- Socially Necessary Labor Time (SNLT): The total amount of human labor (abstracted from the specific tasks) embedded in a product, that is necessary to create a commodity (including capital creation, raw material/intermediate goods supply, and administration) in a particular social/technological context. Marx uses an average of all producers, but the average is not the correct statistic (otherwise some producers would operate at a loss). Instead, the marginal time is used: the labor time of the last, least efficiently produced instance of the commodity (amortizing capital and administration over all instances produced), which should equal the marginal demand for that last, least satisfying instance actually consumed.
- Exchange Value: The total amount of Socially Necessary Abstract Labor Time (SNLT) embodied in a commodity. The exchange value includes all the SNLT, including the SNLT necessary to create the capital and create the raw materials.
- Labor Power: The ability to work for a full period (e.g. a day).
- Cost of Labor Power: The SNLT required to create another period (day) of Labor Power, i.e. the SNLT required to supply a worker with the necessary food, shelter, clothing, medical care, leisure, etc. to work another period (day) and to reproduce the labor force. Because workers are human, the Cost of Labor Power may be more than bare subsistence.
- Labor Time: The actual amount of time a worker works in a period when he expends his or her labor power. The Labor Time worked will be less than the SNTL used to purchase his or her Labor Power.
- Profit: The difference between the Labor Time and the Cost of Labor Power employed by a firm
Sunday, March 29, 2015
According to Marx's theory then: