THE LABOR THEORY OF VALUE: A MARGINAL ANALYSIS

This article presents the marginal approach to the labor theory of value. The difficulties of the classical and Marxian labor theory of value are overcome when labor value is understood as marginal labor value analogously to marginal cost. Marginal labor value is the reciprocal of the marginal productivity of labor. Under perfect competition, relative prices are equal to the ratio of marginal labor values; indeed, Pareto-optimality implies the validity of the labor theory of value but in general, even in a Pareto-optimal state, there is exploitation. It is shown that in principle, a capitalist system can never be in a Pareto-optimal state. To assure a maximum productivity of labor and therefore minimum socially necessary labor values, society has to assure the socially necessary accumulation of capital and to organize the formation and control over capital democratically and collectively, a Pareto-optimum without exploitation.