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MARX, KARL. ECONOMIC CONCEPTS.
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Micro & macro examination of major economic concepts of Marx. Classical theory, value, social processes, advantages & disadvantages.... More...
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Paper Abstract:
Micro & macro examination of major economic concepts of Marx. Classical theory, value, social processes, advantages & disadvantages.

Paper Introduction:
INTRODUCTION This research examines the Marxist economic system. In this examination, the interrelation between micro and macro economics is considered. Modern economics is divided into the two major areas of macroeconomics and microeconomics. The difference between the two branches of economics lies in the level of aggregation at which economic phenomena are studied. Macroeconomics is primarily concerned with the study of relationships between broad economic aggregates, such as (1) national income, (2) aggregate saving and investment, (3) the quantity of money, (4) employment, (5) consumer spending, and (6) many other high level aggregations (Rees, 1984). Microeconomics, by contrast, is concerned with the study of individual decision units(1) consumers, (2) households, and (3)

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In centrally planned economies, microeconomics tends to besubordinated to macro-economic concerns. TheAmerican orientation led Milton Friedman to state that the only socialresponsibility of American business is to make a profit for its owners(Friedman, 197 ). Friedman, M. Marx brought four major insights toeconomic thought through his theories. (1953). In order to insure an adherence to Marxist values, Marxist economicsystems have, at least in the past, relied the central control anddevelopment of economic goals, plans, and the implementation of thoseplans. The Marx-Engels reader, second edition.New York: W. Further, this theoryis unable to provide a satisfactory explanation between the value and therelative price of a product. The difference between the two branchesof economics lies in the level of aggregation at which economic phenomenaare studied. A second major insight brought to economic thought by Marx was thatvalue and growth was not inextricably associated with agricultural activity(Tucker, 1978). Chicago: Universityof Chicago Press. Martin'sPress. The structure of classical economic theory.London: Oxford University Press. G. Hausman. Somewhat contradictorily, however, Americans tend toequate capitalism with democracy with an almost religious fervor (Schotter,1985). The development of Keynesian economic theory represented anevolutionary movement from classical and neoclassical economics. In some fariness, it must be admitted thatevolutionary to Marx meant a move from feudalism to capitalism, atransition from capitalism to socialism, and on down the line.Evolutionary development, however, may be (and usually is) much lessdramatic. CONCLUSION Marxian economic thought is theoretically close to classicaleconomics. References Eagly, R. Welfare economics, third edition. Marx contended that the exchange value paid by capitalists for laborwas less than the use value of labor obtained by capitalists. The first was that an economy wasnot characterized by static equilibrium (Eagly, 1974). (1984). This same insightlater led Keynes to an understanding that policies based upon classicaleconomic theory would not necessarily extricate the world's industrialeconomies from the depression of the early 193 s (Hansen, 1953). Keynes, J. Sassone, P. The major deficiency in Marxian economic theory is the contention thatthe quantity of labor used in the manufacture of a product determines thevalue of that product, and that such a value determination is bothfundamental and immutable. Such has been the case in Marxisteconomies, until the more recent policy shifts in the Peoples Republic ofChina (which were initiated in the late-197 s), and in the Soviet Union(which were initiated in the mid-198 s). MARXIST ECONOMICS Marxian economic thought is theoretically close to classicaleconomics. (197 ). In order to insure an adherence to Marxist values, Marxist economicsystems have, at least in the past, relied the central control anddevelopment of economic goals, plans, and the implementation of thoseplans. Hausman, D. (1985). Rees, R. The goal of positive economics isto describe and predict what has happened or will happen in the presence ofspecific conditions, regardless of the values involved. Free market economics. A history of Economic theory, third edition.Harmondsworth, England: Penguin. The third major insight brought to economic thought by Marxwas his conception of economics as an evolutionary process. Hansen, A. Microeconomics, by contrast, is concerned with the study of individualdecision units--(1) consumers, (2) households, and (3) firms, and with theways in which their decisions interrelate to determine (4) the relativeprices of goods and factors of production, and (5) the quantities of theseitems which will be bought and sold (Rees, 1984). Indeed, normative economictheories vary widely, depending upon the values held by the economistsformulating such theories. Marx contended that the exchange value paid by capitalists for laborwas less than the use value of labor obtained by capitalists. M. Classical economics, after all, was the economics of