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I'm not a Marxist and don't see any problem here. Unfree labour still has costs. You still have to obtain your slave labour, feed them, protect them from dying from exposure and disease, prevent them escaping. Surely Marx would agree, if asked, that a labour camp produces surplus value?
Anyway, how can machines not produce value under Marxism? We're all agreed that a steel mill's productivity has a lot to do with the tools and machinery they have available to them. So obviously the machinery produces value. Marx had experienced industry, he knew machines existed... How could he have missed this? How could anyone have missed this?
The real problem is that labour doesn't have a relation to quantity or quality. If I have a really disorganized factory with stupid, clumsy employees, there's lots of labour but little output. The crappy output doesn't become more valuable because people worked hard. That, I believe, is what goes against LTV.
Anyway, Marx was not a Marxist. Confusingly, he was Marxian. I believe there's a quote where Marx says he's not Marxist. And he's certainly not Marxist-Leninist, they're wildly different ideas thrown together.
The fact that an idea is stupid does not mean that someone as intelligent as Marx could not have agreed with it. Kant believed that you can know a priori the geometry of space and Popper thought that evolution theory was not scientific.
If machines do produce value, then the capitalist isn't stealing from the proletarian, they are producing wealth together. There is no exploitation and the ethical side of marxism falls entirely.
This I think is another point of view that is problematic for Marxists but also for other people: namely that capital is literally a tool for capitalists to produce value. In the same way hammer and sickle is a tool for worker/farmer to produce goods, Tesla, Inc. is just a tool for Elon Musk to produce cars. Famer does not necessary have to make the sickle from iron ore and a tree, he has to rely on other workers and their capital producing it. In this sense the capitalist is just more complex type of worker.
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