If you want something visual, this short video (15:12) gives a more practical explanation for labour theory of value.

This relatively short section of “Wage Labour and Capital” addresses the specific issue of how labour value translates into prices in a straightforward way.

In a capitalist economy all surplus-value is labour.

The capitalist pays the worker for his labor-power (ie the capacity for labor) and not the total labour in a day. That “unpaid” labor makes up the surplus value which is monetised as profit.

A value of a commodity could be made up of constant capital (let’s say machinary for sake of simplicity) and variable capital (which is labour). But that constant capital itself is made up of labour as well; we could call constant capital dead labor and contrast that with the living labor of variable capital added to it make the total value.

Why is it called variable capital? Because that is part the capitalist can squeeze to increase the total value produced and therefore increase the capitalist’s surplus value ie profit. How do you “squeeze”? The worker has either have to work either harder or smarter (https://cosmonautmag.com/2021/10/why-machines-dont-create-value/)

Now the above could be considered as use value which is different from exchange value which is what it is traded at in the market.

All of the above presumes a competitive market where no-one is cheating (example wage theft) and the goods produced are socially determined to be useful.

The first chapter of Capital explains this but the following links may help as well:

4 min read: https://en.prolewiki.org/wiki/Labor_theory_of_value

20 min read: https://redsails.org/labour-and-labour-power/

80 min read: https://redsails.org/wage-labour-and-capital/

Look at the sources at the bottom within the above links for further reading.

Marx’s Law of Value is for commodities, ie it cares more about averages of relatively equivalent commodities. The “mud pie” argument and other forms of LTV takedowns apply to Adam Smith’s LTV, not Marx’s Law of Value.

A burnt pie is a failed commodity. It isn’t socially necessary unless there’s a market for burnt pies, in which case it would be worth the average time necessary for said society to create a burnt pie, of course taking into account value from Constant and Variable Capital (constant Capital being things like tool usage, variable Capital being things like labor power).

Exchange values are based on socially necessary labour time, not just any individuals labour time spent on making a commodity. In other words, the social average expected time taken to make any given good is what informs its exchange value. This means that exchange value is inclusive of the average number of burnt cookies produced by an average chef/cookie machine.

Machinery imparts no value into any single good because most machines can produce tens of thousands of commodities before requiring maintenance or replacing. The labour time spent making the machine is distributed evenly across the commodities it produces, so if it took 150 hours to make the machine, and the machine makes 50000 things before it breaks, each commodity has 150/50000 = 0.003 hours of labour time imparted as value into the object, I.e. it’s basically a rounding error.

You get paid 100 dollars a day.

You produce work that your boss sells for 700 dollars a day

Materials, electricity, transport, etc, for the work you produce, cost your boss 200 dollars a day.

So your boss pays 300 dollars to get 700 dollars. Your work is worth more, but you get paid less for it. You get paid 100 to produce work worth 500 (your wage + profit).

In many cases you are not even paid enough to afford buying what you produce.

This is a simplistic example but it demonstrates the basic idea. Things cost money to produce. Then capitalists “add” something extra to that cost, and sell the product. The capitalist profit wasn’t really something added extra. It was removed from the wage the worker pays. Which is why the first thing bosses look to do when cutting costs/looking for more profits (which is always) is not to renegotiate the price of electricity, fuel, or material costs. No, instead they ask you to work extra hours for less money, they offer you a low wage when they hire you (if you’ve been interviewed and hired before, you know that feeling that you’ve been somehow cheated), they lower your wage while crying about the economy, they fire you to hire some other poor bastard who is desperate to take a lower wage.

Burnt pies and shitty cookies are not realistic examples to refute the labour theory of value. Consider what happens in reality? If you worked at a bakery and you constantly burnt pies, there’s several possibilities, but they all lead to one outcome: your boss is unhappy because your accidents are cutting into his profits. Therefore, the value of the pie for your boss is still the same as it always was, whether it’s perfect or burnt. This value is the materials cost + labour + expected profit. They’ll still try to sell it at the same price, probably by hiding it among good pies, and some customers will still buy it because they don’t know any better.

That’s not to say that the price of things can’t be changed. But it’s still intrinsically tied to the cost of labour that went to produce it. When the capitalist makes a decision to change the price, they will almost never lower it below their material cost and their labour cost.

In the grand scheme of things, it’s all about mass production. In many cases the capitalist expects that their workers will make mistakes. They factor that in their profit calculations, and set the price accordingly. When you buy pies, a portion of the price makes up for the lost labour and materials put into creating failed pies.

“Is a cookie still worth its labor if it’s burnt? Is a pie worth the labor if it’s a shit pie?”

Then the capitalist and their managers will scold the laborer to get it right and stop wasting resources to make actual use value (a commodity with actual use) to realize its exchange value through sale, and the laborer, on average, will either comply or join the reserve army of labor; the jobless corps/unemployment for slop shoddy work.

Remember, commodities, under capitalism, need to produced en masse for mass profit; this is why industrial society was made. And use value, especially through perfection of commodities, ensures those products are sold; this is why production is standardized by machinery.

Unless ofc, burnt stuff is what ppl want, like others say

The exchange value is low, because nobody wants burnt cookies or shit pies. But if people did want to buy burnt cookies and shit pies, the exchange value would correlate with the amount of labor required to produce them.

The burnt cookies are factored in because it is all based on averages. If 1 in 100 cookies are burnt the burnt cookies are worthless but the unburnt ones make up that loss. The guy who can burn no cookies will profit more than average.

The exchange value of a commodity is derived by the average labor time it takes to create the product. “Labor time” also includes all the time not working that is required to be spent maintain and reproducing the labourers. A job that is hard on the body needs more rest time, a job that requires more training takes more time to reproduce workers. Automation lowers commodity prices because it reduces both the physical strain and training required thus making workers able to spend more of their lives producing.

I never got though capital because I found the best way to understand it was to re read the whole thing from the start after reading a new chapter.

I think I understand that it says the exchange value of a product is proportionate to the labor time used to create it. Am I getting that correct?

This is my understanding of things, so I think you are correct. Although I think “time” is not the correct dimension. I think more broadly the value of a product is linked to the labor that was put into it, across many different factors, instead of just time alone.

“Is a cookie still worth its labor if it’s burnt? Is a pie worth the labor if it’s a shit pie?”

Critiques like this are irrelevant because they are focusing on small situations where a single item of labor did not turn out as desired. Mistakes get made during the process of creating something, and most normal people don’t focus on the results that didn’t turn out correctly. The example of labor to produce a “shit pie” is not even worth considering.

If anything, you could make a case that if you have some piece of labor that is very difficult and prone to failure you could argue that the value of the product also includes all the failed attempts to create the product correctly, or the difficulty involved.

I am not an economist, I do not read theory, but this is my uninformed take.