Question

Explain marxian theory and labour theory of value with example of a country other than India.

Answer 1

Answer:-

Marxian theory of value in economics says that the value of a commodity can be objectively determined by the average number of labor hours required to produce a item/ commodity.

Example:- A shirt will take less time to produce than a pair of shoes, then it costs less than a pair of shoes. Because labor hours used in shirt will be less than labor hours used in pair of shoes. A pair of shoes will require more labor hours as comapred to shirt.

Labour theory of value says that economic value of goods or services is determined by total amount of socially necessary labour required to produce it. This theory is developed by David Ricardo and modified by Karl Marx. According to Adam Smith, if one thing requires twice as much labour to produce as compared to other thing required, then it would be twice in value.

This theory was developed by Ricardo to explain the determination of relative prices on the basis of quantities of labour. Determination of prices would depend on the labour employed.

Example:- 'A' item requires 10 hours to produce and another item B' requires 5 hours to produce, then the item A will cost double than item B.