A little while ago Stuart Gort presented a list of various commodities, the comparison between them intended to dash the labor theory of value.
I answered him here and here, correctly I believe---but without enough detail.
: Newport Beach is on the beach. The desire to live on the beach enhances the property value for aesthetic reasons regardless of how much development occurs in Hemet, CA.
This one is the most difficult to explain. This scenario involves a qualification of Marx’s LTV, differential rent.
Marx: 'The differential rent is equal to the difference between market-value and individual value.'(1)
Market-value is the lowest 'productivity' (and that general term will include such unfathomables as 'scenic' property) of land whereas individual value is the actual productivity of the particular land in question.
This means that differential rent is what the land can produce over the least productive.
Lenin (who specialized in the subject): '[D]ifferential rent is the surplus profit over and above the normal, average profit on capital.'(2)
And 'average' here means the lowest productivity that produces a profit.
Productivity is determined by the natural (gratis) productivity of the land, its location AND (certainly) the labor required to produce goods from these two factors.
Marx: 'The price of land is nothing but capitalized and therefore anticipated rent.'(3)
Most rock-bottom unusable land ('worth nothing') eventually becomes developed, owing to the limitedness of land.
When that happens, the formerly least-productive (cheapest) land becomes worth MORE. This is the qualification mentioned above.
Lenin: 'The limitedness of land results in the price of grain being determined by the conditions of production, not on the average land, but on the worst land under cultivation. This price of grain [or lovely beaches] enables the farmer (= the capitalist) profit on his capital. The farmer on the better land obtains an additional profit, which forms differential rent.'(4)
Let us say that unusable land (A) = $0. It's marsh.
And the worst land in 'cultivation' (B) = $5.
When land A finally gets developed, it would seem LOGICAL that it and land B would be equal in value---or does it? Land A required much more plowing, draining, whatever. Yet to say that it would be worth more than land B---assuming that their productivity is equal---would do violence to what was being produced (those equal values of goods).
So...the expense that went into land A makes it worth $5. It's the worst land now. And land B is now, by comparison, better land. Therefore, it is worth $10.
It is worth more because the conditions that determine land productivity in general just went up. And those conditions are not Mother Nature; those conditions are LABOR.
Land B produces everything that land A produces---only it can do so naturally.
And that is why it must cost more. Because the 'expectation' of what land can produce has been MODIFIED by labor costs. Modified upwards.
Lenin: '[W]e have the monopoly (capitalist) of land economy. This monopoly originates in the limitedness of land, and is therefore inevitable in any capitalist society. This monopoly leads to the determination of the price of grain [or a lovely sunset] by the conditions of production on the worst land; the surplus profit obtained by the investment of capital on better land, or by a more productive investment of capital, forms differential rent.'(5)
Now it should be clear why I said: Every time some previously 'worthless' land (say, marshes) becomes developed---which, of course, requires a lot of labor---then the previously cheapest land then becomes 'worth more'---as all land is compared to land AND the labor required to make it productive. Here it should be evident that 'finding' rare land (previously undeveloped land) hikes up the value of all other comparable land as the new land is appraised upwards...
My responses to Stuart's other points I will let stand:
Stuart:...a rookie card of Mickey Mantle?
Stoller: How much time would it require to FIND one, and I don't mean in a catalog or a fair---someone ELSE has found it there. I mean: how much labor-time would it take for you to set out and uncover one (without a 'collector's price-tag' ALREADY hanging from it)?
With this exception:
Stuart: So a Ferrari at $150,000 has 150 times more labor in it than a Nissan?
Stoller: AND parts, don't forget parts (which represent PAST labor).
Let us acknowledge that there are fewer Ferraris produced than Nissans, owing to anticipated higher prices.
The machinery (constant capital) that makes Ferraris is most likely more labor-intensive (intricate, etc.) than the machinery that makes Nissans. BUT even if this machinery is the same expense, because less Ferraris will be produced, they MUST COST MORE simply to recoup the initial investment of the machinery. The machines that produce EITHER Ferraris OR Nissans most likely can crank out the same amount, but the Ferrari machines will stop BEFORE the Nissan ones will; they may even sit idle for a while...
Producing less of anything--as any artisan will tell you---ADDS to the overall cost; especially if the artisan is using high-tech machinery! After all, increased productivity is, amongst other things, making MORE of something in the TIME it used to make less.
Stuart's other points:
Stuart: Would you pay more for a brain surgeon who was acclaimed as a talented practitioner of his art vs. one perceived as merely average? I would. Lots more!
Stoller: And in order to DECIDE whether or not this brain surgeon was 'talented' or 'merely average,' you most likely would look to WHAT UNIVERSITY and WHAT HOSPITAL he / she was trained at / affiliated with. And THOSE determinations require labor-power within the university, within the hospital...
Or you could simply contract both surgeons to operate on your brain and THEN compare their work... (Subjective Theory of Value in practice!)
Stuart: Isn't this labor theory just another way of marginalizing talent and placing artificial constraints on progress of those who might benefit from the naturally occurring differences that occur in our species?
Stoller: Isn't your 'subjective theory of value' (i.e. people pay according to their desires) a FAR MORE artificial method of judging value?
I mean, what if you were retarded and paid $100 for a candy-bar. Would that REALLY make that candy-bar 'worth' $100?
Stuart: [H]igh fashion?
Stoller:...Consider the LABOR going into advertising.
Stuart: I wonder if Levi Strauss advertises more than Armani. I think so.
Stoller: Not so fast. Does Levi put on a lot of fancy fashion shows around the world at the most expensive venues?
Stuart: Are Beanie Babies really that much more labor intensive to manufacture than G.I. Joes?
Stoller: Again, rarity and the cost of FINDING rare articles.
And I might add: the costs of constant capital---as in the Ferrari / Nissan example.
Well, Stuart, I KNOW none of this will satisfy your craven capitalist mind---but I certainly feel better.
1. Marx, Theories of Surplus-Value volume 2, Progress 1968, p. 293.
2. Lenin, 'The Agrarian Question and the "Critics of Marx",' Collected Works volume 5, Foreign Languages Publishing House 1961, p. 125.
3. Marx, Capital volume 3, International 1967, p. 808.
4. Lenin, op. cit., p. 121.
5. Ibid., p. 125.