Marianna Mazzucato’s most recent book is a very good reading on the theory of value. Mazzucato starts by recapping theories of value throughout the history of economics, showing that what economists consider productive changed through the centuries.
Marx’s theory of value and capital is briefly described and some incoherences become apparent.
Marx postulated value is determined by whether an exchange occurs. Marx also postulated that labour is the only source of value and not a product’s scarcity or demand.
Thus Marx concludes that keeping a portion of the population unemployed would depress wages such that the capitalist (that owns the production means) would not need to replace machines instead of people. As labour is understood as the only source of value, Marx considered a machine’s (constant) returns are not comparable with a person’s hability to become more efficient and improve the capitalist’s profit.
Yet in doing so Marx admits some value in non-exchanged production factors – the unemployed and the production means, respectively implicit and embedded in the value of goods and services.
In doing so, Marx admits value in scarcity – in Marx’s perspective, the unemployed make employment scarce – justifying the value of assets such as estates and (technology embedded) production means.
In other words, Marx is unable to justify why only labour accrues value because Marx considers labour scarcity increases labour value when exchange (rather than intrincacies such as scarcity) is the process of determining value.
It is thus arguable that if exchange stands as the process necessary to determine labour’s value (as embedded in goods and services) then human capital (that Marx relegates by considering machines and persons are interchangeable) underpins labour’s value – and remains the remit of workers.
To be fair, this insight was untenable in Marx’s largely uneducated XIX century Europe, revealing the theory’s inadequateness to a world where the “advent of computers and the Internet raised the relative productivity of higher-skilled workers.”
Read my post on the Regional Studies Association blog Embedding value chains to enhance Cohesion