a social system where a tiny minority of men and women own so much wealth, that they can live without having to work, and can live off the surplus value derived from the profits created by workers. This tiny minority in society is known as the capitalist class.
The capitalist class employs the majority of those in society who do not own sufficient capital of their own, and have only their labor to sell to the capitalist class. This majority in society is known as the working class: anyone who works for a wage or salary to pay bills.
Capitalism is a social system where a tiny minority own the means of production and have their property rights backed by the state: a law-making, law-enforcing, institution which has the legal right to violence over a certain geographical region.
State Capitalism (eg, Cuba, N Korea, USSR), is a social system where the capitalist class works collectively in a bureaucracy through the state. The working class must still sell its labor in exchange for wages so it can buy back from the asset-holding elite the working class itself produces.
Socialism is a borderless world where money and governments have been abolished. This system comes after the working class has decided that value is a construct and that we in society can continue to produce without currency and run society voluntarily. This transformation of society can only come about when a clear majority of the working class has a change in consciousness. There have been no historical examples of this taking place; therefore, there have been no attempts at socialism.
Propaganda is the attempt to keep people confused about the difference between socialism and capitalism. The ruling class is never going to allow the education necessary to aid the working class in the change in consciousness necessary to achieve socialism. They will always conflate socialism as state capitalism in mainstream media and educational institutions.
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