Many liberal economists believe that the Marxist labor theory of value has been "discredited". The labor theory of value predicts that profits will be higher in labor-intensive industries than in capital-intensive industries, and empirical data contradicts this. This is sometimes referred to as the "Great Contradiction." Marx responds to this in his third volume of Capital with his competition of capitals theory, a mathematical transformation that has been fiercely debated. Most economists today also contest that the value of capital is limited to the "congealed labor" that it took to build the capital when that capital can increase the productive capability of labor much more than that.
Nonetheless, many elements of the theory are still believed to be valid, or the theory is presented in a non-Marxist tradition. For instance, political theorist Kevin Carson's Studies in Mutualist Political Economy opens with an attempt to integrate marginalist critiques into the labor theory of value.
Read more about this topic: Labor Theory Of Value
Famous quotes containing the word criticisms:
“I have no concern with any economic criticisms of the communist system; I cannot enquire into whether the abolition of private property is expedient or advantageous. But I am able to recognize that the psychological premises on which the system is based are an untenable illusion. In abolishing private property we deprive the human love of aggression of one of its instruments ... but we have in no way altered the differences in power and influence which are misused by aggressiveness.”
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