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LaborTheoryofValue.com

The purpose of this page is to question the labor theory of value (LTV) and to challenge true believers of this dogma to defend it. The main defenders of the theory are Marxists of one kind or another, but many non-Marxists also seem to believe this doctrine in some form.

Marxist intellectuals try to dignify LTV by attributing it to Adam Smith and David Ricardo. But citing ancient sages, or even Popes, or even Jesus Christ, is not good enough. Any of these revered icons could be wrong, because we have our own questioning minds and don't need Holy Writ or Papal Bulls to dictate to us what to think.

Here is a statement of LTV from Marx's Value, Price and Profit:

A commodity has a value, because it is a crystallisation of social labour. The greatness of its value, or its relative value, depends upon the greater or less amount of that social substance contained in it; that is to say, on the relative mass of labour necessary for its production. The relative values of commodities are, therefore, determined by the respective quantities or amounts of labour, worked up, realised, fixed in them. The correlative quantities of commodities which can be produced in the same time of labour are equal. Or the value of one commodity is to the value of another commodity as the quantity of labour fixed in the one is to the quantity of labour fixed in the other.

For a systematic presentation of the LTV go to Labor Theory of Value -- Frequently Asked Questions.

Quoting from the above:

"The LTV is restricted to the analysis of reproducible commodities that have a use value in a capitalist society."

Does this mean that LTV has no application to commodities that are not "reproducible"? Why? Why shouldn't it apply to ALL commodities that have use value and are bought and sold in the marketplace?

What about unique commodities which appear only once? What about a commodity which bombs in the market and is discontinued? This doesn't mean it has no "use value". It means that the production cost was far too high, and the commodity had to be sold at a loss. But it still had a small "use value" and buyers were willing to pay a low price for it.

Major Flaw in LTV

So here is a major hole in the LTV. A true theory of value, if it is to have respectability, must be one which accounts for ALL values in the marketplace, ALL the commodities which are bought and sold, not just the successful ones which bring in hefty profits or which are produced again and again in factories over an extended period.

Why shouldn't a true theory of value explain ALL the values in the marketplace? Including that of commodities which are not reproducible? To run away from this task is to admit that your theory of value is fundamentally defective and cannot really explain what value is or how it is determined.

Challenge to any LTV believer:

What is the value of a commodity which required high labor input but which is unable to command a decent price in the marketplace? a product which cost e.g. $500 per unit to produce (in labor cost) but which does not sell, because of low demand, except when its price is reduced to $20 or $50 or so?

Perhaps such a product is not "reproducible" in the sense that no producer is going to waste any more resources on it and it will never be produced again. But the fact is that it exists in the first instance and does have some value in the market, i.e. "use value", because consumers are willing to pay a small price for it. So . . .

WHAT IS ITS VALUE??????

Answer this question (click here) if you think the labor theory of value can be salvaged.

This question was put to the author of the above FAQ article. Here is the exchange:

from Freetrader to Robert Vienneau:

"I didn't see an answer in your FAQs to the following: If a commodity requires a great amount of labor but does not sell except at a great loss to the producer, because of low demand, what is the value of that commodity?

Is the value of that commodity high because of the great amount of labor input required to produce it?

This would be a case of a product which turns out to be a bad idea, and so the investor in that production would suffer a loss.

Does it make sense to say a product has a high value even though the demand for it is low and it cannot be sold except at a huge loss to the producer?

Freetrader@aol.com

Reply from Vienneau to Freetrader:

I believe the answer is implicit in what's there in my FAQ. Look ar 5.4 and 5.5. I suppose it is also useful to understand how Marx related prices of production to labor values (6.3).

Robert Vienneau
rvien@dreamscape.com
Rome, NY

EXCERPT (cited above) FROM FAQs on Labor Theory of Value

5.4 How are prices of production related to market prices?

The actual price at which any commodity is commonly sold is called its market price. It may either be above, or below, or exactly the same with its [price of production]. (Smith 1776, Book I, Chapter VII)

The price of production, therefore, is, as it were, the central price, to which the prices of all commodities are continually gravitating. Different accidents may sometimes keep them suspended a good deal above it, and sometimes force them down even somewhat below it. But whatever may be the obstacles which hinder them from settling in this center of repose and continuance, they are constantly tending towards it. (Smith 1776, Book I, Chapter VII)

The articulation of this metaphor of prices of production acting as centers of gravitational attraction is a research question among some contemporary economists. For example, even if one does not think market prices tend toward prices of production, might the differences between market prices and prices of production be useful in analyzing investment plans?

