Labour Theory of Value

Question 1

Smith’s Labour Theory of Value

Answer 1

• Hours to make commodity = value in primitive society
• Market society = value of commodity determined by no. of labour hours
• Exchange value shared into wages, profits, rents = relative harmony
• Exchange price gravitate to price corresponding to no. of hours put into something (value)

Question 2

Ricardo Labour Theory of Value

Answer 2

• Capitalist
• Value proportionate to amount of hours put into produce
• Including producing raw materials and machinery
• Wages, profits and rent = proportionate share of fixed value sum
• Value = fixed sum - NOT determined by market
• Larger proportion to Capitalists = less to others
• Beginnings of class struggle - one gets more, others less
• Less harmonious

Question 3

Ricardian Socialism

Answer 3

• Take Ricardo’s work and say exploitation of working class
• LTofV political weapon for Ricardian Socialists
• Value based solely on labour so profit and rent TAKEN from workers
• Appearance of Marxist ideals

Question 4

Marx’s Labour Theory of Value

Answer 4

• LTofV developed exploitation theory
• Value of commodity determined by labour time required for production
• Only living labour creates value, not machines
• Workers exchange labour power for wages
• Wages pay subsistence needs
• Surplus value legal property of owners

Question 5

Social Unrest

Answer 5

• 1800: Combination Act - no trade unions
• 1834: Collaboration of trade unions
• 1834: Reform poor law - poor relief only given in workhouses
  - Given food there so basically living there
• 1860s: outbreak industrial conflict - stability of nation threatened; combination act had failed
• 1871: Trade Union Act - immunity from prosecution for trade union members
• 1880s-1890s: Lots of strikes - influenced by Ricardian Socialists