Editing Labor theory of value (section)

=== Origins ===
The labor theory of value has developed over many centuries. It had no single originator, but rather many different thinkers arrived at the same conclusion independently. Aristotle is claimed to hold to this view.<ref>{{cite book |last=MacIntyre |first=A. |year=1988 |title=Whose Justice Which Rationality |location=Notre Dame |publisher=[[University of Notre Dame]] |page=199 |isbn=978-0-268-01942-6}}</ref> Some writers trace its origin to [[Thomas Aquinas]].<ref>{{cite book |last=Russell |first=Bertrand |author-link=Bertrand Russell |year=1946 |title=History of Western philosophy |page=578}}</ref><ref>{{cite book |last=Baeck |first=L. |year=1994 |title=The Mediterranean tradition in economic thought |location=New York |publisher=[[Routledge]] |page=151 |isbn=978-0-415-09301-9}}</ref> In his ''[[Summa Theologica|Summa Theologiae]]'' (1265–1274) he expresses the view that "value can, does and should increase in relation to the amount of labor which has been expended in the improvement of commodities."<ref>{{cite book |first1=Austin J. |last1=Jaffe |first2=Kenneth M. |last2=Lusht |chapter=The History of the Value Theory: The Early Years |page=11 |title=Essays in honor of William N. Kinnard, Jr |year=2003 |location=Boston |publisher=[[Kluwer Academic]] |isbn=978-1-4020-7516-2}}</ref> Scholars such as [[Joseph Schumpeter]] have cited [[Ibn Khaldun]], who in his ''[[Muqaddimah]]'' (1377), described labor as the source of value, necessary for all earnings and [[capital accumulation]]. He argued that even if earning "results from something other than a craft, the value of the resulting profit and acquired (capital) must (also) include the value of the labor by which it was obtained. Without labor, it would not have been acquired."<ref name="Oweiss">{{cite book |first=I. M. |last=Oweiss |year=1988 |chapter=Ibn Khaldun, the Father of Economics |title=Arab Civilization: Challenges and Responses |publisher=[[New York University Press]] |isbn=978-0-88706-698-6 |page=114}}</ref> Scholars have also pointed to [[Sir William Petty]]'s ''Treatise of Taxes'' of 1662<ref>{{cite book |volume=I |first=Vernon L. |last=Parrington |title=Main Currents in American Thought, 1620-1800 |year=1927 |url=http://xroads.virginia.edu/~Hyper/Parrington/vol1/bk02_01_ch03.html |at=Book Two, Part One, Chapter III. Benjamin Franklin: Our First Ambassador |archive-url=https://web.archive.org/web/20191024162257/http://xroads.virginia.edu/~hyper/Parrington/vol1/bk02_01_ch03.html |archive-date=24 October 2019}}</ref> and to [[John Locke]]'s [[labor theory of property]], set out in the ''[[Two Treatises of Government|Second Treatise on Government]]'' (1689), which sees labor as the ultimate source of economic value. [[Karl Marx]] himself credited [[Benjamin Franklin]] in his 1729 essay entitled "A Modest Enquiry into the Nature and Necessity of a Paper Currency" as being "one of the first" to advance the theory.<ref>{{cite book |first=Karl |last=Marx |author-link=Karl Marx |title=Value, Price and Profit |title-link=Value, Price and Profit |date=1865 |chapter=VI}}</ref>

[[Adam Smith]] accepted the theory for pre-capitalist societies but saw a flaw in its application to contemporary [[capitalism]]. He pointed out that if the "labor embodied" in a product equaled the "labor commanded" (i.e. the amount of labor that could be purchased by selling it), then profit was impossible. [[David Ricardo]] (seconded by [[Karl Marx|Marx]]) responded to this paradox by arguing that Smith had confused labor with wages. "Labor commanded", he argued, would always be more than the labor needed to sustain itself (wages). The value of labor, in this view, covered not just the value of wages (what Marx called the value of [[labor power]]), but the value of the entire product created by labor.<ref name="ormazabal" />

Ricardo's theory was a predecessor of the modern theory that equilibrium prices are determined solely by [[Cost-of-production theory of value|production costs]] associated with [[Neo-Ricardianism]].<ref>{{cite web|url=http://cepa.newschool.edu/het/schools/neoric.htm |title=The Neo-Ricardians |access-date=2004-08-23 |url-status=bot: unknown |archive-url=https://web.archive.org/web/20090418155154/http://cepa.newschool.edu/het/schools/neoric.htm |archive-date=April 18, 2009 |publisher=[[New School University]]}}</ref>

Based on the discrepancy between the wages of labor and the value of the product, the "[[Ricardian socialists]]"—[[Charles Hall (economist)|Charles Hall]], [[Thomas Hodgskin]], [[John Gray (19th century socialist)|John Gray]], and [[John Francis Bray]], and [[Percy Ravenstone]]<ref>{{cite web|url=http://cepa.newschool.edu/het/schools/utopia.htm |title=Utopians and Socialists: Ricardian Socialists |access-date=2015-07-12 |url-status=bot: unknown |archive-url=https://web.archive.org/web/20040214153800/http://cepa.newschool.edu/het/schools/utopia.htm |archive-date=February 14, 2004 |publisher=History of Economic Thought, [[New School University]]}}</ref>—applied Ricardo's theory to develop theories of [[Exploitation of labour|exploitation]].

Marx expanded on these ideas, arguing that workers work for a part of each day adding the value required to cover their wages, while the remainder of their labor is performed for the enrichment of the capitalist. The LTV and the accompanying theory of exploitation became central to his economic thought.{{cn|date=March 2025}}

19th century [[American individualist anarchists]] based their economics on the LTV, with their particular interpretation of it being called "[[Cost the limit of price]]". They, as well as contemporary individualist anarchists in that tradition, hold that it is unethical to charge a higher price for a commodity than the amount of labor required to produce it. Hence, they propose that trade should be facilitated by using notes backed by labor.{{cn|date=March 2025}}