Time is easily wasted, though. The labor theory of value ignores this, and ignores the value of cleverness as a result.
If I need to grind wheat for bread every day, I could spend hours a day working hard to grind it by hand, or I could spend a month or so to build a very basic water wheel/grindstone and free up all that time.
The resultant bread is still bread either way. If someone chooses to spend all their time doing the old/inefficient type of grinding, by the labor theory of value, they should be able to demand more money for the result. But why pay more money for something that took more time to make than an equivalent product made with automation? We value bread for being tasty and filling, not by how much time went into making it that way.
Some level of labor is almost always required to get raw material into a valuable state, but the amount of labor does not determine the value. Labor just regulates supply; if something takes a lot of work to make, the supply will be lower than if it were easy to make, which affects value.
That’s the paradox of productivity. You create a machine to make bread and all that happens is that bread gets cheaper in time terms once you strip away the money abstraction.
You can see this by comparing production relative to something that can’t be automated away but is still valued over time - like a violin player.
The machine forces people in the same business down to your level, but people in a less automated arena go up in value relative to your bread.
It's not that. I can easily believe a good DNN could today generate better (by any kind of objective standard) music than one created by top composers.
But here is where we discover another component of value that exists in arts: the connection to human mind. Given a piece of music you like that you don't know the provenance of, you'll probably value it different after learning it was composed by a human vs. generated by an algorithm on the spot. It's irrational, but that's how things are with people.
A similar case would be of story generation in games. I don't know about you, but for me, learning that a story or a quest line was procedurally generated essentially destroys my suspension of disbelief on the spot.
It's like a defense mechanism. You value the work less because it was computer made rather than to admit to your flawed value assignment and vanity or human supremacism.
It's the difference between a friend giving you a note with words written on it, and finding a bunch of sticks arranged to the words by chance while strolling through the woods. There is nothing "flawed" about that valuing those things differently, how I judge things as valuable is entirely arbitrary, and entirely up to me.
And with AI it's not even by chance, even mediocre results are produced only after processing the input of countless humans. It's infinitely less cool of a coincidence than something that is actually random, like sticks forming a sentence where the wind blew them, and a complete NOP when it comes to human self-expression.
you're presuming the value and price are static in that example.
once the capital investment has been made, the price of the bread will go down because less labor will be used to make it, as the marginal cost of the bread goes down. the labor in the capital investment will be amortized over time in the price. the capital investment itself should only capture the riskiness portion of the project, not the majority of the resultant productivity gains.
and in many cases, people do pay more for a product made using more labor--i pay more for my manually-roasted beans than i would for mass-roasted ones. the higher price reflects the added labor in the value chain.
that's what i mean by the labor theory of value being more prominent, not to the exclusion of other theories of value.
I’m not making any statements about current practices or what value is typically assigned to labor vs initial capital investments, just to be clear.
And I know prices go down due to less labor being needed, meaning more supply results from less investment, but my point is that it’s wrong to assume labor is the underlying source of value. Labor has no intrinsic value. It’s only valuable in relation to output.
For some people, the “image” of a product and the amount of time and care put into it is an important part of that output. So they value products that have high labor costs even when comparable but less labor intensive products exist.
But to take an extreme example, if I banged two rocks together from 9-5 every day for the rest of my life, I wouldn’t expect a paycheck because there isn’t any useful output there, despite the labor.
The proof was in the counter example I provided, which is one of many. There are clearly instances where labor is present, but there isn't any value being generated. If labor had intrinsic value, that would not be the case.
I'm not discounting the value of labor relative to output, and it's clearly related to how we assign value to that output, but I think the labor theory of value is too simplistic and places too much value on labor and not enough value on utility.
If I need to grind wheat for bread every day, I could spend hours a day working hard to grind it by hand, or I could spend a month or so to build a very basic water wheel/grindstone and free up all that time.
The resultant bread is still bread either way. If someone chooses to spend all their time doing the old/inefficient type of grinding, by the labor theory of value, they should be able to demand more money for the result. But why pay more money for something that took more time to make than an equivalent product made with automation? We value bread for being tasty and filling, not by how much time went into making it that way.
Some level of labor is almost always required to get raw material into a valuable state, but the amount of labor does not determine the value. Labor just regulates supply; if something takes a lot of work to make, the supply will be lower than if it were easy to make, which affects value.