The audio really needs to be boosted

wtf im a communist now

104 people who watched this are vulgar economist bourgeois apologists

Is there a part 2 somewhere? I'd like to hear the last two bullet points --i.e., the "causal mechanism" and "answering new objections." Thanks

There was a part two of this that went into testing the theory on a bell curve, though it seems to have been taken down. Would it be possible to re-upload the part 2 for this lecture?

Could you leave a link in the description of the IO chart you used in the slide show.

Wtf i love now popper's notion of falsifiablity

Hello Paul Cockshott I was fascinated by the video, I was reading the article "The Empirics of the Labour Theory of Value: Reply to Nitzan and Bichler" I was thinking, is it possible to obtain the same correlation using the procedure attached as an appendix to the article? I'm new trying to understand these things and I'm not a native English speaker so I'm learning, I hope you can review the spreadsheet that I attached, I got similar results, but not the same as the ones you uploaded to the drive and I'd like to see if I'm wrong about something. Thank you in advance!

Paul, thanks for the content. Based on my style of learning, I would be able to mentally digest this information by making some practical coding exercises. Is there any bibliography you would recommend me to do the exercise of calculating the labour value of an exemplary commodity? Which inputs should I use to compute the labour-content, and which steps should I follow to compute that calculation?

I just have one question. How did you determine labor hours (both indirect and direct aggregated) from the table you showed before the graph? I thought all the data was in terms of pounds in the table. Are you assuming an hourly rate per industry? If so how do you determine that? Or am I missing something entirely?

Another question: Using the same data, how strong is the correlation between input price (including wages) and output price? One would expect it to be weaker than the correlation between labor value and output price, correct?

Which year in the UK's economy does the IO table you use represent? Every table I download from the UK gov't website seems to have no labour row.

Also, what's with all these "smart" amateur economists coming in as of now? Did the PragerU give an order to attack?

I’m very happy to have found this. You have explained in a clear way the correlation between prices and labour input. Ive been worrying about this for years and though I am a Marxist, I honestly didn’t realize that empirical data confirmed the labour theory of value in this way. Great work!

I just wanted to clarify the point on knowns and unknowns regarding constants in the supply and demand curves. By unknowns, do you mean the types of services, goods, etc. that are unable to be analyzed due to the vast variety of all services/goods as a whole? Thanks!

The table shown at 14:57 can not be found in the article you have as reference of the right side of it, could you please tell me where it is actually from? It can not be found here: www.reality.gn.apc.org/econ/Zachariah_LabourValue.pdf

This channel is too good. All leftist channels on KZfaq must give this channel a shout out

What are your thoughts on Karl Popper's critique of historical materialism?

Hi sorry to bother you but I'm unclear about something in your explanation of the IO tables. Is the labour value allocated at the bottom of the table an indicator of the value of wages paid to labourers?

Where can I find the link to the program you used?

4:24 what was the publication that you were referring to. I would like to read it :)

Hi Paul, Where did the Labor total come from at the bottom of the spreadsheet. I'm look at the IO tables for the US, but I find no such line and I went to the google drive and only found what appeared to be a program. Please advise, thanks!

Perhaps I'm a simpleton, but I cannot seem to find values for "labour inputs" in these sets of data for the Australian economy (my home) - could you perhaps tell me which/if such data is here at all? Looking to perform a similar analysis and see the correlation. www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5209.0.55.0012017-18?OpenDocument

Love your videos Paul. I'm attending a Marx reading group and your summaries and "hot takes" help to arm me well for them, thanks!

I am interested in the implications of this data and what it proves about society. I am thinking about maybe doing a school project on this.

I have downloaded your Files and i have found something weird there. In the dowloaded Files the "LABOUR" cell ist replaced with "Compensation of Employees", though they have the same values As I understand it LABOUR means the amount of work (for example 20 person years) and Compensation of Employees means the money they get (for example 1000€) Could you please elaborate on this Incosistency in your Video and Files and how you can convert the Compensation of Employees to LABOUR?

What about the input of the owners' strong and fine personal qualities?

Paul, I love how you mathematically proved the labor theory of value to be scientifically correct. Could you please apply the same reasoning and methodology to further prove how neoclassical theory inconsistant.

it's nice to see that someone have done a really good job making Russian subtitles for this video. The translation is accurate to the point.

Hi Paul ~ wondering if you've done a response directly to Shimshon Bichler and Jonathan Nitzan's critique anywhere?

