Socially necessary labour time

The socially necessary labor referred to in Marxist political economy, the amount of work units on average contained in a produced commodity. It is defined by Karl Marx as an average size. It is the labor value of a commodity and is expressed in exchange value and price of a commodity.

Labor value

In the capital of the labor value of a commodity differs from generally from its production cost. This results in the transformation problem. In modern economic theory, the socially necessary labor is determined by Optimalisierungmethoden that use of marginal analysis and the methods of linear programming. It is the problem of cost minimization. In the optimum, the marginal cost multiplied by the wage rate socially necessary labor sector.

The determination of the socially necessary labor in capitalism

In capitalism, the socially necessary labor by the capitalist producers is determined, since it is he who decides on the use of resources. In the cost minimization problem is assumed in general that the producer is under the conditions of perfect competition. This implies that the price of the product and the price for the services of the factors of production are given and can not be influenced. The problem is to combine the production factors so that the average cost of manufacturing be minimal. The average costs are equal to the Marxian production cost prices (in case the paid wage arrears ). Here, the average cost C / x to x as a function of the output quantity displayed. The minimum of this function, the average cost is equal to marginal cost dC / dx.

From the Optimalisierungsbedingungen follows that the value of the marginal product of each factor is equal to the price of its services. In the case of work, this means that the capitalist the amount of work in relation to the means of production adjusted so that the wage rate w is equal to the marginal productivity of labor ∂ x /? L multiplied by the price of the product p.

W = p ∂ x /? L However, the wage rate is a ratio of money per job. This is better expressed when the equation is transformed to

W = p / ( 1 / ( ∂ x /? L )) = p /? L / ∂ x. This is possible because in general, the production features, one of which is derived the intrinsic productivity inverted. w is equal to the price of the goods in proportion to the inverse of the marginal productivity of labor.

The term? L / ∂ x can be found in the literature of political economy for the first time in William Stanley Jevons in his Theory of Political Economy (4th edition, p 177). He described him as a subjectivist ' marginal disutility ' (boundary suffering ). The term, however, is objectively determinable as a production- theoretical size. It is the amount of work necessary to create an additional unit of the product. It is the analytical expression of the socially necessary labor.

From the Kostenminimalisierungsbedingungen follows that the wage rate multiplied by the socially necessary labor is equal to marginal cost. Furthermore, it can be shown that a producer maximizes his profit, if he so determines its output quantity that its marginal cost is equal to the product price. Thus:

P = dC / dx = w? L / ∂ x In a capitalist economy, the law of the value realized by the profit -maximizing behavior of the capitalists. The marginal analysis allows us to determine the labor value of a commodity, without knowing the intricacies of the production processes that have created the means of production and to know the working expenses; that are required for those processes. In fact, the capitalists determine by their behavior what Marx referred to as the socially necessary labor for the production of a commodity.