5.5 What is the "realization problem?"

The realization problem is Marxist terminology arising in the analysis of differences between market prices and prices of production. If proportions between industries are inappropriate, some capitalists firms may find that they cannot sell all of their output at the corresponding prices of production. Or there may be a general overproduction in which all the commodities produced cannot be sold.

(Marx, in contrast to some Classical economists, denied Say's law. Say's law implies that persistent general overproduction (depression) is impossible.) In either case, not all firms will receive the appropriate rate of profit for their cost structure. Consequently, capitalists will disinvest in some sectors and more heavily invest in others. This process will cease only if all firms can sell their output at prices of production. Adam Smith called this level of output the level of "effectual demand." Notice that effectual demand is a specified quantity, not a schedule relating quantities and prices.

Reply from Freetrader to Vienneau:

Thanks for answering my inquiry about the "value" of a product which required high labor cost but which fetches only a low price in the marketplace and is a big loss to the producer/investor. The question is whether this kind of product has high value despite the minimum demand for it, or if the labor theory of value is simply irrelevant in this case.

You answered:

"I believe the answer is implicit in what's there in my FAQ. Look at 5.4 and 5.5. I suppose it is also useful to understand how Marx related prices of production to labor values (6.3)."

Although 5.4 and 5.5 approach the question I asked, they do not answer it. 5.4 says the price hovers above and below the production cost. But in my example the price goes way down below that figure and stays there. It does not "tend toward" the production cost as the quote says.

What is the "value" of this commodity if it never tends toward the production cost but remains way below it and is a hopeless loss for the producer which cannot be recovered?

You say: "even if one does not think market prices tend toward prices of production, might the differences between market prices and prices of production be useful in analyzing investment plans?"

I.e., decision to invest in this bad product was a bad investment decision. Yes, but isn't that another way of saying that the "value" of the product was too low, i.e., way below the cost of the labor? Aren't you admitting that the "value" was not the same as the labor cost but is determined by the demand for the product in the marketplace (or lack of demand in this case)?

5.5 says that some companies will lose money in this case and will disinvest as a correction, and that output will decrease and so on. But what if we're talking about only one company which made this one bad investment decision and produced this one bad product. It finally sells, but only at 10% of the cost of production. Then it is discontinued and never produced again.

Such things happen in the real world!

What is the value of that one product? It finally sells (does have some minimal use value to consumers). But it is a total loss, and there is no "process" here of reduced output, and no long-term adjustment where price gravitates toward cost.

Is the labor theory of value unable to account for such commodities in the marketplace? Is LTV irrelevant or meaningless in this case?

Don't all products in the marketplace have some value, even if minimal? And mustn't a theory of value account for the value of all commodities bought and sold in the marketplace no matter what the circumstances? including the ones which were a mistake and were discontinued? Don't these products have some minimum value during the time they are offered? But surely it is not the same as another product which sold out immediately, even though the labor cost for both was the same?

How does LTV account for this?

There was no further response from Vienneau.

Another flaw: Why isn't the "work" (efforts, time spent thinking, conniving, etc.) of directors and investors also included as "labor time"? Isn't any human activity, no matter what, which is involved in bringing about the production, a part of the "labor" embodied in the commodities?

Why are only the wage-earners defined as "laborers"?

This is a flaw for Marxism, because the concept of "surplus value" in Marx is based on the premise that the income of investors or profit is not part of the value of the production. The "surplus value" is the extra value expropriated by the capitalists beyond what they pay to the workers. But if the investors are considered as "workers" who performed a needed service with their investment activity, then Marx's "surplus value" vanishes. And yet what is the scientific/logical basis for excluding investment activity from being part of the "work" needed in order to get the production done?