the age inwhich Marx developed his own theories. INTRODUCTION This research examines the Marxist economic system. (1974). Schotter, A. (1953). The first was that an economy was not characterized bystatic equilibrium. By contrast, normative economics deals withthe development of the criteria by which resource allocation decisions,together with the methods employed in their making, should be assessed(Sassone, 1986). Such has been the case in Marxisteconomies, until the more recent policy shifts in the Peoples Republic ofChina (which were initiated in the late-197 s), and in the Soviet Union(which were initiated in the mid-198 s). In thisexamination, the interrelation between micro and macro economics isconsidered. Ed. (1917). Introduction. New York: St. In the past,at least, outcomes have not been considered as important as has adherenceto Marxist values. Perestroika in the Soviet Unionholds a strong potential to provide a greater role to microeconomic in themarxist economy of that country. Further, this theoryis unable to provide a satisfactory explanation between the value and therelative price of a product. Tucker, R. New York: McGraw-Hill. Marx demonstrated that labor created value, andfostered economic growth in activities other than those associated withagriculture. W. A guide to Keynes. The third major insight brought to economic thought by Marx was hisconception of economics as an evolutionary process (Hausman, 1984). H. Macroeconomics is primarily concerned with the study ofrelationships between broad economic aggregates, such as (1) nationalincome, (2) aggregate saving and investment, (3) the quantity of money, (4)employment, (5) consumer spending, and (6) many other high levelaggregations (Rees, 1984). Marx brought four major insights to economic thought throughhis theories. Positive economics, in contrast with normativeeconomics, is in theory, value neutral. New York: McGraw-Hill. Nevertheless, it is important to recognize the evolutionarycharacter of the development of economic theory. A second major insight brought to economic thought byMarx was that value and growth was not inextricably associated withagricultural activity. Marxist economic policy is heavily dependent upon normative values.Thus, in the past, at least, outcomes have not been considered as importantas has adherence to Marxist values. In principle,positive economics is independent of any particular ethical position ornormative value (Keynes, 1917). Marxian economic theory is based on adistinction between the exchange and use value of labor. Positiveeconomics deals with the explanation and prediction of actual resourceallocation decisions made by consumers, producers, and, to a lesser extent,governments (Friedman, 1953). Thus, according to Marx, only labor can create asurplus value, or profit. (1984). N. D. The scope and method of political economy,fourth edition. This theory fails to account for thecontribution to value of other factors of production. (1986). Thus, according to Marx, only labor can create asurplus value, or profit. Essays in positive economics. Capitalism and Freedom. Chicago:University of Chicago Press. Thedifference between exchange and use values of labor was a surplus value,according to Marx. V. In centrally planned economies, microeconomics tends to besubordinated to macro-economic concerns. Marxist economic theory is also characterized by a greater normativecontext than is free-market economic theory. The philosophy of economics.Ed. C. This theory fails to account for thecontribution to value of other factors of production. Marx demonstrated that labor created value, and fosteredeconomic growth in activities other than those associated with agriculture. Marxian theory is based on a distinctionbetween the exchange and use value of labor. London: Macmillan. The last of the major insights brought to economic thought by Marx wasthe concept of economics as a part of broader societal processes.Strangely, this concept is often opposed in the United States. Normative economics is value oriented. Cambridge, England: Cambridge University Press. The ultimate goal ofmicroeconomics is to explain the mechanism by which the total amount ofresources possessed by a society is allocated among alternative uses andusers, and competing uses and users. M. Economics is often subdividedinto the areas of positive economics and normative economics. Marxisteconomic policy is heavily dependent upon normative values. Asimportant as this insight is, it still has not been widely accepted, or, atleast, widely practiced. A majorproblem with most economists who became Keynesians, however, was that theytended to view Keynesian economic theory as the end of the line, as opposedto a step in the evolutionary development of economic thought. Friedman, M. Norton.----------------------- 7 (1978). The major deficiency in Marxian economic theory is the contention thatthe quantity of labor used in the manufacture of a product determines thevalue of that product, and that such a value determination is bothfundamental and immutable. Thedifference between exchange and use values of labor was a surplus value,according to Marx. Modern economics is divided into the two major areas ofmacroeconomics and microeconomics. The last ofthe major insights brought to economic thought by Marx was the concept ofeconomics as a part of broader societal processes.

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