<\/span><\/h2>\n\nMarx’s theory of value, commonly known as the labor theory of value, suggests that the value of a commodity is determined by the amount of socially necessary labor required for its production.<\/b> According to Marx, every commodity has both a use-value (its usefulness) and an exchange-value (its value in relation to other commodities). The exchange-value of a commodity, he argued, is ultimately determined by the labor power expended during production.<\/p>\n
Marx believed that the value extracted from labor is the source of profit for capitalists. He argued that workers are only compensated for the socially necessary labor time required to reproduce their labor power, while the surplus value created by their labor becomes the profit of capitalists.<\/p>\n
Therefore, Marx concluded that the capitalist system exploits workers by paying them less than the value they create.<\/b> Capitalists continually strive to increase productivity and decrease necessary labor time to maximize profit, often leading to worsening conditions for the working class.<\/p>\n