Elements of the Labor Theory

Let's pause and review some basic points. In a capitalist economy, the "natural price" or value of any commodity is its cost of production.
Labor, the common element of all production, is the measure of cost.
qualifications:
- It is socially necessary labor that determines value. Inefficiency does not increase value.
- Labor embodied in machinery is incorporated in the value of the output proportionately as the machinery is used up.
- The value of educated labor will be greater than that of uneducated labor proportionately as labor is required for the education.
In a capitalist economy, labor is a commodity, and so the value (wage) of labor is the cost of production of labor, measured in labor hours.
In a modern economy, thanks to increased productivity, a labor-day can produce more than its cost.
This difference is called "surplus-value" and is the basis of capitalist profits and exploitation.