1. What?
1.1. One of social system production & distribution goods owned by small minority of people.
1.2. Commodity
1.2.1. Two necessary cond: -Existence of market -Social motivation for exchange
1.2.2. Two stage of arguments (BY MARX) -1- argue 2 obj. can be compared in the sense of being. (MUST HAVE 3rd THINGS) -2- argue which is a search for the appropriate 3rd thing- MARX VIEW
1.3. Labour Theory
1.3.1. Value asserts that the value of a commudity. DETERMINED BY: #Quantity socially necesslabour time required!
2. DISTINTIVE
2.1. Marx Argument : Capitalism not only the exchange of commodities. Advancement of capital. (can from money) -Transformation of capital can command higher price & make profit.
2.2. Marx Solution: Idea of exploitation of the worker. -Purchase the worker labor power.
2.3. Marx Theory about worker: -Known as surplrs labor -Producing surplus value for capitalist
2.3.1. Labour power is the only commodity which can produce more value than it is worth. (VARIABLE CAPITAL)
3. Analysis of idea commodity production
3.1. What?
3.1.1. Commodity= as a useful external object produced for exchange on a market. -existence of a market -social division of labour
3.2. Marx Suggest
3.2.1. 1. Commodities have both value.
3.2.1.1. Labour Theory of value asserts: -The value of a commodity is determined by the quantity of socially necessary labour time required to produce it.
3.2.1.2. The Surplus value theory of profit: -labour power is the only commodity which can produce more value that it is worth & for this reason, it is known as variable capital.
3.3. Capital Volume 3:
3.3.1. MARX SAID
3.3.1.1. "Make the prediction the rate of profit will fall over time & this is one of the factor which leads to the downfall of capitalism"
3.3.1.2. "Labour intensive industries ought to have a higher rate of profit than those which leads to the downfall of capitalism"
3.3.1.3. "We should recall that the labour theory of value was initially motivated as an intuitively plausible theory of price"
3.3.1.4. "Only labour can create surplus value"
3.3.2. Marx REFUSE to (accept) that capitalism involve a harmony of interest between worker & capitalist, replacing this with a class based analysis of the workers' struggle for better wages & condition of work.
3.3.3. Marx denial that there is any long run tendancy to equlibrium in the market & his description of mechanism which underlie the trade-cycle of boom & bust.
4. How?
4.1. Class Division
4.1.1. Capitalist Class (minority): -distributed good -gained profit -reinvesting for another accumulation of wealth
4.1.2. Working Class (majority): -must sell ability to work -gained wage and salary
4.2. 1. Capitalistic country -allows entreprenuership 2. Large global exporter -germany and us 3. Development of its human capital -to produce goods for export
5. Country
5.1. Germany
5.1.1. #Support allowing local entreprenuer to develop and initiate new industry. #Flow of good exported are grouped into sector. #made it priority to train it labor force to suceed in various inustries.
5.2. India
5.2.1. -was previously practicing a mixed economy system (socialist+capitalism) -beginning to realize its potential economically as a capitalist country. -why? as it struggles to overcome an outdated caste system besides having a problem with its distribution of income and access to free markets (as many are poor and have no way out of poverty)
6. Who?
6.1. Karl Marx
6.1.1. Argued that in real economic life prices vary in a systematic way from values.
6.1.2. Provide math to explain (transformation prob)
6.1.3. Attempt suffers from technical difficulties.
6.1.4. Labour theory of value initially motivated as an intuitively plausible theory of price.
6.1.5. Labour responsible for the creation of value.
6.1.6. Profit in the consequences of exploitation, remain, intuitively powerful.
6.1.7. CAMBRIDGE ECONOMISTS (2 aspects)
6.1.8. Marx's refusal to accept the capitalism involves a harmony of interest between workers & capitalist.
6.1.9. Marx's denial that there is any long run tendency to equilibrium in the market.
6.1.10. Marx's assertion only labour.