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Why Is Marxism Important In The Early 20th Century

1207 Words5 Pages

Many saw that Marxist economics catalyzed the political movements in the early 20th century but ignored the importance of Marx’s theory itself. Based upon the foundations set by the classical economists such as Ricardo, Malthus and J. S. Mill, Marx revolutionized the conceptualization of the key economic terms. He offers an overview of the mechanism of capitalism and its fate. Although some of Marx’s theories are fairly opaque, his observation of the economy adds novel innovations to the classical economics, and is still insightful in the modernity. Marxist theory of labor value, consideration of surplus value and outcome of accumulation and class struggle firmly build upon the classical economics while create Marx’s own unique school of understanding. …show more content…

He believes that the equation s/(c+v)=(s/v)/(c/v+1) showcases the falling rate of profit case. With c/v rises, the rate of profit falls because s/v must be spread over large quantity of output. Capitalists, however, would maximize the length of work day to sustain the profit. The falling rate, meanwhile, drives out productive labor and eventually remove underperforming capitalists out of the market. With an elevating concentration of the economic power from a decrease number of capitalists, monopoly is likely to appear to establish instability in the economic system. At the same time, resentment from reserved unemployment increases. The ultimate fate of capitalism, according to Marx, is a crisis. Similarly, Wolff, in his article and lecture, attributes the cause of the Global Financial Crisis to the historically established gap between the wage, productivity and working hours in the United States. Americans work “on average 20% more hours per year than workers in France, Germany and Italy.” Capitalists do not wish to pay wages; instead, they flood profitable loans to “desperate and often financially naive workers.” This type of exploitation came to an end when workers fell below subsistence level and ruined the loan mechanism. Wolff pretty much reflected upon the Marxist fate of capitalism that the exploitation harms the workers and trickles up to the capitalists. Moreover, the modern events and debates of “Occupying Wall Street” and “Tax Reform” all direct to the overly profitable higher strata of the society, specifically represented by capitalists. Robinson did correctly pointed out that Marxism “cannot be of any use without an understanding of the economic relationship within any society to which it is applied.” Marx himself, though examining the economy in Western Europe, does not restrict his philosophy to a particular region; rather, the capitalist system as a whole should be concerned. For example, the

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