Hi! I liked your video and want to access to the google drive link with the results and program used but it seems to be broken

Glad that this is back up.(i thought the audio was fine in the original). Also, I would like to ask you about the workpoints in Maoist communes. Have you heard of them?

I've only been learning about economics this past year. It can get really complicated from a novice persepctive (I think many established Marxists - or economists in general - forget this). In the end for me, I understood The Labour Theory of Value - at least the controversy about it compared with The Subjective Theory of Value - by using a simple analogy of a market place of computers cracking encryption codes (made of primes). The argument then is "are primes independant of time?" - classic.

What do you think of criticisms from Sraffian economics (from people like Robert Hahnel, who as far as I understand is held in high regard) about labour theory of value, and their cause of 'perfecting' socialist or even marxist theory while getting rid of labour theory of value?

Also, how were you able to determine Indirect Labour from the other industries?

I’m having a discussion with someone and their points are making me question the LTV. They said an apple that falls from a wild tree into someone’s hand has the exact same value to them as an apple that was grown on an orchard where the land of cultivated and what not. I guess their point was that the wild apple that took no labor has the same value as the apple on the orchard that took labor. How do I respond?

Dr. Cockshot, two questions: 1) Can you give an example of how this proves exploitation? 2) What do you mean by saying "unknowns" in regard to supply and demand variables? It's a compelling disproof, but I would assume orthodox economists would have *some* numbers of literal supply of products for different industries and their respective amounts of said items purchased they can put on a graph like this- are you saying they're inconsistent when graphed? Thanks for any clarifications you can give.

On the UK’s IO Table, were labor inputs calculated in money terms or in terms of labor time?

This video is old so i probably won't get an asnwer, but let's try. In you graphs and tables "labour" means how much money is being paid for tonne of product being made?

Program labourValuation: drive.google.com/drive/folders/1CBkWwqdO1OT0y2kcZ04JI45oulgt-Pn6?usp=sharing (URL cannot that easily be copied correctly from the video, so here it is clickable.)

That's a great video ! I like it when serious people debunk the bourgeois economy I'm taught better than I could ever expect to do myself . Just a question : How is the value of land determined as seemingly it's not produced and therefore no labour is used in its conception ? Does it even has a value ?

Professor Cockshott, with this statistical analysis you provided evidence for a correlation between the price of products and the amount of labour time devoted to their production. What you wanted to proof by this was the labour theory of value, though. If I'm not mistaken, value and price aren't identical. Has this difference (if there is any) been accounted for? And even if price = value, in order to testify that the causation goes from labour time -> price, wouldn't a prediction be required instead of a description? (E.g.: Predicting the new price of a product, given a known average labour time in the present, a known (lower/higer) average labour time in the past and a known price of the same product in the past?)

I tried looking for a U.K. IO table and none have the labour contents in them. Could you please link where you found it?

Your lectures are on point Jason Unruhe was right for checking out your works.

This video will be used by my comrades as a weapon to strike down the naysayers.

Where one might find an input-output table in such a form (with labor). In modern tables from site www.wiod.org/database/wiots16 there are no data about labor which makes these tables useless for the research on the labor theory of value. Can one help me to find the source for the data?

Why do you use Occam's razor to dismiss supply and demand curves based on 2 data points (P, Q) while at the same time using 2 data points (P, V) to confirm correlation between prices and labour value?

Do you have a Patreon account? Because I'd like to donate. Your content is extremely good!!

Thanks for the amazing videos Paul. Cheers from a chilean communist!

If the discussion continues, I promise to send only short answers to only one discussion point! Best regards Rainer Lippert

How does the LTV incorporate fiat currency? I assumed that money must be backed by some commodity(gold/silver) for the LTV to be applicable

Can anyone say how to compute person-hours from an IO table such as the one here? ( www.ons.gov.uk/economy/nationalaccounts/supplyandusetables/datasets/ukinputoutputanalyticaltablesindustrybyindustry ) I just started playing with it, and afaik I’ll have to consult another data source to get total person-hours by industry. This is because the only thing I can find is total worker compensation: to convert this to person-hours I need the total industry person-hours worked, or the average wage, which again I cannot find in the UK’s latest IO table. I would love to be missing something already included in the released files. Any tips for where I should look?

This channel needs to be translated in more languages, it is golddust

What's the difference between Marx's LTV and Ricardo's?

How is this accounting for the differences in wages in each industry?

