Test 2 Flashcards
Original factors of production
1) Natural Resources
2) Labor
3) Time
Labor Theory of Value
The ultimate source of all value comes from the amount of work put in
Argument against “Labor Theory of Value”
- Those who are saving (accumulating capital goods) contribute their share to the outcome of Economic processes
- They are consuming less than their share of the goods produced
Iron Law of Wages
As wages INCREASE, population INCREASES, causing RISE in shortages. We live near subsistence level wages.
Hegelian Dialectics
Conflict btwn Thesis and Antithesis → Synthesis (new antithesis) → New Thesis → Conflict → Synthesis → …until communism. Humanity is evolving towards communism.
Communist Thinking/Values
1) Think of International Affairs
2) Interest in the movement as a whole (all proletariat)
3) Want to get rid of “exploitation” & private property
Why does Central Planning never work?
1) Incentives Argument (Aristotle) - “Human Nature”
2) Knowledge Argument (Hayer) - We don’t have enough information to plan
3) Calculation Argument (Mises) - We still can’t solve the problem
Criticism of Marx
Everything hinges on class yet he never defines it Marx is in conflict with himself...He isn't a proletariat yet he is encouraging those that belong in the class to overthrow the bourgeois
Who was Trofim Lysenko?
Was the Soviet Union scientist from 1948-1964. Thought genetics was “bourgeois”
Why are Labor Unions bad for the economy?
They cause a surplus of Labor. Unions do not work for all workers, they work for union members.
Savings formula
Savings → Investment → Cap’l accumulation → Inc. in Production → More stuff → Higher standard of living
When was the Communist Manifesto Written? Who wrote it?
Karl Marx in 1848
Believed:
“All of history is defined by class struggles”
“Capital is a social power”
Movement of Scientific Socialism (Hegel)
Friedrich Hegel (Philosopher)
- How individuals grow and change
- Hegelian Dialectics
