Seventeenth-century philosopher John Locke stated that as much as 99

Can someone help me understand how the formulators were familiar with Locke's views on the relationship between labor and the value of products making option D correct?

RC00141-07 The author of the passage implies which of the following regarding the formulators of the labor theory of value?

(A) They came from a working-class background.

(B) Their views were too radical to have popular appeal.

(C) At least one of them was a close contemporary of Locke.

(D) They were familiar with Locke's views on the relationship between labor and the value of products.

(E) They underestimated the importance of consumer goods in a modern economy.

Question 6

The author implies this familiarity in two places:

"For Locke’s intellectual heirs it was only a short step to the 'labor theory of value,' whose formulators held that 100 percent of the value of any product is generated by labor..."

Here, the author implies that the labor theory of value was formulated by Locke's intellectual heirs, i.e. the people who inherited his philosophies or teachings.

"The labor theory of value systematically disregards the productive contribution of capital goods—a failing for which Locke must bear part of the blame."

This is a less direct form of implication. But in connecting this challenge to the theory back to Locke, the author is broadly re-asserting that Locke's work has influenced the formulators of the theory.

I hope that helps!

Question 1

If you believe that the author's primary concern is to point out a limitation or a flaw in the theory, then you should eliminate choice (B).

Here's precisely what (B) says:

The word "theory" doesn't appear at all in this choice. So if we pick (B), we are saying the author's primary concern is to discount the contribution of labor itself in a modern economy.

This doesn't line up with what the author has written. The author's second paragraph clearly begins with the recognition that "human effort is required to produce goods for the consumer market," and implies that two-third of the total of output of consumers goods is attributable to labor.

The author is NOT discounting the contribution of labor. The author IS discounting the labor theory of value, and uses the second paragraph to illustrate how this theory "systematically disregards the productive contribution of capital goods."

That purpose is much more closely matched to choice (C), and so is your original determination that "he points out a limitation or a flaw in the theory."

Here's precisely what choice (D) says:

The most direct explanation is that the author never makes an effort to argue for a more equitable distribution of profits.

The author uses paragraph 1 to explain the labor theory of value, then uses paragraph 2 to illustrate a key failing of that theory (it systematically disregards the productive contribution of capital goods).

The overall purpose of these two paragraphs is to question the theory. The author only brings up distribution of profits to show that the portion of income paid out as compensation to the owners of capital goods (1/3) roughly matches the portion of output already attributable to the use of capital goods (1/3).

This is NOT an argument for "more equitable" distribution of profits. It's evidence that the distribution seems fair as it is (contrary to the labor theory of value). If anything, the labor theory of value is making a case for more equitable distribution, and the author is writing this passage in order to question the merits of that case.

I hope this helps both of you!

GMATNinja, could you please explain option E of RC00141-02 and option C (contibution to economy phrase) of RC00141-04?

Question 2 (RC00141-02) asks about which of the answer choices is true of the distribution of income in a modern economy. Here’s (E):

It is possible that workers receive a share of income greater than the value of their labor (between their income derived as wages and salaries and their compensation as shareholders, pension beneficiaries, etc.). However, nowhere does the author indicate that this is BECAUSE the labor theory of value (LTOV) overestimates the workers’ contribution to total output. (E) indicates a causal relationship between the LTOV and the fact that workers are overpaid, but the author never makes such a connection. For that reason, we can eliminate (E) for question 2.

Question 3 (RC00141-04) asks about which answer choice would most effectively counter the author’s criticism of Locke that “The labor theory of value systematically disregards the productive contribution of capital goods—a failing for which Locke must bear part of the blame.” Here’s (C):

The author argues that Locke is responsible for the fact that the LTOV ignores the contribution of capital goods, but (C) suggests that capital goods did little to contribute to the economy during Locke’s time. If that is true, then Locke did not disregard the contribution of capital goods because capital goods made no contribution. Therefore, Locke would not bear any blame for the LTOV’s failing because he could not have anticipated the future contribution of capital goods. (C) is the best choice for question 3.

I hope that helps!

Hi GMATNinja VeritasKarishma,

Can you please explain the below question? I fail to see the distinction between C & D, and that why we've chosen D over C.

Thank you!

RC00141-07 The author of the passage implies which of the following regarding the formulators of the labor theory of value?

