One of the most important thinkers of recent times and, who will certainly remain in the social and cultural imagination for many more years, is undoubtedly Karl Marx.
This academic article will delve specifically into his "Marxist theory of exploitation." In the first volume of his work Das Kapital, the German philosopher introduces his labor theory of value, which *grosso modo* states that the value of a given commodity is determined by the socially necessary labor time involved in its production. Thus, labor, according to Marx, is the sole determinant of value. He explains it thus:
What determines the magnitude of the value of any article is the amount of socially necessary labor, or the socially necessary labor time for its production... Commodities, therefore, in which equal amounts of labor are incorporated, or which can be produced in the same time, have the same value. The value of one commodity is equal to the value of any other, just as the labor time necessary for the production of one is equal to the labor time necessary for the production of the other
If Marx's theory were correct, it would make sense to think that the difference between the value (synonymous with labor) of the good and the price at which the entrepreneur sells it (what he calls profit and equates with theft) generates a surplus value that manifests the exploitation to which the workers are subjected, who, with their time and labor, imbue that good with value. The problem is that Karl Marx's theory of exploitation has practical gaps.
Following other authors, the “subjective theory of value” can be brought up. This theory, proposed by theorist Carl Menger, among others, emphasizes that someone can create value simply by transferring their ownership of something to someone who values it more, without necessarily modifying that thing. Adam Smith, who, despite being a classical liberal and having emphasized that the value of a good is objective and not, as we are seeing, subjective, mentions in his The Wealth of Nations the “paradox of value”:
Nothing is more useful than water; but it will purchase scarce any thing; scarce any thing can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a great quantity of other goods may frequently be had in exchange for it
In short, water is very abundant and diamonds are not. Water, at least in developed countries, is easily accessible. Diamonds are not. Therefore, the value that individuals place on diamonds is higher than the value of water, despite the fact that water is not only more useful but necessary for life
Surely there are still doubts, so two more examples related to diamonds are proposed: a diver risks his life going to the bottom of the sea in search of a precious diamond and when he finds it, he sees that right next to it there is also another stone (not precious) that amazes him. He collects both the diamond and that stone from the bottom of the sea and returns to land. He soon puts both stones up for sale, which have taken him exactly the same time and effort. And firmly believing in Karl Marx's theory of value, he thinks that the value of the diamond and that of the sea stone are exactly the same. "I'm a millionaire!" he thinks, however, he will not find anyone who will pay him the same amount of money for the diamond as for the other stone. In short, Marx was wrong and the poor diver will not find anyone who will grant the stone as much value as the diamond.
Another example? Let's think about fashionable pants, yes, those that are ripped. You've never thought about why pants that have less material than those that aren't ripped cost more. Well, because people who like to be fashionable are willing to spend more (value more) ripped pants than those that aren't. And entrepreneurs play with this subjective value that customers are willing to pay for such a good. Obviously, price, as a mechanism of information, is configured both by an "estimation" that the entrepreneur makes of what individuals will be willing to pay for such a good and, in addition, by the law of supply and demand that acts on the free market. There is nothing "objective" about all of this. As we can see, it's not easy to be an entrepreneur or a worker, but both "legs" of a company are intimately related and necessary.
