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Labor theory of property vs. Labor theory of value

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Sometimes people confuse the "Labor theory of property" and the "Labor theory of value," when they are actually quite different. This article will clear up the confusion.

The Labor theory of property is simply the idea that you own that which you mix your labor with to acquire. For example, if you pick an apple from an unowned apple tree, you own that apple because of the effort you put in to acquire it. The most famous philosopher who promoted this theory is John Locke, and he added a proviso that you can only own property if you leave "enough, and as good, for everyone else."

That has no relation to the Labor theory of value. That theory says the economic value of a good is determined by the amount of labor put into creating it. That theory was popularized by Adam Smith, David Ricardo, and later Karl Marx.

Unlike the property theory, the value theory is an unsound theory. You can probably think of countless examples of how the economic value of something and the amount of labor put into it are unrelated. For example, two people could expend the same amount of labor to create two different pieces of art. Under the Labor theory of value, they are of equal value. However, if one of them sells for $1,000 and the other sells for $10,000, the value is obviously not determined by the amount of labor. The value is instead determined by individuals' subjective preferences, or how much the good or service can satisfy an individuals' needs and desires. That is the Subjective theory of value, which is in a nutshell: things do not have value, people value things. Economics aside, that is the moral way for value to be determined, as the value of someone's work should be determined by how well it serves others.

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