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Although the above interpretation dominates most discussions, there are other views. In fact, one accepts the transformation problem's demonstration that individual prices deviate from individual values as its starting point. In this alternative view, Marx rejected modern economists' concern with price theory (without denying a role for supply and demand) and in some ways returned to Locke's questions about the nature and origin of property rights and the orgins of unequal ownership of property under capitalism. That is, in this view, Marx was not interested in developing a labor theory of price.
Marx argued that price phenomena (markets, competition, supply and demand) create illusions that obscure the underlying social relations of a capitalist society. He called this distortion of appearances " commodity fetishism". If there were some easy-to-understand mathematical relationship between prices and values, then property income would clearly correspond to unpaid labor and the class nature of capitalism would be obvious to almost everyone. To Marx, such clarity would undermine capitalism's legitimacy. Commodity fetishism thus helps maintain social stability.
To Marx, social relations are best understood in terms of value: who works and who doesn't? And how do incomes received correspond to labor done? These questions can apply just as easily to non-capitalist societies as to capitalist ones: in volume III, ch. 47, of Capital, Marx suggests that the
These questions form a transhistorical theory of different types of society (e.g., capitalism, feudalism, slavery, and the old U.S.S.R.). However, it is only in a commodity-producing society that these questions are stated in terms of values.
In this view, the LTV, as used in Capital, is a method for understanding the nature of social relationships for capitalism as a whole: the examples of workers producing value that Marx presents in volume I are microcosms representing the totality of society instead of being microeconomic analyses. They present the shared characteristics of a large number of different relationships between capitalists and workers.
In this view, the contrast between labor-values and prices is just as important as their unity or connection. Values correspond to the abstract labor-time socially necessary to produce commodities (the contributions by workers to commodity-producing society), while prices are set by supply, demand, and market institutions.
However, on the macro level, there is a clear relationship between price and value. All commodities are produced by labor (using means of production and technology); the commodity-producing segment of society is nothing but a community of producers working for each other through a complex division of labor mediated by markets. Thus, the total value of the product (the total amount of labor done) corresponds to the total price of the product (such as that measured by Gross Domestic Product). That is, labor embodied equals labor commanded (production equals demand) on the macro level.
In addition, the total surplus-value that workers produce limits total property income (profits, interest, and rent) that all of the individual capitalists together can receive. That is, to Marx, all property income — income received due to property ownership rather than from one's labor — is the result of exploitation.
Thus, there is redistribution of property income within the capitalist class: given the state of class relations and thus the amount of surplus-value produced, a capitalist who receives a high profit rate will be benefiting partly at the expense of capitalists who receive low profit rates. In this interpretation, markets and prices redistribute surplus-value between capitalists so some can command more labor than is embodied in the commodities they have had produced. Others can command less labor than is embodied in their commodities. But in the end, the total amount embodied is equal to the total amount commanded.
The contrast between the "macro" level of values and the "micro" level of prices corresponds to the contradiction that Friedrich Engels posited under capitalism, between the socialized production of wealth and the individual appropriation of it. Although society as a whole organizes production and exploitation, individuals are able to claim and use the individual results of this process. Engels saw this contradiction as resulting in class conflict and crises.
Even accepting this alternative understanding of Marx's LTV, a serious criticism remains: now that Marx has explained the nature of capitalist exploitation, why do we need the LTV? Why can't we explain exploitation in other terms, as say John Roemer does in his 1982 General Theory of Exploitation and Class (BooksEnthsiast.com)? Others argue that Roemer's neoclassical general equilibrium approach hides more than it reveals and is based on dubious assumptions. The debate continues.
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