Dezhao Chen  Week 6 Discussion COLLAPSE Top of Form Q1. Given the similarities and differences of three contending theories (Marxism, Neoclassical and Keynesianism) that you have learned in the class, briefly analyze the key factors that contributed to the decline of economic systems under Marxism in the late 20th century in the countries of Eastern Europe and East Asia. Give specific examples as part of your answers The Marxist theory’s most fundamental principle is that it, ‘… sought to transform capitalist Europe into a cooperative commonwealth of freethinkers, and often called “socialism” or “communism.” (p. 135). The theory was that everyone would work for the better good of the state and others. The major pillars of Marxism and production are culture, politics and the natural climate. Marxism created tension in these three spheres as Wolff and Resnick (2012) say, This in turn implies that the economy is always in a state of tension and change. A change in climate will favor some kinds of production and distribution and inhibit others. Changing political trends will favor and inhibit certain kinds of production and distribution. Changing cultural patterns too will stimulate some kinds of production and distribution and stifle others. (p. 144) Besides the tension in the three spheres, another reason why Marxism collapsed especially in Russia is due to mismanagement and corruption. Marxism states that the fundamental power is to be given to workers and overproduction is supposed to benefit them. However this was not the case in Russia whereby greedy heads of government took over the benefits that came with the laborer’s work. Q2. In understanding the process of rapid transformation of economic systems in many nations in the world from the beginning of 1990s, briefly explain why freedom to choose the right theoretical foundations still do matter to develop an appropriate economic system for economic growth and better income distribution of a society. The freedom to choose the right theoretical foundations to follow as a nation whether neoclassic, Marxism or Keynesian theory is fundamental because it affects how people in the country see the world. For example Americans who live in a capitalist society view the world differently to Russians who are socialists and communists. Wolff and Resnick (2012) say that, It follows that individuals will likely act differently depending on which theory they use in thinking about the economic aspects of their lives and social surroundings. As with theories people use to understand other objects of interest. to them (love, nature, politics, etc.), economic theories have conscious and unconscious effects on how people think and act. (p. 348) Due to the fact that the economic system that the people of a country will choose will affect their lives, they should be the ones to develop an economic system that they feel will be of most benefit to them. References Wolff, R. D., & Resnick, S. A. (2012). Contendi ...

1. Dezhao Chen
Week 6 Discussion
COLLAPSE
Top of Form
Q1. Given the similarities and differences of three contending
theories (Marxism, Neoclassical and Keynesianism) that you
have learned in the class, briefly analyze the key factors that
contributed to the decline of economic systems under Marxism
in the late 20th century in the countries of Eastern Europe and
East Asia. Give specific examples as part of your answers
The Marxist theory’s most fundamental principle is that it, ‘…
sought to transform capitalist Europe into a cooperative
commonwealth of freethinkers, and often called “socialism” or
“communism.” (p. 135). The theory was that everyone would
work for the better good of the state and others. The major
pillars of Marxism and production are culture, politics and the
natural climate. Marxism created tension in these three spheres
as Wolff and Resnick (2012) say,
This in turn implies that the economy is always in a state of
tension and change. A change in climate will favor some kinds
of production and distribution and inhibit others. Changing
political trends will favor and inhibit certain kinds of
production and distribution. Changing cultural patterns too will
stimulate some kinds of production and distribution and stifle
others. (p. 144)
Besides the tension in the three spheres, another reason why
Marxism collapsed especially in Russia is due to
mismanagement and corruption. Marxism states that the
fundamental power is to be given to workers and overproduction
is supposed to benefit them. However this was not the case in
Russia whereby greedy heads of government took over the
benefits that came with the laborer’s work.
Q2. In understanding the process of rapid transformation of
economic systems in many nations in the world from the

2. beginning of 1990s, briefly explain why freedom to choose the
right theoretical foundations still do matter to develop
an appropriate economic system for economic growth and better
income distribution of a society.
The freedom to choose the right theoretical foundations to
follow as a nation whether neoclassic, Marxism or Keynesian
theory is fundamental because it affects how people in the
country see the world. For example Americans who live in a
capitalist society view the world differently to Russians who are
socialists and communists. Wolff and Resnick (2012) say that,
It follows that individuals will likely act differently depending
on which theory they use in thinking about the economic aspects
of their lives and social surroundings. As with theories people
use to understand other objects of interest. to them (love,
nature, politics, etc.), economic theories have conscious and
unconscious effects on how people think and act. (p. 348)
Due to the fact that the economic system that the people of a
country will choose will affect their lives, they should be the
ones to develop an economic system that they feel will be of
most benefit to them.
References
Wolff, R. D., & Resnick, S. A. (2012). Contending Economic
Theories: Neoclassical, Keynesian, and Marxian (The MIT
Press). The MIT Press.
Bottom of Form
Weini Gu
Wk6
COLLAPSE
Top of Form
Q1. Given the similarities and differences of three contending
theories (Marxism, Neoclassical and Keynesianism) that you

3. have learned in the class, briefly analyze the key factors that
contributed the decline of economic systems under Marxism in
late 20th century in the countries of Eastern Europe and East
Asia. Give specific examples as part of your answers.
Economic systems under Marxism in late 20th century was
developed and generated under the background of post war
period and this would lead to a continuation of the war time
practice in this time. During war time, Marxism work perfectly
as people are fighting and working together to protect their
nations and produce materials and supplies for war. The
production and operation mode are generated under the war and
reform time where the society is going through major changes
and challenges from outside threats. Yet, with the increasing
economic development after war, the inner drive to push the
socialism in these countries begin to die away as people would
start to think about their own interest and profits at this time.
They would gradually not be satisfied with what is given and
distributed from the nation. The feature of low efficienc y and
absolute fairness are all the weak points of what Marxism
brought to countries of Eastern Europe and East Asia during
that time and eventually led to the decline of Marxism at that
time.
Q2. In understanding the process of rapid transformation of
economic systems in many nations in the world from the
beginning of 1990s, briefly explain why freedom to choose the
right theoretical foundations still do matter to develop an
appropriate economic system for economic growth and better
income distribution of a society.
The freedom to choose the right theoretical foundations does
matter to develop an appropriate economic system for economic
growth and better income distribution of a society. For example,
in the United States, where people was originally fighting for
their independence and their ownership to their property in the

4. War of Independence, this is why later on the US economic
system is build on capitalism. They value private ownership and
related property rights to every citizen. A private property
system gives individuals the exclusive right to use their
resources as they see fit. That dominion over what is theirs
leads property users to take full account of all the benefits and
costs of employing those resources in a particular manner
(Powell, 2003). The historical background and economic goals
of different countries may attribute a lot to what is the best
economic and political system for the country. The majority of
people in US are pursuing what capitalism value for, the
privatization of property and individual property rights.
Reference
Powell, B. (2003). Private Property Rights, Economic Freedom,
and Well Being. Retrieved from
website: https://www.mercatus.org/system/files/Private-
Property-Rights-Economic-Freedom-and-Well-Being.pdf
Bottom of Form