Explained: Labour Theory of Value

In the latest episode of the IEA Podcast, IEA Communications and Public Affairs Officer Kieran Neild-Ali sat down with IEA Head of Political Economy Dr Kristian Niemietz to discuss the labour theory of value.  Many economists subscribed to the labour theory of value, which argued that a good’s value derived from the amount of work that went into making it. The theory has since been unravelled and replaced in the last century by a different theory produced by the Austrian School of economics. But the theory is still an important topic of discussion as it was the basis of Marx’s critique of capitalism. And many detractors of capitalism still use the labour theory of value .