A Better Theory of Value

(The Correct Theory)

Here is a quote from classical economics, before Marx, Ricardo, and Adam Smith. What is wrong with using this text as the basis for a theory of value which answers all the questions (such as the question above which the labor theory cannot answer)?:

Nicholas Barbon, A Discourse of Trade (1690):

The Price of Wares is the present Value. . . . The Market is the best Judge of Value; for by the concourse of Buyers and Sellers, the Quantity of Wares, and the Occasion for them are the Best known: Things are worth just so much, as they can be sold for, according to the Old Rule, Valet Quantum Vendi potest." [It is worth as much as it can be sold for.]

An alternate version of this quote is: Res valet quantum vendi potest. (A thing is worth as much as it can be sold for.)

The Price of Wares is the present Value, And ariseth by Computing the occasions or use for them, with the Quantity to serve that Occasion. . . . It is impossible for the Merchant when he has Bought his Goods, to know what he shall Sell them for [it is not dictated by the production cost]: The Value of them, depends upon the Difference betwixt the Occasion [demand/use/need] and the Quantity [supply]; tho' that be the Chiefest of the [Merchant's] Care to observe, yet it Depends on so many Circumstances, that it's impossible to know it. Therefore if the plenty of the Goods, has brought down the Price; the Merchant layeth them up, till the Quantity is consumed, and the Price riseth.

. . . The Value of all Wares, arriveth from their Use [demand for them]; and the Dearness and Cheapness of the them, from their Plenty and Scarcity [supply].

(Quoted from Ronald L. Meek, Studies in the Labor Theory of Value)

This statement, though not precise, pretty much covers all bases. It explains "value" far better than Smith, Ricardo, or Marx, who ignore basic questions which must be answered, such as: What is the value of a commodity which was expensive to produce, but for which the demand is low? The answer is that its value is low, despite the high labor input to produce it.

What's wrong with the Barbon quote? Why not use this as the foundation for the theory of value? What is the flaw in this theory? The author of the above book, Ronald L. Meek, does not give any argument against this theory. He presents it as an interesting observation, then passes it by without any criticism, as though it were irrelevant.

There is really only one difficulty with Barbon's theory: What about cases where a buyer gets a real bargain, because the seller is unaware of the much higher price he could charge, for whatever reason? or the case where the price is "gouged" and the buyer gets gyped?

In other words, there are cases where the actual selling price of a commodity might be obviously too high or too low in a given situation in the market. And an observer might say, "That's a steal" or "That's overpriced, that's highway robbery."

The phenomenon of overpricing and underpricing can be easily accommodated to the Barbon theory, or the Rule Valet quantum vendi potest.

The theory can be modified thus: The value of a commodity is whatever it can be sold for in the market, provided that there is competition in that marketplace and provided that the buyer and seller are both reasonably informed of the supply and demand conditions for that commodity.

It is extreme lack of competition or extreme ignorance on the part of either the buyer or seller which leads to the condition of overpricing or underpricing. Except for these conditions which "distort" the prices, the market price is essentially identical to the value (or so close to the value as to make any discrepancy trivial).

What is wrong with this theory of value? What is left out of account?

Given this practical definition of "value", why do we need Smith, Ricardo, or Marx? Why do we need their over-complicated explanations which go on for pages and pages of gibberish and semantics and cumbersome terminology? and which don't answer simple basic questions taken from real life?

That theory which best answers the questions is the best theory.

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Here is a response which seems at first glance to be a defense of Marx or of the labor theory of value. But if you read closely, there's no effort here to explain LTV or try to justify it. This basically says Marx might not really have believed in LTV, even though he put forth the theory, like in the quote at the beginning above, presenting it as being true.

Response from Evan

fauowl20@yahoo.com

Im currently doing my masters at the University of Amsterdam in social theory and public affairs and do consider myself a neo-marxist, so i do believe i have an answer to your question about the value of a commodity that cost so much to produce yet does not sell until the price is significantly dropped. I also realize your disagreements with Marx and feel he does not include the value of this commodity.

However you are correct about this commodity having some sort of value, but what you failed to realize with Marx is that he did recognize the value of such commodities. He stressed that there is the labor value, however he also included the 'use value' of such a commodity.

