Examine the labor theory of value with special reference to working day.

The labor theory of value states that the value of a commodity is determined by the
amount of labor that went into producing it. The Labor Theory of Value is not Marxs
invention, originating instead with classical economist David Ricardo, who developed a
labor theory of price, which states that the prices of commodities represent the labor
that went into making them. However, Marxs labor theory of value differs from
Ricardos and is given a drastically different significance within the larger context of his
work. Marxs focus on the nature of value is intended to show that the modern capitalist
system of production and exchange is not what it seems. Modern economists do not
accept the Labor Theory of Value as an explanation of prices, but that is not really the
sense in which Marx intended the theory to be used. Marxs point is that the production
of commodities is a social process, dependent on exploitation and giving rise to
antagonistic relationships among classes, an idea that is not addressed at all in modern
economics.
Marx used the term mode of production to refer to the specific organization of economic
production in a given society. A mode of production includes the means of production
used by a given society, such as factories and other facilities, machines, and raw
materials. It also includes labor and the organization of the labor force. The term
relation of production refers to the relationship between those who own the means of
production (the capitalists or bourgeoisie) and those who do not (the workers or the
proletariat). According to Marx, history evolves through the interaction between the
mode of production and the relations of production.
Capitalism is a mode of production based on private ownership of the means of
production. Capitalists produce commodities for the exchange market and to stay
competitive must extract as much labor from the workers as possible at the lowest
possible cost. The economic interest of the capitalist is to pay the worker as little as
possible, in fact just enough to keep him alive and productive. The workers, in turn,
come to understand that their economic interest lies in preventing the capitalist from
exploiting them in this way.
The labor theory of value applies to commodities produced and sold in capitalist
societies. Commodities are objects that satisfy human needs and wants. Commodities
are the fundamental units of capitalism, a form of economy based on the intense
accumulation of such objects. Marx says that useful things can be looked at from the
point of view of quality and quantity. They have many attributes and can therefore be
used in many ways. He uses the term use-value in relation to commodities' quality. "The
usefulness of a thing makes it a use-value." A commodity's use-value is a trait of the
thing itself, and is independent of the amount of labor needed to make the commodity
useful.
Exchange-value is the proportion by which use-values of one kind exchange for use-
values of other kinds. It is a constantly changing relation, and is not inherent to the
object. For example, corn and iron have an exchange relation, which means that a
certain amount of corn equals a certain amount of iron. Each must therefore equal a
third common element, and can be reduced to this thing. The common element cannot
be a natural property of the commodity, but rather must be abstracted away from its
use-value. Discarding use-values, only one property remainsthe commodities are the
products of abstract human labor. They are "congealed quantities of homogenous
human labor." This common factor in the exchange-value of the commodity is its value.
Thus, a use-value only has exchange-value when it consists of abstract human labor.
This is measured by the amount of labor-time socially necessary to produce it. A
commodity's value would stay constant if the labor-time also stayed constant. With
greater productivity, it takes less labor to produce a commodity, and thus, less labor is
"crystallized" in the product, leading to a decrease in value. "The value of a commodity,
therefore, varies directly as the quantity, and inversely as the productivity, of the labor
which finds its realization within the commodity." Something can be a use-value
without being a value. This occurs when something's usefulness is not produced
through labor. However, nothing can be a value without also being a use-value; if
something is useless, so is the labor contained in it.
In Marx's view, just as a commodity is a complex of two things - use-value and
exchange-value, so labor has a two-fold nature under capitalism. A social division of
labour is a necessary condition for commodity production. As Marx puts it: 'Use- values
cannot confront each other as commodities unless the useful labour contained in them
is qualitatively different in each case. Use-values are produced by specific, concrete
forms of labour: tinkers, tailors i.e., heterogeneous labour or concrete labour. Value is
the objective expression of homogeneous labour. Value represents human labour pure
and simple, the expenditure of human labour in general. The labour referred to here is
'abstract labour.
The form of value are not static or fixed once and for all, it developed logically and
historically in trading processes from very simple, primitive expressions to very
complicated ones. Marx distinguishes 4 stages in the development of value form a) the
simple or accidental form, b) the total or expanded form, c) the general form, and d) the
money form. These forms are different ways of symbolizing and representing what
goods are worth, to facilitate trade and cost/benefit calculations. The simple value-form
does not involve a money-referent at all, and the expanded and general forms are
intermediary expressions between a non-monetary and a monetary expression of
economic value. This monetary expression involves money circulation and before this
commodity circulation was used.
According to Marx circulation of commodities is the starting point of capital formation.
