A theory which assumes that the value of any good is proportional to the amount of work necessary to produce it. The difference between the market price and the value is called the surplus value. The concept that capitalists unjustly keep the surplus value is the essence of Marxism. Labour camps for capitalists were just the logical consequence of the labour theory of value. Shortages of food, clothes, housing and even toilet paper in Marxist economies were the consequence of a lack of capitalists. Note that Lenin, Stalin, Mao and Pol Pot (all of them) were ideologically anchored in the labour theory of value.
See marginal theory of value.
Marginal theory of value
If you are starving, a good sandwich has undeniable value for you. If you are still hungry, you might eat another one, but its subjective value for you would diminish. The value of the third sandwich is likely to fall significantly for most people; some would still eat it, of course, especially if they didn't have to pay for it, but the marginal value of the third sandwich drops to zero.
You are highly unlikely to eat the fourth sandwich, as its marginal value is probably going to be negative (at least for people with a normal stomach).
In contrast to the labour theory of value, marginal theory assumes that the value of things depends on your needs. Therefore, in the market economy, value is equal to the market price that you are willing to pay without coercion. This means that capitalists do not actually steal surplus value as claimed by Marx; there is therefore no need to send them to labour camps, and no need for food or clothes shortages, or indeed shortages of anything that money can buy.
See labour theory of value, market economy.
An economic system in which you can usually buy whatever you need and want, as long as you have money.
See capitalism, communism