Marx emphasizes that the use-value of a labor-product is practical and objectively determined, i.e. it inheres in the intrinsic characteristics of a product which enable it to satisfy a human need or want. The use-value of a product therefore exists as a material reality vis-a-vis social needs regardless of the individual need of any particular person. The use-value of a commodity is specifically a social use-value, meaning that it has a generally-accepted use-value for others in society, and not just for the producer.

The concept is introduced at the beginning of Das Kapital, where Marx writes:

"The utility of a thing makes it a use value. But this utility is not a thing of air. Being limited by the physical properties of the commodity, it has no existence apart from that commodity. A commodity, such as iron, corn, or a diamond, is therefore, so far as it is a material thing, a use value, something useful.

"This property of a commodity is independent of the amount of labour required to appropriate its useful qualities. When treating of use value, we always assume to be dealing with definite quantities, such as dozens of watches, yards of linen, or tons of iron. The use values of commodities furnish the material for a special study, that of the commercial knowledge of commodities.[5]

"Use values become a reality only by use or consumption: they also constitute the substance of all wealth, whatever may be the social form of that wealth. In the form of society we are about to consider, they are, in addition, the material depositories of exchange value."

I know we have different points of view but i hope this points out to you that Marx does realize the use value of such a commodity and its value involves the utility of such commodities. Therefore, even though the product that cost 500 dollars in labor to produce and doesn't sell until the price is about 20-50 dollars, the value still lies in the use of this product.

Thus the consumer who didn't think they needed to use this product when it cost 250 dollars yet thought it useful at 20-50 bucks. There it is!!! This is the use value of it, not the actual value of it. This is how Marx differentiates the two.

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The above does not rescue either Marx or the Labor Theory of Value. Let's dissect it:

". . . but what you failed to realize with Marx is that he did recognize the value of such commodities. He stressed that there is the labor value, however he also included the 'use value' of such a commodity."

I believe Marx used the term "exchange value" rather than "labor value." In any case, is there really any difference between "use value" and "labor value"? The value has to be identified in terms of dollars or money or some measure. The exchange value might be defined as the amount of other stuff you can get in exchange for the commodity. (And this is proportional to the quantity of labor congealed into the commodity, according to LTV.) But why is this any different than the use value? The higher the use value is, the more exchange value it has. Since the two do not conflict with each other, why not just say they're the same thing? Two different terms for the same value.

There are not really two different values -- "labor value" and "use value". There is only one value, which can be explained in terms of the use (or potential use) to be made of the commodity, or in terms of what it can be exchanged for. The higher use-value in effect constitutes the higher exchange value and is really identical to the exchange value, both measured in dollars or some other unit of exchange. And meanwhile, the "labor value" or labor input, in and of itself is irrelevant.

If two commodities are identically the same in every way, but are different only in how they were produced, and one had a high labor input while the other had virtually no labor input, these two commodities would have the same value. They would have the same use value and the same exchange value. But one would have a high labor input (and thus a high value, according to LTV) while the other would have a low labor input (and thus a low value, according to LTV). But LTV is clearly wrong here, and this ought to be enough to demonstrate that the labor input has nothing directly to do with value (use value or exchange value).

"Marx emphasizes that the use-value of a labor-product is practical and objectively determined, i.e. it inheres in the intrinsic characteristics of a product which enable it to satisfy a human need or want."

But the same is true of the exchange value. Both the use value and the exchange value are subject to change. A commodity may have a higher use value on Monday than it does on Tuesday. An item could totally lose its use value with the passing of time, even a short time. And right along with this changing use value goes its changing exchange value. They are the same. There are not two different values here. Every commodity has one value at any given time. And it is not measured in terms of the labor input as Marx says in the quote at the beginning:

"The greatness of its value, or its relative value, depends upon the greater or less amount of that social substance contained in it; that is to say, on the relative mass of labour necessary for its production. The relative values of commodities are, therefore, determined by the respective quantities or amounts of labour, worked up, realised, fixed in them."

Marx is wrong here. You don't get him off the hook by saying there is a difference between "use value" and "labor value" or "exchange value". No, there is no difference -- The use value and exchange value go up and down together, in lock step, so that there is no reason to separate them into two different values.

