Labor theory of value: The value of any commodity is
ultimately derived from the labor used to create it.
Use value: whether something is useful or not; produced to
satisfy one’s own needs; measured qualitatively.
Exchange value: produced to be exchanged for other use
values; defined quantitatively. (Under capitalism, the
purpose of work is to produce exchange value.)
Capitalism obscures the fact that labor is the ultimate source
of value. Since workers produce commodities for capitalists
(instead of for themselves), these commodities and markets
take on an independent existence. This process, the
fetishism of commodities, allows for the exploitation of
laborers.
Workers are exploited because they are paid less than the
value they produce with their labor
E.g., workers are paid for the value of four hours of
labor, but they work eight hours. The value of the four
additional hours of work is surplus value kept by the
capitalist.
Surplus value: the difference between the value of the
product when it is sold (its exchange value) and the value
of the elements, especially labor, consumed in the formation
of the product