Question

Discuss Marx’s theory of value comparing it with that held by other economists we have discussed.

Answer 1

MARX'S THEORY OF VALUE

The theory of value was put forward by the most celebrated economist and historian in the world, Carl Marx. The theory of value explains about the central idea that the value of any commodity can be measured by calculating the average number of labor hours required to produce that commodity. For example if a shirt is produced in two weeks and a pant is produced in a week then the Competitive price of pant will be twice the price of the shirt.

The theory of value give importance only to the workforce or labor involved in the production of commodities and ignores the physical inputs that are required for the production. The theory explains that economic value of all the goods and services are determined by the amount of labor force involved in the production of that particular commodity.

The theory tries to understand the value of the commodity in the terms of labor involved in it. And the theory outlines the importance of labor or the work force. But there exists many criticize for the theory of value and questions the basic ideas in it. The most important among it is the value of the product can't be measured only by the calculation in the work force involved in it. But the value of product is also dependent on the raw materials used in the production and other production factors also influence the value of the commodity.So these are the important points in the theory of value put forward by the Marx and it is explained in his book "Capital".

The theory of value is a central Marxist ideology but it has appeared in the theories of economists like Adam Smith and David Ricardo. Smith consider the price of commodity in terms of the labor that the purchaser want to exchange it with. This is how Smith gave his idea on this theory.