I believe it

Labour theoryLabour theory is only real theory which have solved many of mysteries of capitalist production. Bourgeois Economist are opposing it not because they find it entirely wrong, but mostly because entire base of Marxism is on this theory and proving it false means whole marxism is wrong. But doing this is not going to change facts! It holds good in many of questions. For example take water-diamond question. If it was sole consumer demand which was going to determine value, then water would be most expensive thing in this world for it has largest demand not by only humans but all living beings. Then why Is this not case? Because water falls from sky, diamond doesn't. It requires labour to take it out. Also why there's then price difference between gold silver diamonds etc when they r having only one purpose of luxury articles? Solely due to different times are required yo extract them. With technological advancement in silver mining, prices of silver are continuously fallen in proportion to gold. Why this is so? Because lesser labour times are required now to extract same quantity of silver than it used to be before. Now about supply and demand. During competition periods supply and demand is what plays most influential role in determining prices. But it merely and temporarily affects "prices" And not value of commodity. Under normal conditions prices always revolve around more or less close to their actual value. Either there's free comptetion or planning. When bourgeoisie economists are talking about prices and value is being determined by consumer behavior, they r self evidently speaking language of economist of communist society. Production by consumer demand is what principle of communist economy. So their point holds good, but not for capitalist economy, but for communist one. If it was really case in capitalist production, then all productions would be carried out by consumer demand itself. Then there's no space remains for inherent competitive nature of capitalism. All crisis taking place in such "capitalistic" Society would be result of unsolvable mystery to man. Thanks for this video. It helped a lot to clear misconceptions

Another argument levelled against LTV is that some commodities take a longer time to produce than others (I got this one from a note from Katsenelinboigen). E.g. isn't hardwood more valuable than softwood just because hardwood trees take more time to grow? The exchange value of a given volume of hardwood is going to exceed the exchange value of a given volume of softwood, despite an insignificant difference in labour invested in its harvest? (I was thinking about other examples... maybe with fine wine or a rare spice like vanilla or saffron..) Care for another rebuke, prof. Cockshot?

Thank you for reuploading this but would you unprivatize the original for documenting purposes?

This fucking blew my mind wow

You are by far one of the smartest individuals right now in critique of political economy. I'm glad to have found your lectures.

I have heard that China prohibited the theory of value. Is that true?

Is the sum of profits gained by all producers (both positive and negative) in a confined economic system always zero?

Indeed, the unfalsifiability of capitalism is in its exploitation of arbitrary, relative exchange values, coupled with an arbitrary, subjective, point of reference to define the relative exchange values.

