This question <118|115> overall <123|125> Hans: <122|127>.

Question 86: Did Marx introduce additional assumptions in order to resolve the paradox of the lazy worker, or does his solution follow from assumptions made or results derived in section 1.1.d?

[124] Hans: Cost and value are two different things.   Pete, in [118], defines the value of a good to be the sum of its costs plus profit, the minimum value being the sum of the costs alone. Despite the fact that labor costs usually are a large portion of the costs, this theory is importantly different from Marx's theory.

In Marx's theory, the value of a good is not determined by its costs, but by its labor content. If a good has 10 hours of direct and indirect labor in it, and each hour of labor produces a value of 30 dollars, then the value of the good is 300 dollars.

The breakdown of this value of 300 dollars into cost and profit does not explain how these 300 dollars are constituted. Rather it explains who gets what when the product is sold.

To keep the example as simple as possible, assume that there is only direct labor of 10 hours involved, no materials or machinery have to be bought. And assume each laborer gets $20 per hour.

Then the labor cost is $200 and the profit is $100.

The important point here is: although the workers produce a value of $30 per hour, their wage is only $20 per hour. Marx will explain in chapter Six how this wage is determined, all we need to know here is: this wage is lower than the value produced by the worker. The difference between the full value of the product based on its labor content, and the costs, is the profit.

This is why Marx says: profits come from the unpaid labor of the workers.

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