There is a FAQ on the labor theory of value at: csf.colorado.edu/pkt/authors/Vienneau.Robert/LTV-FAQ.html
In addition, this item appeared originally on the PEN-L mailing list and was written by Jim Devine in response to a question about whether the labor theory of value was correct:
It's hard to say that Marx's "law of value" is "not true" if one doesn't understand it, just as it's hard to say that it's "true" if one doesn't understand it. In fact, I think there's a lot of questions about what "it" is. One thing is that the "Labor Theory of Value" does _not_ assert is that "average market prices" equal "labor values." Quite the contrary: deviations of prices from values are just as important as their connection with each other. Marx was quite conscious before he started “Capital” that values and prices deviated from each other. BTW, Duncan Foley's article in the most recent issue of the Review Of Radical Political Economics is quite good on this subject.
Marx's "law of value" is first and foremost NOT a theory of prices. Economists have typically approached “Capital” _assuming_ that it's about prices and pricing, but that seems more a symptom of commodity fetishism than a product of a serious reading. That assumption gets in the way of a serious understanding. (Hey, I've been there. I assumed that “Capital” and the "Labor Theory of Value" was about pricing, too. Then I read the book. The section on comm. fet. and the end of volume III are especially revealing of what Marx's purposes were, as is the first page of volume III.) If Marx had wanted to study pricing, he would have st