Labor-time calculation is a method of economic calculation that uses labor time as the basic unit of accounting and valuation. This method of calculation was advocated by the economists
Otto Bauer, Helene Bauer and as an alternative to
calculation in kind for a
socialist
Socialism is an economic ideology, economic and political philosophy encompassing diverse Economic system, economic and social systems characterised by social ownership of the means of production, as opposed to private ownership. It describes ...
economy. Otto Leichter criticized in-kind calculation on the basis that rational accounting required a general unit for comparing costs of heterogeneous goods.
The basis for labor-time calculation is found in
Karl Marx
Karl Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, political theorist, economist, journalist, and revolutionary socialist. He is best-known for the 1848 pamphlet '' The Communist Manifesto'' (written with Friedrich Engels) ...
's analysis of value in capitalism. However, Marx was vehemently opposed to any proposal for using labor-time as the basis for socialist calculation because his concept of
socially necessary labor time was a conceptual framework for understanding and analyzing value in capitalism. In Marx's view socialism would operate according to its own economic "laws of motion" distinct from those of capitalism.
See also
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Calculation in kind
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Economic planning
Economic planning is a resource allocation mechanism based on a computational procedure for solving a constrained maximization problem with an iterative process for obtaining its solution. Planning is a mechanism for the allocation of resources ...
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Socialism
Socialism is an economic ideology, economic and political philosophy encompassing diverse Economic system, economic and social systems characterised by social ownership of the means of production, as opposed to private ownership. It describes ...
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Socialist calculation debate
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Socialization (economics)
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Socially necessary labor time
References
Economic planning
Marxian economics
Social democracy
Socialism
Socialist calculation
Theory of value (economics)
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