(A) They came from a working-class background.

(B) Their views were too radical to have popular appeal.

(C) At least one of them was a close contemporary of Locke.

(D) They were familiar with Locke's views on the relationship between labor and the value of products.

(E) They underestimated the importance of consumer goods in a modern economy.

This is what is given about the formulators of the labor theory of value:

John Locke stated that as much as 99 percent of the value of any useful product can be attributed to “the effects of labor.” For Locke’s intellectual heirs it was only a short step to the “labor theory of value,” whose formulators held that 100 percent of the value of any product is generated by labor

So Locke said that 99% value was effect of labour.
The intellectual heirs, presumably some of whom formulated labor theory of value jumped from 99% to 100%.

(C) At least one of them was a close contemporary of Locke.

Not given. We don't know if any contemporary of Locke was involved. We are given that his 'intellectual heirs' were involved i.e. people with thinking similar to his and derived from his thinking.

(D) They were familiar with Locke's views on the relationship between labor and the value of products.

Correct. The formulators were his intellectual heirs i.e. they inherited his intellectual notions. They knew what his views were and their own views were just a step ahead of his.

3.Which of the following statements, if true, would most effectively counter the author's criticism of Locke at the end of the passage?

(A) Locke was unfamiliar with the labor theory of value as it was formulated by his intellectual heirs.

(B) In Locke's day, there was no possibility of ordinary workers becoming shareholders or pension beneficiaries.

(C) During Locke's lifetime, capital goods did not make a significant productive contribution to the economy.

(D) The precise statistical calculation of the productive contributions of labor and capital goods is not possible without computers.

(E) The terms “capital goods” and “consumer goods” were coined by modern economists and do not appear in Locke's writings.


Author's criticism of Locke at the end of the passage: The labor theory of value systematically disregards the productive contribution of capital goods—a failing for which Locke must bear part of the blame.

Locke disregards the productive contribution of capital goods is author's criticism of Locke. We need to counter it i.e. give a reason why he was right in ignoring the contribution of capital goods.

(A) Locke was unfamiliar with the labor theory of value as it was formulated by his intellectual heirs.

What his heirs did with his theory is besides the point. The author is saying that Locke himself ignored contribution of capital goods in his theory and that is a problem.

(B) In Locke's day, there was no possibility of ordinary workers becoming shareholders or pension beneficiaries.

Irrelevant.

(C) During Locke's lifetime, capital goods did not make a significant productive contribution to the economy.

Correct. This tells us that during Locke's time, capital goods made no significant productive contribution so it made sense that Locke ignored them. This counters the author's criticism of Locke and explains why he did what he did and why it made sense.

(D) The precise statistical calculation of the productive contributions of labor and capital goods is not possible without computers.

Doesn't matter. Just because you cannot precisely calculate, it doesn't mean you should ignore one factor.

(E) The terms “capital goods” and “consumer goods” were coined by modern economists and do not appear in Locke's writings.

Doesn't matter when the terms came into being.

Answer (C)

Hello Experts! Could someone help me understand how to properly arrive at the right answer on question #7 (The author of the passage implies which of the following regarding the formulators of the labor theory of value?)

I was able to eliminate answer choices A, B, and C, but had to wildly guess on the last two available answer choices!

7. The author of the passage implies which of the following regarding the formulators of the labor theory of value?

(A) They came from a working-class background.
(B) Their views were too radical to have popular appeal.
(C) At least one of them was a close contemporary of Locke.
(D) They were familiar with Locke's views on the relationship between labor and the value of products.
(E) They underestimated the importance of consumer goods in a modern economy.

Look at the first two sentences:

Seventeenth-century philosopher John Locke stated that as much as 99 percent of the value of any useful product can be attributed to “the effects of labor.” For Locke’s intellectual heirs it was only a short step to the “labor theory of value,” whose formulators held that 100 percent of the value of any product is generated by labor

Formulators of labor theory were Locke's intellectual heirs. This means they carried forward his ideas. Hence, we can say that they were familiar with his views. Hence (D) is correct.

As for (E), there is no discussion on importance of consumer goods. They underestimated the importance of capital goods (needed to produce consumer goods).

Hi VeritasKarishma - for q1, isnt OA: C too extreme ?

