A blupete Essay

Labour Theory of Value, Part 6 to blupete's Essay
"On Property Rights"

One prominent theory of value is grounded on the notion that the origin of property is labour. Labour -- the "exertion of the faculties of the body or mind" -- is, indeed, indispensable to the production of most property.11 Whether the resulting product, or commodity of production, has value, or not, may have little to do with the labour spent in bringing it into being. Value is "that amount of some commodity, medium of exchange, ... which is considered to be an equivalent for something else; a fair or adequate equivalent or return." Value is not determined by the maker or makers of the commodity; it is determined by the market.

Thomas Carlyle, an individual who had much influence during the 19th century, preached that "work is noble." To Carlyle, as was the case for Marx who came after him, labour was the real source of wealth. John Stuart Mill spread the same idea in his work Principles of Political Economy (1848) where he concluded that the production of wealth12 came about only through physical human activity. Mill concluded -- wrongly, as so many economists have done since -- that a value, as struck by the market, of any particular commodity or service, is the result of some person's or persons' labour, and not (which in fact it is) a signal to a person or persons that they have made a right (or for that matter a wrong) decision or series of decisions, encouraging others to do, or not to do likewise. Value and labour can not be equated.

So, the thought is, that a man gains a right to property because he removed something from nature and mixed his labour with it. And this is so, as long as he keeps possession of it. A right to property, by long established law, comes from the possession of it.13 Of course, he may be deprived of his possession of it, if it can be proven that he took possession of it illegally, through fraud or thief14; otherwise, he has a right to it whether he took a hand in the production of it, or not. This is a very important point which was lost on many early economists. Belief that property rights were founded in labour (Labour Theory of Value) is wrong and has led to some fruitless economic conjectures; and, worse, such a theory in the heads of collectivists, proved to be, as history will readily show, destructive to the state and the overall welfare of mankind.

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2011