Thankyou for your video. I've seen your 1997 paper on the Scientific Status of LVT, and I understand your academic background. So I'm sure you understand what follows, but for the sake of others seeing this video, I would like to make the point that supply and demand curves are not a scientific theory. They are a models used in an attempt to estimate or forecast the price or demand of a commodity based on assumptions made about changes made by the business or changes occurring in the market place. They are simplified representations. In a different field, engineers frequently use simplified mathematical models to approximate behaviour of systems for which the science is too complex to define and find solutions to complex real world physics in order build bridges that stay up, planes that fly etc. If they use the wrong models, or use poor data then of course there can be terrible consequences. However, mostly - fortunately - they get it right. How reliable these models are (whether used by an economist or an engineer) depends entirely on the quality of information used to create these models, and the reliability of the predictions are certainly demonstrated by the correlation of the model's estimation to actual observable business results.Even where there is good correlation however, that does not make it science necessarily, but it does make it a good/useful model. It is very common, even within large volume commodity manufacturers, to apply alternative models to predict demand or calculate a reasonable selling price. Some of these methods include applying mathematical forecasting based on historical performance, modifying estimations with known or expected changes to the market, or by tracking the performance of an indicator commodity to which they have established a correlation. In many cases supply and demand models are not used at all. Critiquing Supply & Demand curves as a theory that is untestable and therefore non-scientific, misrepresents what they are, and does not actually help to dismiss any argument of price as a function of the relationship between supply and demand for a commodity. Real business are making decisions on far more than a supply/demand curve - which let's face it in today's data driven world is like taking a pack of crayons to a digital animation studio. In a sense I am also confused by the relevance to a LVT discussion of supply/demand curves and price, when many followers of this theory go to pains to emphasise that 'exchange value' (presumably price) is different to labour value. As noted elsewhere, and again for the benefit of others, just because correlation is evident in data, that doesn't mean that A causes B. In statistics, it's a logical fallacy to suggest that correlation proves causation, and this is a mistake that undermines the credibility of someones assertions. There are many variables must be examined when looking the relationship between two events. It is common to find other factors that have an impact, and it might be these factors that are responsible for the correlation. Just because a connection or a mutual relationship between two variables is evident, it doesn't necessarily mean that one causes the other. That can not be established by looking at the correlation alone. More research would be necessary before that conclusion can be made. There are many ways in which causation can be wrongly inferred from correlation: reverse causation, missing a common causal variable, bi-directional causation, it may simply be a coincidental relationship. To illustrate; eating more mozzarella cheese shouldn’t make engineering schools hand out more diplomas. Yet between 2000 and 2009, the more mozzarella that Americans downed, the more doctorates in civil engineering that U.S. universities awarded. Over a 10-year period, as levels of one went up, so did the other. The two showed a strong positive correlation. Yet almost certainly this happened by coincidence. One did not cause the other. (from A. Evens et al. “The impact of low-level lead toxicity on school performance among children in the Chicago Public Schools: a population-based retrospective cohort study.” Environmental Health. Vol. 14, April 7, 2015, p. 21. doi: 10.1186/s12940-015-0008-9.) Finding a correlation between input labour and total market outputs does not actually support LVT - classical interpretations or not. It simply says that there is some relationship between labour and output. If you track - for any commodity - labour and market output as a time series rather than for a single period - you will see that commonly there are step changes to market output (in $$ or volume) - even though labour input remains the same. This can happen for instance when there are step changes to production technology, or disruptions caused to the supply chain, or to the community of buyers. Labour is of course a necessary component in almost all produced commodities, and presuming the methods of production do not radically change then one can expect that there will be a linear relationship between hours/days/years of labour and production volume. That point is trivial - it is simply an example of scaling and that is more or less what your chart shows. This is not a revelation. It also does not mean that the entire absolute value of the commodity produced is determined solely (or even largely) by the value of labour put into the production of the commodity. That chart, and the data behind it is can't really be regarded as proof that LVT is a scientific principle or an infallible theory. LVT is simply a model. No more. No less. It may be a good tool to predict value for some high volume high labour content commodities. It does not work seem to work as well as other models for other industries or occupations - as illustrated by the many exceptions that are made in order to explain where LVT does not work; eg art, antiques, real-estate auctions, and pretty much any niche industry. In my view that does not make LVT meaningless, but that also does not make it the comprehensive model for value that some would like to portray it as. Kind regards

Super Educational Video, but could you publish were you found the IO Table for great britain?

Now this vid should be seen by many more people. Thanks

Very refreshing professionalism from Cockshott. Especially seeing as how so many of the LTV's detractors get pretty emotional and angry at the thought Marx might have been right.

It isn't, even Marx knew that -- labour is the father of all wealth but the earth is the mother

Hey Paul, I'm wondering how this might work for the industries whose profits depend on ownership over patented information. Would these appear on your graph the same way that oil production does (i.e. super-profits derived from the created of artificial monopoly positions)?

Ricardian theory of rent or en.wikipedia.org/wiki/Differential_and_absolute_ground_rent ?

Brilliant video in showing that your understanding of basic economics is so poor you should never work with economics. You seek to draw conclusions which doesnt even fit the data you yourself have selected.

How do you calculate how much labor was indirectly used based on only the labour of one industry and how much money was used by each other industry?

How does LTV take into account automation? Do prices adjust accordingly when output requires less labor?

Paul, what would you say to someone who argues that the correlation between labor values and price is just that-- correlation and not causation? It's been argued that, since labor is one of the most expensive inputs in production, it's only natural that there would be such a correlation.

Just a question What do you mean by indirect labour at 11:20?

What is the definition of "labour" and how do you measure it as a quantity?

I would like to correct you on a very rookie mistake: A problem that has more unknowns than data points is not unscientific, it's called "underdetermined", which means it may have more than one solution, or may need additional assumptions. This is actually a fairly common occurrence in data science and analytics and while it may lead to overfitting, it is still absolutely permissible. There are many well known problems that are highly scientific, yet present such challenges. Here are a few examples: Inverse Kinematics algorithms (robotics, mathematics, computer animation), quantum state reconstruction (quantum mechanics), image reconstruction (machine learning), principal component analysis (machine learning), minimizing the euclidean norm of a vector (geometry), neural networks in general (deep learning) ... the list goes on.

Can you explain how to aply LTV to non productive services?

