If Marx says that value is determined by socially necessary labour time isn’t that circular or basically the same as the marginalise argument that value is only determined by what is desired by society? I.e. isn’t the “socially necessary” part basically making a demand-side argument? Although at a societal level rather than individual.
Or have the lib brain worms got to me and this isn’t actually the main conflict between LTV and marginalism?
You wouldn't happen to be reading Value, Price, and Profit, would you? Marx discusses this in the 6th and 7th sections.
Marx is motivated by the need to pin down some standardized unit of measure for value against which anything else can be compared/measured. That common unit of measure is (average) labor-time, "crystallized" into a commodity, because labor inputs are common to the production of all commodities. Even currency (or at least currency tethered to gold/silver/copper), the unit of monetary value, can be measured according to the quantity of labor needed to produce it.
Marx acknowledges the seemingly tautological formulation that the value of labor is therefore measured by the value of labor but clarifies that what workers sell to capitalists isn't their labor, but rather their laboring power, i.e. their productive capacity, or what lib economists call "human capital". A worker who works for 8 hours isn't getting paid for the equivalent of 8 average labor-hours, but is getting paid for essentially renting out their productive faculties for that period of time. (This is of course assuming the labor market is perfectly competitive.)
The value of laboring power is determined by the value of all the socially-necessary labor (childcare/education/training, food/housing/healthcare, etc.) needed to build that laboring power, to sustain it as it depreciates from aging/exhaustion, and to reproduce it from one generation to the next, measured the same way the value of any other commodity is measured according to LTV.
Marginalism, meanwhile, operates on the basis that all people are utility-maximizers in addition to businesses being profit-maximizers. Utility - which is entirely subjective, is only indirectly observable based on either stated or "revealed" preference, and deals with wants and not needs (and even then, requires both willingness and ability to pay) - is maximized by each individual by purchasing a combination of commodities which equilibrates the marginal utility w.r.t. each commodity with the given price of that same commodity, for a given level of income. The marginalist model says that demand arises from consumer preferences through every buyer unconsciously doing this cost-benefit calculation, with little regard for what's a necessity and what isn't.
Marginalism also states that each business maximizes profits by utilizing a combination of labor and capital inputs for which the marginal revenue from the sale of each commodity equals the marginal cost of producing that commodity, corresponding to wages for labor inputs and rents for capital inputs (Note: Marx states that capital is "dead labor", i.e. that capital inputs are lagged labor inputs.) Supply arises from this cost-revenue calculation. In a perfectly competitive market, the price, which is the marginal revenue, is exogenously set to equal the marginal cost.
The main conflict between marginalism and LTV is that marginalism suggests value is completely subjective and rooted in utility, while LTV suggests value can actually be objectively measured according to the required labor input. Marginalism is idealist, while LTV is materialist.
Correct me if I'm wrong but I don't see a conflict between LTV and marginalism, or that the former is materialist where the latter is idealist. It seems to me like they're both independently sound concepts that aren't really interchangeable, or in competition with one another except in that they're both called "value."
If marginalism is idealist, how could there even be a materialist analysis of the demand side of the economy? After all, individual preference is both pretty important and pretty inscruitable, and while the marginalist sort of value might be subjective in that it varies from person to person, for a particular person or over a large population of people it's pretty concrete, or no less so than the labor theory of value. Just like how you could call the LTV "subjective" because it takes different people different amounts of labor to produce the same thing, but it really isn't, because the concept of socially necessary labor takes care of this.
This is basically how I see it as copied from something I wrote farther down:
Amazing explanation thanks. I’ll have a read of those chapters. Like @Liberalism below I can’t really see a strong conflict between the two, but maybe significant differences arise in practice?
Looking at an econ101 graph of MR=MC, couldn’t you just say that any marginal increase in production cost is basically all labour cost, with the profit area between the two curves being the surplus labour/exploitation? The blue on this graph for example: https://friedmanseconomy.files.wordpress.com/2013/01/picture4.jpg
Meaning you could argue that capitalism is inherently exploitative and steals surplus labour using both analytical methods.