Question

1) (Labor Theory of Value): Describe Marx’s labor theory of value. Explain how he argues that capitalism is unsustainable. In explaining his argument, use the system of equations (logic).

2) (Material Balances): Describe the concept of material balances as used by centrally planned economies. Explain what it means, how it is used, and how it was done in practice. Finally, what are some critiques of the material balances approach? How is input-output analysis relevant for planning in a centrally planned system?

3) (The Socialist Economic System): According to the article “The Classical Soviet-type Economy,” what are the advantages of a centrally planned socialist economic system?

4) (Lenin and Socialism): According to Marx, the three laws of capitalism are: a) law of the falling profit rate; b) law of disproportionality (the problem of overproduction); and c) law of concentration. Marx said that these laws would eventually cause the demise of the capitalist system, which would be replaced by the socialist system. Lenin, however, noticed that this was not the case and he proposed the fourth law of capitalism. Read “Lenin’s Critique of Global Capitalism” at the Commanding Height website (Google: Lenin’s Critique of Global Capitalism) and explain how Lenin added to Marx’s view of the capitalist system.

Answer 1

Answer:(1)Value of all commodities and other economic goods measured.It all rely on number of labor hours required to produce these economic goods and commodities.It is known as Marx's labor theory of value.

Marx believe social welfare projects intitiate by government in future will take down Capitalism benefit strategy.Thus, capitalism system will not work in longer run.He argued that poverty and inequality make poor peasents and workers against the capital system.Marx analysis of capitalism is how capitalists obtain profit from worker society.But this exploitation from worker would not be noticed on the name of capitalism.

(2)Raw Material supply consider for units and purpose behind it to supply balance of production input into production output.It is known as Material Balances Concept.

Meterial balance used by central planned economy where notice will be taken of land,capital and raw material,technology available in an economy and then distributed propotionaly to specific industry to getting balance betwen demand and supply.It is relevant for central planning system as if there is ecnomic distubances create in economy economic planners ready with ample resources.

Critiques of Material balance approach:For every single commodiry blance sheet need to made for checking the supply of resorces.Economic planner always needs to be on toes to make balance between supply and demand.Usually supply exceeds demand.So, extra allowance need to made on precautionary basis.

Input-Output Analysis:made on linkage economic division.It is used for analyzing positive and negative sudden distrubances in economy and its effect on it.

(3)Advantages of socialist economic system:In socialist economic system government have all the controls.So it narrow doen the gap between rich and poor.They also able to use land,labor,capital,tachnology and natural resources.Thus,its benefit reach to evey section of society.

(4) Lenin added to Marx theory of capitalism,which is also called fourth law of capitalism.Main points of lenin fourth law was in monopoly environment capital stay in one place.Therefore investment oppotunity in industrial sector would be very limited.So, it is very necessary to export our goods and natural resoueces around the world in order to gain profit out of it.By this way,we also economicaly good position in world.