Yes, "dead labor" if I recall Marx's term, embodied in the capital good - the useful part is the recognition that capital is simply the saved surplus value from previous work, applied to magnify current work.

But trying to apply the labor-value this way just further illustrates the mistake in asserting you can attribute value to the hours of labor in a finished good.

If no shovel is available, the value of a hole is the labor required to dig it with bare hands.

But if shovels are available, the value of the hole is the value of the labor of digging the hole plus the fraction of the labor embodied in the shovel that was consumed in digging the hole.

But if you introduce power tools, the value of the hole is the fraction of the labor of the construction and maintenance of the power tool that was consumed, plus the labor of the operator.

There is no rational way to form an equivalence of these things, except if you consider them costs of the hole, rather than the value of the hole.

Those different "hours of labor" whether current or past have different values based on how they are applied (utility value) rather than just "labor hours".

And then as a bonus, the hole has the same utility value regardless of how it was dug.

Looks like we've reached the max comment depth.

I think we agree that labor is a source of value - discovering, creating, transforming inputs to add value - and capital is surplus value from previous labor.

I think we disagree that socially necessary hours of labor is a useful "objective measure" of the value of the product.

I think too many variables have to be hand-waved away by that "socially necessary" qualifier, such that it completely hides any value (ahem) of the measure.

We've identified that we have to qualify socially necessary labor hours by

- average skill and diligence of the workers currently available in the region

- efficiency of the production processes for this item and all capital goods and materials used in production

- level of technological advancement for all of the above

- availability of competing products

That's a very abstract measure casually described as hours of labor, and seems to have little descriptive power, much less predictive power to help decide what will be worth producing. Frankly, I'm not sure if it can be calculated at all for any commercial product.

"The value of a commodity can be objectively measured by the hours of socially necessary labor required to produce it."

Can anyone cite the hours of socially necessary labor required to produce any single product? (See "I, pencil" for an example of the complexity)

Agree on the first three of your four bullet points. You're kinda missing the point on that last one: if you can correctly identify the value of the labor (again, including capital goods) that go into making a product, then what you have is the minimum value that a product will sell for in the long term. And, importantly, in a free market the price of the good should tend to be around that value. I kind of alluded to it in my previous post but didn't quite spell it out completely I think. Effectively, it is the value at which you get zero profit from the sale.

All else being equal, competitors will not be able to go any lower either (until and unless they gain some technical advantage) without selling at a loss. Exactly as you point out: there are various factors that can reduce that value - Marx points this out as well of course and I think it's sort of meant to be among the main contributions capitalism makes to historical economic development. But, for any interval of time over which there are no major technical advancements in the industry in question, in theory at least (i.e. in a more-or-less "pure" market with rigorous competition) the price of the product on the market will approach the point at which profit is minimized i.e. the value of the labor required to produce the good.

Looked at another way: the real value of capital goods (in an economic sense, anyway) is not in the production they enable, but that they allow for more efficient use of future labor time. If, and only if, the savings a capital good provides in labor time to produce a product, is greater than the value in labor required to produce the capital good in the first place, is it "worthwhile" to produce the capital good and put it to use.

You might hire someone with a sophisticated ditch-digging machine to dig your ditches for you, but would you still do it if you knew that producing that one ditch-digging machine took 500 men working 10-hour days for a month? And it was only good for digging 10 miles of ditches before breaking? Probably not, and the labor theory of value does a good job explaining why, IMO.

All that said, of course that's not at all how our market functions especially nowadays, and there is a Marxist approach to analyzing that as well - but that's out of scope of this thread.

There is the notion of "socially-necessary labor" and the amount of that required to produce a thing does depend on the capital goods available to the people doing the work (that is, the technological sophistication and level of economic development). The expectation is that it will go down the higher the economic development. This can even make things that previously weren't worth doing before, worth doing now, because their value in labor is finally less than their use value.

In principle market forces are supposed to drive down prices, are they not? Absent collusion and corruption, etc., we would expect the price of a good to be very close to the cost to produce it. This is what pro-capitalist, pro-market economists keep telling us, anyway - and that is at least the theory. But that cost to produce it is exactly the capital used in the production plus the labor applied to that capital. But if capital is just the product of labor, then in fact the cost to produce the item - and thus the price I will expect to pay in a competitive market, does in fact correlate quite well with the labor that goes into production.