There is no classical-Marxian labor theory of value. Marx was a critic of the classical labor theory of value at several levels, including as discussed here Adam Smith's *fetishistic* criterion of commodity durable vendibility for productive labor (see Sydney Coontz, Productive Labor and Effective Demand; Ernest Mandel actually accepted this criterion), which threby excludes all services as surplus value generating. It's not the nature of thing produced but the social relation under which things/services are produced that determines whether labor has been productive of surplus value. See Patrick Murray's criticism of Mandel in CJ Arthur and Geert Reuten,ed. The Circulation of Capital
On the other hand, Marx does seem to have accepted Ricardo's focus on only reproducible commodities. The price of rare works of art wholly depends on the whims of the buyer due to their intrinsic scarcity and would thus not be regulated by their socially necessary labor time--Marx freely admits this exception. So while Roger may be correct that an artist-genius working for a capitalist perhaps in a quasi putting out system produces surplus value, it is helpful to remember that Marx is concerned to limit his analysis initially to what is new and distinct about capitalism--the mass production of reproducible commodities by means of wage labor, collectively organized. Marx thus excludes from his initial analysis rare works of art and land--both of which predate capitalism. Some (neoclassical economists) would say that it is illogical to make such exclusions in the analysis of the price form, but Marx would say that it is more important to get first at the historical specificity of capitalism in order to disclose its law of motion, as Karl Korsch put it. There is a fundamental conflict here as to the appropriate method in the social sciences.
Now Marx's critique of classical economics cuts deep.
According to Marx, the classical economists approached questions from the standpoint of the single individual and thought of production solely an individual matter. Their whole standpoint demanded that they should prove that all incidental higgling apart, prices (the money name of values) would coincide with values, and not only equilibrium but (and thereby) *equality between men* would be established by competitive exchange.
It was obvious to Marx that their theory was falsified by the facts--that the free play of prices secured by the freeing of markets from feudalistic restraints had not brought equality or equilibrium.
Pressed by practical problems of which classical economics could not make sense, Marx thus took on the task of the critique of political economy and the labor theory of value on whch it was based. There have been very few Marxists who have meditated at length or even with insight about how profound a critic of the classical labor theory of value Marx was--II Rubin, Grossmann, William J Blake, Paul Mattick Sr, Geoffrey Pilling, Patrick Murray, Moishe Postone, George E McCarthy.
There is still need for a greater clarification of the nature of Marx's critique of the classical labor theory of value since it works at so many levels. The above works do help to flesh out Angela's most provocative claim here
>there is no reason to assume that this has to be the case, and certainly no
>reason to avoid the categories (such as surplus value,
>productive/unproductive, rate of surplus, etc) as central to an analysis
>insofar as it's recognised that they are categories of capitalism. they are
>not Marxian categories in the sense that they read capitalism from an
>archimedian point, outside of capitalism, they are an immanent critique of
>it. what stops them from being simply immanent is the refusal to eternalise
>and ontologise them. the risk involved in algebraic formulations is that
>very little or no time is spent insisting that they are not eternal, the
>categories appear like the inputs and outputs of a great abstract machine.
I don't have an answer for this provocative question below either. Mark Blaug has suggested the irrelevance of value categories since not only are they not seen, no one acts in terms of them. Mark Blaug is a very stimulating critic of Marx, and Fred Moseley has engaged in a battle of the titans with him in a book he has edited Heterodox Economic Theories: True or False? 1995
>P.S.. Rakesh. why don't prices (rather than the average rate of sv) feature
>in the decisions of individual firms to, eg, locate their operations in
>export processing zones? I guess this is another way of asking whether
>capitalists are the same thing as capital, and whether capitalists always act
>as capital should... maybe I've missed something, but doesn't it take
>credit to impose a kind of discipline on capitalists?