Basically, the labor-theory of value refers to money... we, economically-speaking,we value money and money is supposed to represent work or labor. I do so much work, you do so much work, and we can trade the products of each other's respective works. That's the basis for simple bartering. When money comes into play, we are still bartering, we just have a universal mechanism for barter namely the dollar, or the euro, or what have you. But the dollar, or whatever, is supposed to be backed up by labor... not gold, not the decrees of some governmental body. If everyone in the country just decided to stop working. The economy would come to a stand still. No ifs ands or buts... okay... maybe automated parts of the economy would still run, but I'll get to that later. Essentially, this is the reason a strike works. A single man can not perform all the labor required in the running of Microsoft. Yet who benefits the most from the running of Microsoft? Bill Gates. One man. Look at it another way. If money represents labor. Suppose over the course of my entire life, I make 1 million dollars, and someone like Bill Gates makes 10 billion dollars (I have no idea how much Bill Gates actually has, it's probably more.). That's 10,000 times as much money. Is it reasonable to think that he put in 10,000 times as many hours of labor at his job than I did at mine. (There is more going on here, though, than just raw labor. See my problems page for a further discussion). Could 10,000 individuals such as myself, fill the role of one Bill Gates?
At the heart of the problem is a conflict between the labor theory of value and what I shall call the purchase theory of ownership. (Don't we just like all these neat theories?) For more on this see my purchase_theory page.
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