In the simplest form of circulation of commodities, a commodity is transformed into
money, which is then transformed back into a commodity as someone sells a commodity
for money and then uses that money to buy a commodity they need. In this very basic
market arrangement, people produce commodities so that they can obtain money to
buy the commodities that they need. This is known as C-M-C approach or circulation.
This dynamic naturally emerges in societies with a simple division of labor, in which
different people specialize in the production of different commodities. Capitalism
operates in accordance with different principles. Capitalists do not see money as a
means of exchanging the commodities they produce for the commodities they need but
as something to be sought after for its own sake. The capitalist starts with money,
transforms it into commodities, then transforms those commodities into more money.
Capital is money used to obtain more money. This is known as M-C-M approach or
circulation.
Marx compares C-M-C and M-C-M. They are similar in that both have M-C and C-M
phases, involving commodities and money, and buyers and sellers. However, in the case
of C-M-C, the final product is a use-value, and thus gets spent once and for all. There is
no "reflux" of money because it is lost in exchange for the product bought. In M-C-M the
seller gets his money back again; the money is not spent, but rather advanced. This
reflux of money occurs regardless of whether a profit is made, by the nature of the
process. Use-value is the purpose of C-M-C, while exchange-value is the purpose of M-C-
M. Money is indistinguishable, and it seems absurd to exchange it for itself. It is
distinguishable only in amount. Thus, in M-C-M what really occurs is M-C-M', where M' =
M + excess. This excess is called surplus-value. The original value adds to itself and
converts the surplus value to capital.
But problem arises that how money is transformed into capital? How someone can buy
commodities at their value, sell them at their value, and also make a profit. The change
in value cannot occur in the money itself, or in the resale of the commodity. Rather, the
change must occur in the first act of circulation (Money to Commodity, or M-C). The
commodity's use-value must be a source of value whose consumption is a creation of
value. This occurs in the case of labor-power.
However, there are necessary social conditions in order for labor-power to be a
commodity. First, the individual must be selling his labor-power as a commodity. This
means he must own his own person, and he and the owner of money must meet in the
marketplace as legal equals. In order to treat his labor as his property, he must be
willing to put it at the buyer's disposal. This means that the laborer alienates himself
from his labor, in order to claim his rights to it. Second, a person must not be able to sell
the commodities that his labor has created. Rather, he must be forced to sell his own
labor-power. This will only happen when the laborer does not own the means of
production.
For M to become M (M+), all the above conditions must be present; and so while value
is created in the sphere of production by labour-power, it is the labour-power bought in
the market, i.e., in the sphere of circulation, that is the source of s-v; and it is in the
market where surplus-value is realized. Capital 'arises only when the owner of the
means of production and subsistence finds the free worker available, on the market, as
the seller of his own labour-power. And this one historical pre-condition comprises a
world's history. Capital, therefore, announces from the outset a new epoch in the
process of social production'.
Labor-power's value comes from the amount of labor-time needed to produce and
reproduce itself. "The value of labor-power is the value of the means of subsistence
necessary for the maintenance of its owner." There are therefore historical and moral
elements to this definition, because we have to define what subsistence means. The
means of subsistence must be paid for by the worker's income. If the price of labor-
power falls below the cost of subsistence, then it falls below its value, since the labor-
power cannot be maintained at a normal rate.
With discussion of labour power we are able to know that surplus value is created in the
purchase and use of labour power but to know how surplus is extracted from labour we
will have to study the sphere of production which includes labour process ,valorisation
process etc. Acc. to Marx the use of labour-power is labour itself. Labour- power is the
potential or capacity to work, a commodity bought and sold; and labour is the actual act,
the doing of the work. To simplify, we first look at the labor process itself. Labor is a
process between man and nature, as man takes on the materials of nature and adapts
them to his own needs.
Marx says that the elements of the labor process are the work itself, the object onto
which work is performed, and the instruments of that work. Many objects of labor are
spontaneously provided by nature, such as caught fish. The object of labor is "raw
material" only if it has already been altered in some way by labor. An instrument of
labor is something that directs the worker's activity onto an object, such as a tool. More
broadly, we may also include the conditions necessary for carrying out the labor
process, such as workshops and roads. The labor process then alters the product,
producing a use-value. Labor becomes "bound up" with its object; "labor has been
objectified, the object has been worked on." Other use- values, the products of previous
labor, also enter into the current labor process as a means of production. Whether a
use-value should be seen as raw material, as an instrument of labor, or as a product, is
determined simply by its function in the labor process. Labor consumes products in
order to make products. In its abstract form, then, the labor process is purposeful
activity aimed at making use-values, and is common to all human society.
