labor theory

Labor theory suggests that the value of a product is primarily determined by the amount of labor required to produce it. In other words, the true worth of goods and services stems from the work invested in creating them. This idea was notably developed by economists like Adam Smith and Karl Marx, emphasizing that labor is the fundamental source of value in an economy. It contrasts with other theories that focus on supply, demand, or subjective preferences. Essentially, labor theory highlights the importance of human effort in generating economic value and shaping production.