Meanwhile, it would not be correct to say that labor input is totally irrelevant. Rather, the amount of labor required to produce a commodity is sure to have an impact on the supply of the commodity. So indirectly the labor input can impact on the price/value of a commodity by causing it to be more scarce or less scarce. But the labor input does not directly determine value. It is supply and demand which determine the value, and labor input can influence the supply/scarcity factor.

But Marx is wrong in saying (in the quote above) that the quantity of labor contained in the commodity determines the value of it. He is wrong because he leaves out of consideration the example of a commodity that required heavy labor input but cannot sell due to low demand for it.

"The use-value of a product therefore exists as a material reality vis-a-vis social needs regardless of the individual need of any particular person. The use-value of a commodity is specifically a social use-value, meaning that it has a generally-accepted use-value for others in society, and not just for the producer."

The same is true of exchange value. The exchange value and the market price are virtually the same thing. And it goes hand-in-hand with the use value. Both go up and down together.

And if the product is something the government does, like roads and police etc., these values tend to be more distorted due to the lack of competition, and so the "market value" is more difficult to identify. But we do the best we can to keep the cost of these as close to what a competitive market would offer if it were possible. And we resign to having to pay a higher price for these than if there could be a competitive marketplace in these values.

The point is that "use value" is not some separate value from the real value or the exchange value or the market value.

"The concept is introduced at the beginning of Das Kapital, where Marx writes:

"The utility of a thing makes it a use value. But this utility is not a thing of air. Being limited by the physical properties of the commodity, it has no existence apart from that commodity. A commodity, such as iron, corn, or a diamond, is therefore, so far as it is a material thing, a use value, something useful."

And it is also an exchange value. Everything said above about use value can also be said of exchange value (market value). The notion that "use value" is some additional value other than exchange value is false. Rather, the exchange value is derived from the use value of a commodity.

"This property of a commodity is independent of the amount of labour required to appropriate its useful qualities. When treating of use value, we always assume to be dealing with definite quantities, such as dozens of watches, yards of linen, or tons of iron."

In some way Marx is trying to separate "use value" from "exchange value" by saying the use value is wrapped up in the particular materials of the commodities, the metal and fabrics, the concrete stuff itself, etc. But the fact remains that the use value goes up and down directly in proportion to the exchange value, and there can be no exchange value without the use value that it is based upon. The separation of the two is artificial.

The question, "What is the value of this?" is essentially the same as the question, "What price should be paid for this?"

If there is any difference between these two questions, what is that difference? What is the difference between the value of a commodity and the price that should be paid for it?

There being no answer to this, it can only be assumed that the two are the same. The value of it and the price that should be paid for it are the same quantity. And this being the case, isn't it obvious that there is ONLY ONE value of a commodity rather than two? Isn't it obvious that the value, whether it's called "use value" or "exchange value" or "labor value" -- the value is ONE, and not divided into 2 or 3 different entities?

And all arguments based on the notion that there is a different value, "use value", separate from the real value or the exchange value, are incorrect. And it is thus incorrect to say that one value of a commodity is related to the labor input while another, the use value, is not. No, there is only one value, based on the use or need or want for the commodity and also on the supply of it, and the labor input indirectly affects the supply but does not determine the value, because the value is determined directly by supply and demand and nothing else.

"Use values become a reality only by use or consumption: they also constitute the substance of all wealth, whatever may be the social form of that wealth. In the form of society we are about to consider, they are, in addition, the material depositories of exchange value."

It isn't necessary to pick apart the terminology here, the semantics. It is sufficient to say that the real value, the exchange value, the market value -- whatever it's called, this value is totally based upon the use value and goes up and down with the use value. Even if you say the "use" value is "realized" or becomes "a reality" only at the moment of consumption, still the possibility of this value is what constitutes the exchange value, and this possible value does increase or decrease with changing conditions, and that changing possibility of becoming "a reality" is what constitutes the changes in the exchange value. There are not two separate values here. The commodity has only one value at any one time, and the value goes up and down depending upon the ups and downs of how much use benefit it offers to someone.

"I know we have different points of view but i hope this points out to you that Marx does realize the use value of such a commodity and its value involves the utility of such commodities."

