: Actually, it is quite ironic that you would support this considering that Adam Smith, a bastion of free-market thought, was the one who originated this theory.
Not really, its an analysis of how capitalism works, not how we would like it to work.
: In any case, this theory is wrong and the various free-market economists such as Bastiat and the Austrian economists like Hayek, Von Mises and Menger, have realized this. The socialists, as in everything else, haven't realized their error.
I covered marginal preference theory, and made points against it- and even if true, its a damning indictment of cpiatlism in and of itself.
:Just a simple example which renders false the labor theory of value would be the "diaomond case". Suppose a person finds a diamond on the beach. This person would be payed quite handsomely, yet very little work was done. Really, value is nothing more than a figure respresenting the amount of work saved by the person purchasing the service or good
No, the diamond is a peice of luck for that fionder, but in the social mean diamonds take a lot of evffot to come by, and are exceptionally rare, thus they would recieve its average value on the market. Another example is a stolen video- the theif doesn't demand the value of their labour time, but probably demands a price well below the usual value- which most purchasers understand when they find a 'bargain'- you *know* its usually worth £110, but this bloke is selling it for £15.
You are arguing a crude characature of the theory.