Undoubtedly the best lone source for understanding Marx’s Labor Theory of Value (LTV) is his work, Das Kapital (Vol 1). However, there are accessibility limitations when it comes to this text; it’s dense, goes to great length to explain intersectional detail, and it is incredibly long to read.
To that end, with this edition I hope to provide a straightforward framework for explaining LTV to the common worker. In doing so one exposes that worker to new ideas, and powerful ones; the revolutionary potential then comes with raising class consciousness as a whole.
On Value
The first thing to understand about the economy is that it is made up of products, or commodities. Every product has a use-value (its utility, or what it does for us) and an exchange-value (what it can be traded for, or its price).
Think about a popular social-media app. Its use-value is connecting with friends or sharing content, but its exchange-value is how much profit it generates for the corporation that owns it, through your data, targeted ads, and subscriptions. A barista’s coffee has a use-value (caffeine, taste), but its price (exchange-value) is what’s relevant to the capitalist.
Under capitalism, virtually everything becomes a commodity, critically including the worker’s ability to work, or labor power.
Whether you’re making physical goods or providing digital services, your output is a commodity. More profoundly, you, the worker, are selling your labor power for a wage. Even the gig worker sells discrete, commodified tasks.
On Human Labor
Marx was able to show that the value of a commodity comes solely from the human labor expended to produce it. Machines and raw materials transfer their own value to the product, but they don’t create new value. Only living labor does.
We find then that the immense value of a piece of software, a new electric vehicle, or a complex medical procedure is fundamentally derived from the human intellect, skill, and physical effort of the workers who designed, built, marketed, and maintained it.
You could phrase it like this: “Imagine a robot making a widget. The robot itself was built by human labor. The metal it uses was extracted and processed by human labor. So, even when automation seems to do the work, the original source of all new value added remains human labor.”
You might be asked: “why are mass-produced items so inexpensive?” The answer is that the global capitalist system has driven down the socially necessary labor power needed to produce them through hyper-efficient and often exploitative supply chains, automation, and globalized labor. If you spend 10 hours handcrafting a chair that an average factory can produce in 1 hour, your chair only has 1 hour’s worth of socially necessary labor value.
On Surplus Value
Labor power is a special commodity in a few key ways; one, it is wielded only by the capitalist, and differentiates such an individual from a member of the working class. Second, labor power has the unique ability to create more value than it costs to produce itself (as in, more than the worker’s wage).
Your wage (supposedly) covers the cost of your subsistence (food, rent, transport), but the value you create for your employer far exceeds this. Think of a software engineer whose salary covers their living costs, but their code generates millions for the tech giant. A delivery driver’s per-delivery fee covers a fraction of the value created by their rapid movement of goods, contributing to immense platform profits.
The mentioned profits of corporations like Amazon, Google, or Starbucks are not simply from clever ideas or taking “risks”. They are overwhelmingly derived from the unpaid labor, or surplus value, extracted from their vast workforce: the warehouse workers, delivery drivers, software engineers, baristas, customer service reps, and even the “creators” on their platforms. This applies to every industry, from manufacturing to super-stupid AI.
Try explaining it like this: “When you work, you create new value. Part of that value pays your wage (the cost of your labor power). But a significant part of it, called the surplus value, is taken by the capitalist. That’s how they make their profits. This is systematic appropriation of your labor, and it isn’t fair.”
On Praxis
The general method is to always start from the worker’s direct experience. Ask them to reflect on their own day-to-day work.
Some example questions:
“How much does your employer charge for the services your provide or the products you make, compared to your hourly wage? Where does that difference go?”
“If a restaurant charges $20 for a dish, and the ingredients cost $5, what accounts for the remaining $15?”
“Why are tech executives billionaires while their contract cleaners or content moderators barely scrape by?”
It’s important to emphasize that it’s the system causing people issues, not ‘bad bosses’. Highlight that exploitation isn’t a moral failing of capitalists on an individual basis, but instead is an inherent, structural feature of the capitalist mode of production itself. Even “good” employers must extract surplus value to survive in a competitive market. The problem is the very logic of capital.
A bit of a shorter read today, but I’m hoping it was concise and helpful. Understanding how our surplus value is extracted from us is not just an academic piece of knowledge, but a weapon; armed with it, we can see through the illusions of capitalism and recognize our collective strength.
Know that there is always the possibility of a better world. Work hard for yourself, but don’t sell yourself to the capitalist system; they don’t deserve it.