The other process which is valorisation or creation of value means more value comes to
appear in the output then was thrown into production. Capitalists do not produce use-
values for their own sake. Rather, they are produced only insofar as they have an
exchange-value. Furthermore, the capitalist wants a commodity greater in value than
the sum of the values of the commodities he used to produce ithe wants surplus
value. Thus, let us now look at the production of commodities as a process of creating
values.

The value of a commodity is determined by the amount of labor "materialized in its use-
value." Thus, we must see how much labor-time is objectified in it. We can treat the
labor required to make raw materials and the labor required to make the final product
as part of the same process. Part of the value of the commodity thus comes from the
value of the means of production. It is important to note that in this context, all kinds of
labor have the same character. We are no longer concerned with the quality or
character of the labor, but rather only with its quantity. The total value of the product is
equal to the total amount of labor put into it. This result would seem to suggest that
there is no surplus value, because the value of the end-product is equal to the values of
the inputs.
There is, however, surplus value. This comes from the fact that the cost of maintaining
labor-power is different than labor-power's expenditure in work. The first determines
labor's exchange-value, the second determines its use-value. The fact that half a day's
labor is necessary to keep a worker alive does not mean that he can't work more than
this. The capitalist takes advantage of this distinction. The capitalist pays the value of a
day's labor, and therefore has it for the day. However, let's say sustenance for the
laborer only costs a half-day's labor. Here, the value of a day's labor- power is half a
day's labor, and the capitalist can pay the worker at that value. The other half-day's
labor goes beyond the value of labor-power, and is therefore surplus-value. Thus, the
value the work created is double what the capitalist pays for it. Marx says, "this
circumstance is a piece of good luck for the buyer, but by no means an injustice towards
the seller. This brings us to the concept of working day.
We have assumed that labor-power is bought and sold at its value, as determined by the
labor-time necessary to produce it. However, the amount of labor needed to provide
subsistence does not always equal the length of the work-day. The time in excess of the
necessary labor time is surplus labor. Thus, the working day is a variable quantity,
which changes according to the amount of surplus labor. However, it can only vary
within limits. There is no real minimum limit; there must be some surplus labor because
of the nature of the capitalist system, and it can approach but not reach zero. The
maximum is constrained by physical limitations and moral constraints, such as the need
to fulfill other obligations.
The capitalist has a very particular view on this matter. "As a capitalist, he is only capital
personified. His soul is the soul of capital." Capital's drive is to create surplus-value, and
make the means of production absorb as much surplus labor as possible. If a worker
uses his disposable time for himself, he is effectively robbing the capitalist, because the
capitalist lives on surplus labor. Thus, the capitalist tries to get the maximum possible
benefit from the worker's use-value.
However, the worker has his own view about how much he should work. His labor-
power is different from other commodities, because it creates value. From the worker's
perspective, the capitalist's demands reflect an excess expenditure of labor-power. For
example, a capitalist could potentially use so much labor- power in a day that it would
take three days to restore it. "Using my labor and despoiling it are quite different
things." The worker argues that the capitalist can't use three days worth of his labor
power and only pay him for one. He demands the value of his commodity.
Based on the principles of commodity exchange, both sides have equally valid rights in
this case. Here, force will be the solution, and the history of capitalist production reflects
such tension between the capitalists and the workers.
Marxs account of the exploitative relationship of capitalist to labor remains powerfully
compelling and seems by many to be vindicated in history. For example, in industrial
England prior to legislation limiting the length of the working day, workers had no
power and were forced to work long days in horrible conditions for wages that barely
kept them fed. This struggle over the length of the working day is illustrative of the
struggles in capitalist society generally. Essentially, Marx argues that the mechanism of
exploitation built into the capitalist economic system is the source of social antagonisms
that will eventually lead to the dismantling of capitalism itself,
In capitalism only, the system of private ownership of the means of production, deprives
human beings of this essential source of self-worth and identity. The worker approaches
work only as a means of survival and derives none of the other personal satisfactions of
work because the products of his labor do not belong to him. These products are instead
expropriated by capitalists and sold for profit.
In capitalism, the worker, who is alienated or estranged from the products he creates, is
also estranged from the process of production, which he regards only as a means of
survival. Estranged from the production process, the worker is therefore also estranged
from his or her own humanity, since the transformation of nature into useful objects is
one of the fundamental facets of the human condition. The worker is thus alienated
from his or her species beingfrom what it is to be human. Finally, the capitalist
mode of production alienates human beings from other human beings. Deprived of the
satisfaction that comes with owning the product of ones labor, the worker regards the
capitalist as external and hostile. The alienation of the worker from his work and of the
worker from capitalists forms the basis of the antagonistic social relationship that will
eventually lead to the overthrow of capitalism.