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Utopians and Marx
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- 2. Outline Robert Owens Contributions to Economics Contribution of Saint-Simon, Fourier, and Mill Discussion on Marx Marx’s Key Theories and Laws of Motion Marx’s Contributions and Analytical Flaws
- 3. Significance of RobertOwen Class Discussion: What is meant by Utopia? Describe New Lanark and its purpose. Why was it so popular and to whom did it appeal? Why did it fail? What was the labor movement that Owen was involved in and what was its purpose? Small Groups: What was Robert Owen’s plan to end poverty? Describe his theories and plans for the Villages of Cooperation. Is it possible to end poverty? What is the difference between poverty then and poverty now?
- 4. Contributions of otherUtopians Class Discussion: What were Henri Saint-Simon’s contributions to the study of economics? Small Groups: Diagram the way Charles Fourier believed the world should be organized. Label the diagram with descriptions. What were Fourier’s Theories? Small Groups: Each group provides a “report” Premise of Mill’s Book Principles of Political Economy Views on the importance of nature to production His belief in benign socialism and views on capitalism.
- 5. Karl Marx Small Groups Why did Marx think communism would solve the ills of society? Why does Marx’s view both appeal and repulse so many people? Why does it seem a common ground does not exist? Class Discussion: Marx had no plan for after the revolution. Why did he think socialism would be the transition? How would that lead to “pure” communism.
- 6. Key Theories ofMarx Labor Theory of Value Labor Time determines the ABSOLUTE value of goods an services Surplus Value of Labor occurs when a worker produces more in a day than his daily wage is worth. Theory of Exploitation Labor Power: ability to work and produce commodities Labor Time: actual process and time of work If labor power ( productivity) increased, labor time decreases and so would the value of Labor Power.
- 7. Marx’s Laws ofMotion 1. As the economy expands, profits fall, both within the business cycle and outside it. 2. As profits fall, business seeks new survival techniques by innovating, inventing, and experimenting. 3. Business runs in cycles of depression and boom 4. Huge firms dominate the business scene and suppress smaller firms. 5. The working class overcomes factory owners and capitalism disappears.
- 8. Contributions He was important to discovering a suitable theory of value in economics First to note business cycles are normal in capitalist economies He predicted the growth of large-scale enterprise and monopoly power He highlighted the substitution effect as it applies to labor saving capital. He emphasized economics as needing dynamic analysis
- 9. Analytical Flaws Labor Theory of Value: Labor is not the sole source of exchange value, land and capital are also productive and their owners should get some return. Theory of Exploitation: He assumes that since wages were pegged at subsistence level, there would be “an army” of unemployed. Large unemployment is an exception in capitalistic societies. Employers must compete with one another to get workers which raises wages and improve working conditions. Capital Accumulation: Marx believed that capital accumulation would cause profit to fall. While true in theory, if capital grows faster than labor. However, technological improvements have improved productivity of capital Class Conflict: Instead of two polarized social classes, a strong middle class developed in most advanced nations Where class conflict arose (Russia & China), there was a severe lack of capital