R
Ridgerunner
Guest
The “Labor Theory of Value” is a crock that has long been discredited except among the hard core leftists and people who just don’t know.So, you’re not a distributist, you’re a socialist under a new name.
It’s interesting to think about the fact that the relationship between labor’s share of national income and capital’s share is almost always the same. Labor’s share is about double that of capital, and has been since 1929 when the government first started keeping track.
It does change a little, but not much. Labor’s share is highest during periods of high employment, lowest when unemployment is high. Otherwise, both move up and down together in monetary terms. But again, the relationship itself changes very little.
There are good reasons why all of that is so. In a modern economy, it takes a lot to so completely change the (name removed by moderator)ut in terms of machinery, energy, working capital, intellectual property, either up or down. We think the changes are bigger than they are, only because we see some labor saving technological breakthrough here or there. But on the whole, changes are pretty small and, in any event, technological breakthrough generally requires a higher labor skill level and therefore higher wages in that sector.
Disturbingly, though, government transfer payments come entirely from labor’s share of national income. There are reasons for that too. So the more transfer payments the government mandates, the smaller is working labor’s share of national income.
But the notion that “labor” determines “value” is discredited.