Labor Power The pillar of Marx’s economics is the labor theory of value. According to Marx’s labor theory of value, the laborer deserves all the profits and when taken by capitalists, the workers. Borrowing ideas from Adam Smith, Marx argued that the importance of a commodity manifests in its ability to satisfy specific human needs, which he calls use value. He distinguishes this with exchange value, the amount of another commodity that can be exchanged at any given time. Marx explains that every commodity has value, which portrays its production cost and overall labor-time required to produce it (Marx and Engels 240). The intrinsic value of a commodity, which is labor related, determines its exchange value, a concept he calls the law of value. are robbed of their rightful sweat. This is indeed the reason why Marx called for the elimination of profits and for workers to conquer of capitalists. the value of labor-power manifests as subsistence means.
According to Marx, profit originates from exploitation of workers by capitalists. He explained that profits result when capitalists pay workers less than the actual value they add to the commodities they produce. Marx explains the main distinction between societies by arguing that the difference in the mode in which the surplus-labor is in each case extracted from the actual producer, the laborer (Marx and Engels 241). Despite the fact that capitalist workers, they (workers) cannot stop to work because they have no choice. Workers own labor but lack the means like tools, and raw materials to execute labor. For them to acquire these resources, they have no alternative but to sell their labor-power to the exploitative capitalists. In Marx’s model, profits keep falling because of increased efficiency in production, which translates to less labor utilization and spending more on labor-saving, efficient machinery. As such, the capitalists own attempt to increase profit result into falling rate of profit.
Marx, Karl and Friedrich Engels. Capital: A Critique of Political Economy – Vol. I-Part I: The Process of Capitalist Production, New York, NY: Cosimo, Inc., 2007.