MOST VALUABLE ECONOMIC LESSONS FROM KARL MARX
Economic change is the key to social change. In "The Communist Manifesto" released in 1848, Karl Marx highlighted how economic progression leads to changes among social classes, and such changes often lead to struggle for political power.
In economics, two aspects are often disregarded or overlooked: emotions and politics underneath. Later on, French economist Thomas Piketty made a corollary argument. He said income inequality could result in a blowback against capitalism among people. Also, in any economic system, there is an anthropology and morality are taken into consideration.
Capitalism is the most effective economic system. Trust the late German philosopher to enumerate reasons for objecting capitalism. Still, he recognized the fact this economic system is much productive than other systems. For him, all nations should implement a capitalist system and develop a formative capacity so that workers would turn to communism. In his 1867 book "Capital", capitalist production combines numerous phases, including designing new technologies, to make it into a social whole.
A 2003 report by the Federal Reserve Bank of Minneapolis backed Marx’s claim, saying productivity and per capita income worldwide never expanded enormously until the latter part of 18th century when the United Kingdom first introduced pro-free market policies.
Labor theory of value cannot expound on profits. This theory explains the value of a product or service depends on the number of hours rendered to manufacture that product or service. Let’s put it this way: if a computer table is created two hours longer than a study table, the computer table should be twice as valuable.
The revolutionary socialist, in one of his publications, challenged the laissez-faire economists, stipulating how capitalists generate considerable profits granted the products and services are sold at their real labor value gauged in working hours. He also said companies are exploiting its laborers by overworking and/or underpaying in order to lower the production cost. Later on, some economists later overturned Marx’s argument. But it was good enough to emphasize the frailness of the economy.
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