Question

Which economist is known for advocating for the "labor theory of value" as a critique of capitalism?

• A. Adam Smith
• B. John Maynard Keynes
• C. David Ricardo
• D. Friedrich Hayek

Answer 1

Answer:

C. David Ricardo

Labor Theory of Value:

• David Ricardo, a 19th-century economist, expanded on the ideas of earlier economists like Adam Smith and developed the labor theory of value as a key component of classical economics.
• According to this theory, the value of a commodity is not determined by its utility or the amount of capital invested in its production but rather by the amount of socially necessary labor time required to produce it.
• In essence, the more labor it takes to produce something, the more valuable it is.
• Ricardo's labor theory of value was often considered as a critique of capitalism.
• The theory argued that in a capitalist system, workers were often paid less than the actual value they produced through their labor.
• This difference between what workers were paid and the value they created was referred to as "surplus value."
• Ricardo believed that capitalists, who owned the means of production, were able to extract this surplus value from workers, resulting in economic inequality.