I.e., the demand for such commodities, regardless of the labor input. Yes, Marx, in some part of his brain, knew that the labor theory of value was wrong, and that value is determined by supply and demand rather than by labor input. Of course every person with common sense knows that the value of a commodity is determined by the extent of demand (need, want) for the commodity combined with the supply (scarcity or abundance) of the commodity. To find a quote in Marx which betrays this only helps to prove that he is wrong in those other more numerous points where he says the value is determined by the amount of labor input.

And so is it true that grown-up Marxists today finally admit that Marx was wrong about LTV and that the labor theory of value has to be rejected? There cannot be two definitions of value which contradict each other. One says value is determined by the amount of labor input. The other says value is determined by supply and demand regardless of labor input or anything else. One of these is wrong.

"Therefore, even though the product that cost 500 dollars in labor to produce and doesn't sell until the price is about 20-50 dollars, the value still lies in the use of this product."

And what is that value? The value is the 20-50 dollars, regardless of the expensive labor input. And so LTV is wrong, because it says the product is worth 500, no matter what the supply or demand for the product is. Calling it "use value" doesn't change the fact that LTV is wrong, and Marx was wrong when he said the value is determined by the labor input.

"Thus the consumer who didn't think they needed to use this product when it cost 250 dollars yet thought it useful at 20-50 bucks. There it is!!! This is the use value of it, not the actual value of it."

No, the 20-50 bucks is both the use value and the actual value and the exchange value -- It is the real value of the commodity. While the high labor input does not tell us what the value is, because LTV is wrong. If LTV were true, then the real value would be 500, regardless of supply and demand.

"This is how Marx differentiates the two."

Or better yet, Marx was wrong when he advocated the labor theory of value. You don't get him off the hook by saying he seemed to know better in some other quotes, where he admits that LTV is wrong. What he should have done was stop promoting LTV when he really knew better.

Obviously what Marx was doing was pandering to wage-earners who he was trying to recruit into his International Workingman's Association. He was obviously a propagandist and demagogue who would say anything, no matter how empty-headed, to stir up anger among the restless natives and win recruits into his crusade. Outside of this, his theory about value being based on labor input has no merit.

Or at least no one so far has been able to show any merit to the theory. Unless the only purpose of a theory is to instill rage into the masses and herd them into a stampede to revolution.

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The Labor Theory of Value by James W.

Posted on February 4, 2008 at 07:54:59 PM

from the SocialContract.com message board, which is mostly defunct now, due to excess spam

Well, it's important never to confuse "price" with "value". A "use value" only comes about through the expenditure of labor. Coal, timber, grain; all may come from the earth, but they have to be harvested. Labor must be expended for them to have any "use value". There's that. The $500 TV analogy? The price may drop, but the resources, including labor, allocated to create it will not change. The Labor Theory of Value should be interpreted as labor is THE most important part of the process of reproduction. All commodities require labor.

Is value subjective? What if I would only pay for a $20 TV? A business may mark down the price on an item, but it will take a loss. That loss can come from capital stock or wages paid to labor; usually the latter. If a person is willing to pay more, so be it; more profit for the capitalist. It's just plain silly to think that businesses will keep lowering their prices to make sales. Hypothetically, let us say that I, and many millions more people, would only be willing to pay one penny for an automobile. Regardless of DEMAND for that product,there will never be a SUPPLY of if. Why? The manufacturer couldn't turn a profit.

There's the rub: the goal of capitalism is to accumulate more capital. Manufacturing commodities is only a means to an end. Hyundai isn't just going to make you a car because you'll only pay $500 for it. Maybe if they had the available technology and resources to do so and could still turn a profit. As it stands, that ain't gonna happen any time soon. Now, that shouldn't be interpreted as "demand doesn't matter"; that isn't true. Nor is it true that supply doesn't matter. Supply and demand are just corollaries to the LTV.

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RESPONSE to James W:

Well, it's important never to confuse "price" with "value".

What's important is to understand the correct relation between the two.

In an ideal free market with maximum competition and maximum information, so both buyer and seller have complete information, the "price" and "value" are virtually the same.

But there is no ideal free market or ideal anything. Nevertheless, as the market becomes more ideal (more competition and more information to all), the "price" and the "value" come closer together so that there is little discrepancy between them.

