All value comes from labour — the scientific foundation of Marxist political economy
The labour theory of value is the cornerstone of Marxist political economy. It establishes a scientific fact: the value of any commodity is determined by the amount of socially necessary labour time required to produce it. Not the individual time spent by one particular worker, but the average time required under normal conditions of production, with the average degree of skill and intensity prevalent at the time.
This is not a moral claim — it is an objective, material analysis of how the capitalist economy actually functions. When you buy a table, its value reflects the total human labour embodied in it: the labour of the carpenter, the lumberjack, the toolmaker, the miner who extracted the iron for the saw. Every commodity is crystallised labour.
Socially necessary labour time is the labour time required to produce a commodity under the conditions of production normal for a given society, with the average degree of skill and intensity of labour. If a lazy worker takes ten hours to make what an average worker makes in five, the value of the commodity is still five hours — not ten.
"Capital is dead labour, that, vampire-like, only lives by sucking living labour."
— Karl Marx, Capital Volume I (1867)Every commodity has a dual character. Its use-value is its usefulness — a coat keeps you warm, bread feeds you, a hammer drives nails. Use-value is qualitative and concrete. But commodities also possess exchange-value — the proportion in which they exchange for other commodities. One coat may exchange for twenty yards of linen, or for two ounces of gold.
What makes such exchange possible? What is the common substance that allows qualitatively different things to be equated? It cannot be their physical properties — coats and linen have nothing materially in common. The only thing common to all commodities is that they are products of human labour. Exchange-value is the form taken by the abstract human labour embodied in the commodity.
Under capitalism, use-value is subordinated to exchange-value. Production is not for human need but for profit. Food is destroyed while people starve, houses stand empty while people sleep rough — because the use-value of these things matters nothing to capital. Only their exchange-value, their capacity to generate profit, counts.
Marx's greatest discovery: the source of capitalist profit is the unpaid labour of the working class.
The worker owns nothing but their capacity to work — their labour power. They are forced to sell this commodity on the market to survive. The value of labour power is determined like any other commodity: by the labour time necessary to produce it — that is, the cost of food, shelter, clothing, and training needed to keep the worker alive and working.
The capitalist buys the worker's labour power for, say, eight hours. In the first four hours, the worker produces value equal to their wages — this is necessary labour time. But the worker continues for the remaining four hours. The value produced in this extra time belongs entirely to the capitalist. This is surplus labour time, and the value it creates is surplus value.
Surplus value is the source of all capitalist profit, rent, and interest. The capitalist did not earn it — the worker produced it. The entire edifice of capitalist wealth rests on the appropriation of unpaid labour. This is not a conspiracy but a structural feature of the wage relation: whenever labour power is bought and sold as a commodity, surplus value is extracted.
"The rate of surplus-value is therefore an exact expression for the degree of exploitation of labour-power by capital."
— Karl Marx, Capital Volume I (1867)Marx distinguished between two types of capital invested in production. Constant capital (c) is the value of raw materials, machinery, buildings, and tools — the means of production. These transfer their existing value to the product but create no new value. A machine does not produce surplus value; it merely passes on the value of the labour that was used to build it.
Variable capital (v) is the value advanced for labour power — wages. This is the only part of capital that produces new value. The worker's labour not only reproduces the value of their wages but creates an additional quantity — surplus value (s). This is why Marx called it variable capital: it varies, it expands, it grows through the labour process.
The rate of surplus value (s/v) measures the degree of exploitation. If a worker is paid £50 per day and produces £150 of value, the surplus value is £100 and the rate of exploitation is 200%. The worker works one-third of the day for themselves and two-thirds for the capitalist.
The capitalist can increase surplus value in two ways. Absolute surplus value is extracted by lengthening the working day. If the worker previously worked 8 hours (4 necessary, 4 surplus), extending the day to 10 hours increases surplus labour to 6 hours. This was the dominant method in early capitalism — 14, 16, even 18-hour days were common until the workers' movement fought for limits.
Relative surplus value is extracted by reducing necessary labour time without shortening the working day. If technological improvements cheapen the goods workers consume, the value of labour power falls, and a greater proportion of the working day becomes surplus labour time. The worker still works 8 hours but now reproduces the value of their wages in 2 hours instead of 4 — surplus labour rises to 6 hours.
This is why capitalism relentlessly drives technological development — not for human benefit but to extract more surplus value. Every labour-saving machine under capitalism is a machine for intensifying exploitation.
Supply and demand explain price fluctuations around value, not value itself. When supply equals demand, prices correspond to values. Supply and demand explain why a commodity sells for £12 one day and £8 the next, but they cannot explain why a diamond is worth more than a glass of water. Only the labour theory of value can.
The marginalist theory of value — that value is determined by individual preference — is ideological mystification. It reduces economics to psychology and abolishes the concept of exploitation entirely. If value is just what someone is willing to pay, then there can be no such thing as unpaid labour. This is precisely why bourgeois economists adopted it — to defend capitalism against Marx's critique.
Capitalists own the means of production — they do not operate them. The factory owner does not weave cloth; the workers do. Management and organisation are forms of labour that can be — and under socialism will be — performed by the workers themselves. The capitalist's "contribution" is ownership, not labour, and ownership is not a productive activity.
Skilled labour counts as multiplied simple labour. One hour of a surgeon's work may equal three hours of simple labour, because the surgeon's training itself represents additional labour time invested. This does not undermine the labour theory of value — it refines it. All forms of labour are reducible to quantities of abstract human labour.
As capitalism develops, the proportion of constant capital (machinery, technology) rises relative to variable capital (wages). This is the rising organic composition of capital. Since only variable capital — living labour — produces surplus value, the rate of profit (s/(c+v)) tends to fall over time, even as the mass of profit increases.
This is one of the fundamental contradictions of capitalism. The very methods by which individual capitalists increase their profits — mechanisation, automation, labour-saving technology — collectively undermine the rate of profit for the capitalist class as a whole. Capital flees to financial speculation, wages are driven down, crises become more frequent and more severe.
This tendency does not operate in a straight line — there are counter-tendencies such as increased exploitation, cheapening of constant capital, and foreign trade. But the overall direction is clear: capitalism produces the conditions for its own destruction.
The labour theory of value is not academic theory — it is a weapon. It scientifically demonstrates that the entire capitalist system is built on exploitation. Every pound of profit, every penny of rent, every fraction of interest comes from the unpaid labour of the working class. There is no ethical capitalism, no fair wage under the profit system, no reform that can eliminate exploitation while preserving private ownership of the means of production.
Understanding this is the first step toward revolutionary consciousness. The worker who grasps the labour theory of value sees through the ideological fog of bourgeois economics. They understand that they are not paid what they are worth — they are paid the minimum necessary to reproduce their labour power, while the capitalist pockets the rest. The solution is not higher wages within capitalism but the abolition of the wage system itself.
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