Term
|
Definition
the continual change in the form of the division of labor in human societies. This is basically the idea that human nature is changeable. Thus, the state our society is in right now is the result of the everyday struggle with existence.
Marx |
|
|
Term
|
Definition
building off of Ricardo, Marx conceptualizes the idea of how a surplus exists in a capitalist society. His idea explains that this surplus is the result of the value of labor power that exists in a commodity. His theory also takes into account the value of machinery (capitol)
Marx |
|
|
Term
|
Definition
the idea that labor can be purchased for cheaper than the value it creates; thus making it profitable.Labor Power in use is labor itself.
Marx |
|
|
Term
| Money Expression of Value |
|
Definition
expresses the amount of time used in production
Marx |
|
|
Term
|
Definition
How much does it cost to buy an hour of labor? When workers consume their wages via purchasing, they are consuming labor power. The value of the labor power is the value of the means of subsistence necessary for the maintenance of the laborer.
Marx |
|
|
Term
|
Definition
(C+V+S) in the equation value = constant capital + variable capital + surplus value
Marx |
|
|
Term
|
Definition
deals with materialism; The tendency to attribute to commodities (including money) a power that really inheres only in the labor expended to create commodities
Marx |
|
|
Term
|
Definition
pools of potential labor; absorbs unemployed works in periods of slack and provide supplies of labor in periods of high demand
Marx |
|
|
Term
|
Definition
| Primitive accumulation is the process by which precapitalist modes of production, such as feudalism and chattel slavery, are transformed into the capitalist mode of production. a process by which large swaths of the population are violently divorced from their traditional means of self-sufficiency. This process, unlike the bloodless version told by classical political economists, was one where common lands were closed to those peasants who used them: MARX |
|
|
Term
|
Definition
an object outside us, a thing that, by its properties, satisfies some sort of human want or another
Marx |
|
|
Term
| Marx’s Circuit of Commodity |
|
Definition
C – M – C
C= commodity, M= money. Exchange one commodity for money, which you use to purchase a second commodity.
M – C – M’
M= money for labor power + raw materials + intermediate goods, C= commodity, and M’= the use of commodities to produce new commodities which are sold for a revenue.
M’ > M. Labor power adds value to commodities.
Marx |
|
|
Term
|
Definition
| neoclassical economists; saw themselves as a continuation of the classicalists; major difference; took into account the theory of demand when determining price. Also dealt with Marginal Utility |
|
|
Term
|
Definition
| explains the idea of (Jevons) marginal utility and how price is affected by the situation. |
|
|
Term
| St. Petersburg Paradox: heads/tails game. |
|
Definition
| (Bernoulli) Infinite expected value of the game, but there is a diminishing marginal utility. With every gain there is a smaller increase in utility. |
|
|
Term
|
Definition
| everyone has some utility; therefore everyone must has some consumption (bentham) |
|
|
Term
|
Definition
| the degree of utility of the last addition, or the next possible addition of a very small, or infinitely small, quantity to the existing stock. (Jevons) |
|
|
Term
|
Definition
| marginalists are deductive in their thoughts and are purely mathematical. Economics should follow science and mathematics with theories and equations before looking at the real world and experiences. (Walras) |
|
|
Term
| Theory of General Equilibrium |
|
Definition
similar to Smith’s concept of a “natural” price to which market prices would gravitate as a consequence of competition, but suggested that possibility of an equilibrium that prevailed simultaneously in ALL markets
Walras |
|
|
Term
|
Definition
describes the concept of how for some goods, a small percentage change in price would result in a large percentage change in quantity demanded or supplied, while for other goods, a small percentage change in price would leave to a small percentage change in quantity supplied and demanded
Marshall |
|
|
Term
|
Definition
A child who grows up in wealth will be less motivated to work hard and earn what his parents have earned and will be less apt to take over his father’s business than an outsider who grew up in more modest means
Marshall |
|
|
Term
|
Definition
the idea that people desire to purchase based on a good promoting a wealthy “look” as opposed to the rarity of the good. Example – Asians and black people.
Veblen |
|
|
Term
|
Definition
have views that differ from financial managers; the idea of production for use as opposed to production for profit
Veblen |
|
|
Term
|
Definition
The leisure class is the aristocracy that does not value workmanship and strives to accumulate as much as possible. The lower classes strive to enter the leisure class, and will thus not try to revolt and enter into a communist society.
Veblen |
|
|
Term
| Euthanasia of the rentier |
|
Definition
disappearance of capitalists as a class without a political revolution; results from long run; occurs when profit rate approaches
Keynes |
|
|
Term
|
Definition
b/c we understand how to use Keynesian economics to put in policy to make our economy operate at full employment. After this, we reinstitute laissez-faire and let the markets run free; this idea fell apart in the 1970s.
Keynes |
|
|
Term
|
Definition
investment decisions are a reflection of human psychology, rather than rationalism. Optimism vs. Pessimism.
Keynes |
|
|
Term
|
Definition
creators break down barriers in society and make things easier for entrepreneurs; breaks down social barriers
Schumpeter |
|
|
Term
| Sociological barriers to capitalism |
|
Definition
| people will reject the side effects of the system and demand state intervention to prevent these things from happening. suffering from mass unemployment, inequality of wealth, and economic insecurity Schumpeter |
|
|