An imperfect free market is the best system possible, and it exists in most of the developed countries and many poor countries also. So in general, the "price" and the "value" are about the same, with only minor discrepancies, and occasionally there is fraud or other criminal behavior which distorts this greatly, which is why we need the state to enforce the rules against fraud.

A "use value" only comes about through the expenditure of labor.

Usually, yes. But not always. A piece of land, or a resource on the land may not require any labor, but it still could have a high value.

Coal, timber, grain; all may come from the earth, but they have to be harvested.

Yes, but the final value of that product is not necessarily fixed to the amount of labor required to harvest it. What if you harvest something that nobody wants. The labor was done, but the final product still has little or no value.

Labor must be expended for them to have any "use value".

Yes, but it may still have no use value despite the labor expended. It's not the labor that has intrinsic value, but the satisfaction to the consumer who has a demand for it combined with the availability (or scarcity) of it. If the laborer miscalculates and offers something the consumers don't want, then there is no value, despite the labor.

The $500 TV analogy? The price may drop, but the resources, including labor, allocated to create it will not change.

Right, that proves that the labor is not the determinant of the value. The price drops because the value drops. But the amount of labor required stays the same. So obviously the amount of labor is not what determines the value of the product.

The Labor Theory of Value should be interpreted as labor is THE most important part of the process of reproduction.

No, the labor theory of value, as expressed by Marx and others, is that the quantity of labor involved in creating the product determines the value of the product. And it is wrong. That is not what determines the value.

All commodities require labor.

Almost all. But the quantity of labor involved with producing the commodity is not what determines its value, as the labor theory of value falsely claims.

Is value subjective? What if I would only pay for a $20 TV? A business may mark down the price on an item, but it will take a loss. That loss can come from capital stock or wages paid to labor; usually the latter.

Yes, and what this means is that the excess quantity of labor in that product was greater than the product's value. So that product's value is determined by something other than the quantity of labor required to produce it.

If a person is willing to pay more, so be it; more profit for the capitalist.

Or rather, more value of the product. The higher the price someone is willing to pay, the higher the value of the product. In some cases, the value of the product goes far beyond the quantity of labor required to produce it. Again, it's not the quantity of labor that determines the value, as the LTV falsely claims, but the amount of satisfaction the product offers to consumers combined with the availability or scarcity of it. The more this satisfaction (and greater the scarcity), the more the consumer is willing to pay, regardless of the quantity of labor that was involved.

It's just plain silly to think that businesses will keep lowering their prices to make sales.

In some cases they have to, to cut their loss. They have to end up selling it at its real value, not at the cost they had to pay for it, which was too high. The higher cost generally drives up the price, but if the value is really low, the product just wasn't worth it and should never have been produced. Cost and price/value are related in the supply-demand dynamic, but when there is severe misjudgment and miscalculation by the producer, the discrepancy can be huge, because it is not the cost per se (labor or other cost) which determines the value, but supply and demand.

Hypothetically, let us say that I, and many millions more people, would only be willing to pay one penny for an automobile. Regardless of DEMAND for that product,there will never be a SUPPLY of if. Why? The manufacturer couldn't turn a profit.

But there are less extreme examples where the manufacturer does produce something consumers won't pay for. And in those cases, the labor did not determine the value. The product is real and has to be sold at a loss, lower than the labor cost, because the product's real value is less than the quantity of labor that produced it.

Now, that shouldn't be interpreted as "demand doesn't matter"; that isn't true. Nor is it true that supply doesn't matter. Supply and demand are just corollaries to the LTV.

No, LTV is false. Supply/demand determine value, not LTV. Rather, the more labor, the more difficult to produce and thus the less supply. So labor does bear on the supply and thus on the value and thus is a "corollary" to the value. Only the market supply-demand forces determine the value. While the labor required influences the supply and so has a bearing on the value and price.

The market, or supply/demand, is the final determinant of value, not labor or the satisfaction to the consumer. If something satisfying to the consumer is available without any effort and in abundant supply, then that value could still be small even though the satisfaction is great. E.g., air is very necessary and very satisfying, but because it is abundant and free, it has little value (though when humans eventually live on another planet or asteroid, that could change).