Karl Marx is the one of the greatest economist thinker of the period of 18 century. Marx was influenced by his environment. The economic and political conditions of Germany mainly shaped his ideas. During his life time he had seen the economic development of three countries, Germany, France and England. He was also inspired by utilitarianism, socialism and and German radicalism.
The Economic Idea of Marx
Marx told many point about economic development which was centralised on labour .Which is following.
- Class struggle- Marx said that in the society there are two class one is master and other is slave. There are conflict between the master and slaves in ancient times, under feudalism there was the struggle between the lord and serf. Now under modern capitalism, the struggle is between the capitalists and workers. Due to this exploitation increases and after the natural resource come under society and it effect welfare gain the people.
- Money- Marx in his theory of money mentioned three important function of money, namely, measure of value,standard of price and means of payment. Marks believed that total quantity of money during a given period was determined by two factors-(a) The sum of prices of commodities in circulation and (b) The rapidity with which goods changed their forms.
- Division of Labour- Marx explained in detail the concept of division of labour in manufacture and pointed out that how in manufacture, a commodity from being a product of an independent workman became a social product, which was the result of the co-operation of so many workers. The Marx distinguished between division of labour in manufacture and the division of labour in society or social division of labour. The division of labour in society was created by the sale and purchase of products of different kinds of industry. In the case of division of labour in manufacture, several workers sold their purchasing power to a single capitalist. So the means of production were dispersed among many producer.
- Theory of surplus value- According to him, surplus value is the difference between the selling price of the commodity and the actual wages paid to the labourer. Due to this capitalist always want to make surplus value and it determined the wage in the variable capital of production. Only variable capital determined the labourer wages.
- Capital accumulation- According to Marx capital accumulation is total value of capitalist is the sum of constant value, variable value and surplus value Total value =C+V+S
- The Rate of Profit- It is equal to the ratio product of profit plus capital and surplus value.
7. Reserve Army - Reserve army is the capital equipment it is for production .
On this basis we easily say that time he give a great model and thought,
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The countries like India, Egypt, Burma and Ghana have followed the Marxian Departmental scheme in their development plans. The basic strategy has been to increase investments in capital goods industries and services, and to increase the supply of consumer goods by increasing investment and production in agriculture and small scale sector.
ReplyDeleteThe primary aim is to create larger employment opportunities to increase purchasing power and fresh demand, to build strong capital base and increase productive and technical capacities within the economy. The greatest lesson which the planners of underdeveloped countries can learn from Marxian economics is that accelerated development means complete reorganization of the economy both technologically and structurally.
Marx's understanding that a capitalist market economy was not an automatically self-regulating system; rather, it periodically entered periods of self-generated breakdown. Marx called these periods "crises"; today, we use a gentler term, "recessions". The most recent of these, beginning in 2007-08, deserves the older sobriquet, in view of its severity, persistence and global impact.
This is not to imply that Marx was the only thinker to question the automatic self-regulation of a capitalist economy, or even the most prescient. He was part of a dissenting economic tradition that begins with Sismondi and continues with some detours, through John Maynard Keynes and Hyman Minsky, to Joseph Stiglitz and Paul Krugman. For specific policy suggestions, the more recent figures might be more helpful. But Marx's insights of the 19th century still offer interesting ways to think about the 21st.
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