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Labor theory of value - definition of Labor theory of value in Encyclopedia (4177 words) |
 | The labor theory of value (LTV) is a theory in economics and political economy concerning a market-oriented society: the theory equates the "value" of an exchangeable good or service (i.e., a commodity) with the amount of labor required to produce it. |
| Workers work for a part of each day adding the value required to cover their wages, while the remainder of their labour is performed for the enrichment of the capitalist. |
| Values correspond to the abstract labor-time socially necessary to produce commodities (the contributions by workers to commodity-producing society), while prices are set by supply, demand, and market institutions. |
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