system
Given the following post, respond as if you're commenting on Reddit:
human
CMV: The labor theory of value is flawed

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This might be an obscure topic, however, in some—largely Marxist circles— the approach seems to motivate much of the dialogue of class structure and serves as a keystone to that perspective. The conclusion is that labor in a capitalist mode of production is always and everywhere a case of exploitation. 

The standard example that is used to demonstrate the concept is that of a factory. Say that a factory produces some unit: U and is sold on the open market for, say, 100$. The sales price can be broken down into a few broad factors: material/equipment/distribution costs, labor costs, and profit. Say that the costs per item for the base cost is 60$, labor costs 30$, and profit is 10$. The LTV finds that because the worker made the 100$ item, they are entitled to 40$ in compensation. All the examples that I have seen go exactly along these lines and the 10$ of profit is the result of exploitation.

However, this doesn't seem that obvious, saying that the capitalist did anything for which he/she would be entitled seems absurd. Thus, I will propose a few factors that should explain some of the profit. 

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* Idea Value: The enterprise needed more than just inspiration. To create a successful company the capitalist would need.
   * Industry experience, to create and refine a competitive product
   * Knowledge of what the market needs
   * (Ultimately) The assuredness to risk capital on the venture.
* Capital: Diverting capital into a non-fungible forum is less preferable than in its fungible state.
* Premium from holding risks associated that go well and above what the worker takes on.
   * Bankruptcy
   * Profit margins
   * Competition
   * The general business environment

In my current opinion, this explains the vast majority of the profit gained from production. Taking on risk while also creating value seems to be fundamentally different from just plain labor and is thus compensated for in a fundamentally different way. 

Further, when applied to the facets of the entire economy, the theory breaks down even further. Trying to determine the value of professionals who are being paid to create products and services that are far less quantifiable than manufactured goods and may even be experimental and not of any current value to begin with. 

Critically, this does not eliminate exploitation or absolve terrible owners, capitalists, and the like. Awful situations are still awful, and the government is a necessary entity to keep such a system working and useful. This includes rent-seeking behavior in all its forms.

TLDR; The LTV assumes labor and only labor can create value and prematurely chalks up any deviance to exploitation.
gpt
You're missing a part of this, the capitalist also generated value, sure, but they still did so via their own labor. It was simply labor of a different kind. 

To say they deserves profits rather than a wage because their labor required experience/risk or whatever doesn't make a ton of sense. The entrepreneur should be compensated for their labor, but not in a unique way relative to other laborers. 

He should be paid for his work while gaining expertise and he should be paid for planning/starting the new enterprise. If he continues managing the enterprise, he can even continue being paid for that labor, but there's no reason he ought to get to continue making money for work which is then later being done by other workers (profits).