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Labor Theory of Value
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Definition of Labor Theory of Value: "Both Ricardo and Marx say that the value of every commodity is (in perfect equilibrium and perfect competition) proportionaly to the quantity of labor contained in the commodity, provided this labor is in accordance with the existing standard of efficiency of production (the 'socially necessary quantity of labor'). Both measure this quantity in hours of work and use the same method in order to reduce different qualities of work to a single standard." And neither accounts well for monopoly or imperfect competition. (Schumpeter, p 23) (Econterms)

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Books on Labor Theory of Value:

  • Schumpeter, Joseph R. 1950. Capitalism, Socialism, and Democracy, third edition. (First edition 1942.) Harper & Row. New York.
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