11:00 is pretty surprising evidence. I can't find Part 2 which describes why this happens. I'm guessing it's because LToV was always described *in a perfectly-competitive market for products that are in-demand.* It does not mean that anything you spend time on becomes more valuable. Adam Smith agreed with this, so did other Capitalist economists like Ricardo. Still, I thought the theory was over-simplistic because no market is perfectly-competitive, yet there's a 90%+ correlation across countries? (14:05). I expected markets to be distorted by things like monopolies, patents, tariffs, in-elasticity, etc. Maybe those factors are minimized because this looks at industries as a whole within each country..?

Would love to hear the rest of this, especially the mechanism

didnt you write a book on economic planning

Question regarding empirical verification of LTV. Per your definition of a scientific theory, prior to the possibility of data being thought available (unavailability your proposition) LTV purely speculative then? Important to note verification different from reasoning process to arrive at speculation obvs - many instances of great ideas only being verified centuries later.

The test you decided only proves a correlation, and the correlation doesn’t determine that there is a causality or even if there is: what direction that causality goes in. It’s just as plausible a conclusion to draw that markets assign labor efficiently by filling demand which creates the illusion that prices are a function of labor input.

I hope he is fine

How do subjectivists explain scarcity

You should change the title to the original title, right now it looks like a test video.

Does the labor theory of value only apply to productive labor (labor that produces surplus value)?

Great. No really, this surprised me. But how can we explain the dynamics on stock markets if we assume that the labor theory of value is correct?

There is a miscalculation in this. You seem to be using double dip accounting. Some of the labour is taken from one industry and attributed to another. Yet you still include this labour in the original industry. So the formula should be all the inputs into the industry, minus all the outputs to other industries plus the total labour at the bottom of the graph. Otherwise you will have more man hours worked than have actually be done.

Isn't this just proving the cobb douglas production function

Why is he whispering?

What's the relation between "labour input" and "socially necessary labour"? It seem's to me that the first one is simply an accounting tool to measure worked hours. Not really related to what marx defined as objective value.

Thank you for a great video, Paul. I finally understand what the labor theory of value says. I have a comment. It is possible that the value added in an industry is proportional to both the amount of labor and capital it uses. For example, if labor and capital always contribute 50% each of the value added, then both will be 100% correlated with value added. Hence, it seems to me that the labor theory of value alone, even if correct, is not sufficient for arguing that labor is the only source of value, as Thompson and Gray did.

Labor time or Labor productivity? if i produce shoes 5 times more than other person but with the same tools and time, would i have not produced more value?

thank you for this!

Here are a few problems I have with this analysis: 1a. Assuming I'm understanding correctly that "indirect labor" is calculated as the proportion of industry B's money value input into industry A, to the total money value of B, times the labor input of B to yield hours of B as an input to A: How is this not assuming your conclusion? This calculation only makes sense if your hypothesis is true. 1b. How do you avoid double-counting here? For example, if A uses $123 of output from B, how do you know that all of that output came from the direct labor input to B, and not from indirect labor from C? 1c. Another double-counting problem, which may just come from my lack of understanding of the IOT methodology: How do you account for A's contribution to A? It's not clear whether the labor input to A includes or excludes the output of A used as an input of A. 1d. In fact the problem in 1c could apply to *any* of the values in the table, meaning the calculation in 1a wouldn't apply. If A's contribution to B includes $100k from the current survey period and $100k from the previous survey period, then the labor input recorded for the current survey period only applies to half the output. 2. If the *value added* should be proportionate to the labor used, why not use the value added entries recorded in the IO table? 3. Even if the total money value produced by an industry correlates with the amount of labor for that industry, why wouldn't we be able to conclude that the reason for that is that the more lucrative an industry is, the more it would be scaled up? This is especially the case if you're counting "indirect labor", which means you end up correlating cost with revenue, with cost simply expressed in hours instead of dollars/pounds. 4. Theories of price in general are pretty silly. Prices aren't outcomes of natural processes, they are decided by human beings, and we can just ask how they decided on them. Means & Berle found in several studies (with subsequent follow-ups by other authors) that there are generally two ways prices are set: one is that a company follows the market around, and the other is that a company takes an estimated unit cost for their product and adds a desired profit margin. You could say that costs are all ultimately labor inputs, but this excludes those profit margins, which are a function of the relative/perceived market power of the seller and buyers.

Amazing video and very well explained Keep up the amazing work!

Great vid

If prices are determined by the costs, why I can't just start selling whatever I want even if I made it in the most expensive inefficient way?