Questioning the validity was too extreme for me. Questioning the validity implies that the author completely believes this theory has been 100 % debunked (no one should touch this theory even with a ten inch pole)

I never got that impression from the passage regarding the labor theory of value

Sure, the passage criticizes the labor theory of value but it never says the labor theory of value is COMPLETELY debunked

1. The author of the passage is primarily concerned with

(A) criticizing Locke's economic theories
(B) discounting the contribution of labor in a modern economy
(C) questioning the validity of the labor theory of value
(D) arguing for a more equitable distribution of business profits
(E) contending that employers are overcompensated for capital goods

The passage says:
The labor theory of value systematically disregards the productive contribution of capital goods—a failing for which Locke must bear part of the blame.

It is written to highlight a failing of the labor theory of value. Labour theory says that 100% value is generated by labour. Passage says that 100% of the value is not generated by labour. Hence it questions the validity of labour theory.
The question of completely debunked or partially debunked does not arise.
In any case, is there any other option that makes better sense? If not, then the point is moot. Even synonyms have different usage and our understanding of what works where might vary from person to person. Hence, verbal questions look for the most suitable of the options given, not what we think is the perfect answer.

VeritasKarishma - thank you so much for responding.

Analogy of what I was saying:

If I was to criticise your responses on GMATclub (your responses never take into account X and Y) -- does that mean i am "questioning" the validity of your responses ? I dont believe I am.

Your responses maybe an issue for me but for other GMATClub members, perhaps your responses are very good.

Questioning the validity implies karishma's responses are NO good / NO use to ANY ONE on the forum

Same thing here : for the author, John Locke's theory may be no good but unless OTHER people also agree with the author -- Questioning the validity is a bit too extreme

Regarding any other option - I do agree, there is no alternative.

Thoughts ?

When a theory says, "100% value comes from labour" and you say, "100% value does not come from labour (which is effectively what the passage is saying)", you are saying that the theory is not correct. You are questioning the validity of the theory. Just because the passage doesn't explicitly state that the theory is wrong, it doesn't mean it is not implied. Saying that the theory ignores certain factors which bring value (and hence 100% does not belong to labour) is just a polite way of saying that it is not correct.

RC00141-07
7. The author of the passage implies which of the following regarding the formulators of the labor theory of value?

(A) They came from a working-class background.
(B) Their views were too radical to have popular appeal.
(C) At least one of them was a close contemporary of Locke.
(D) They were familiar with Locke's views on the relationship between labor and the value of products.
(E) They underestimated the importance of consumer goods in a modern economy.

VeritasKarishma nightblade354 Please help me with this question.

Hi HarshaBujji,

Please refer the explanation by expert for Question 7 here:

https://gmatclub.com/forum/seventeenth-century-philosopher-john-locke-stated-that-as-much-as-190904-40.html#p2837070

Let us know if you still have doubts.
Thanks.

3. Which of the following arguments would a proponent of the labor theory of value, as it is presented in the first paragraph, be most likely to use in response to the statement that “The labor theory of value systematically disregards the productive contribution of capital goods”?

(A) The productive contributions of workers and capital goods cannot be compared because the productive life span of capital goods is longer than that of workers.
(B) The author’s analysis of the distribution of income is misleading because only a small percentage of workers are also shareholders.
(C) Capital goods are valuable only insofar as they contribute directly to the production of consumer goods.
(D) The productive contribution of capital goods must be discounted because capital goods require maintenance.
(E) The productive contribution of capital goods must be attributed to labor because capital goods are themselves products of labor.

I got this one wrong. I was stuck between D & E - my thought process for elimintaing E was -
Let's say a consumer goods company produces corbonated-water and they have an equipment for bottling and all. Now the company will only pay wages to the workers on it's own payroll and it's highly unlikely that a cold-drink manufacturer will have workers with technical expertise who could have built a bottling machine, hence the machine came was outsourced and it is obvious that they will not pay wages to the workers of that other company which manufactured the machine. So even though the machine was product of labour the owner is not going to pay wages for it whereas, in D - maintenance is a part and parcel of assembly line workers' schedule. If a machine requires high maintenance then the staff needs to paid in a linear manner - which could offset the value created by the machine.

GMATNinja Nikhil @Nightblade can you please point out the flaw in my reasoning?