Labour Theory of Value

The Labour Theory of Value suggests that the value of a product is primarily determined by the amount of socially necessary labor required to produce it. In other words, how much work, on average, goes into making an item sets its worth. This theory emphasizes that the value isn't just about the materials or market demand, but fundamentally about the effort and time invested by workers. It was historically associated with classical economists like Adam Smith and Karl Marx, and provides a way to understand how labor contributes to the creation of value in an economy.