Question

What are the differences between Adam Smith's and David Ricardo/Karl Marx ’s view regarding the theory of value?

Answer 1

In the 18th century, what determines the value of the goods is the central problem of the economy.

According to the Adam Smith, the value of the goods depends on labor value and the coast of the production.He stated that the value of exchange and value it uses. The labor theory value states that quantity of labors involved in the production determines the value of the goods higher the quality of labor in production processes the more th values of the goods.

The cost of the production theory states that not only the cost of the product but also other factors cost involved in determining the value of the goods.

The David Riccardo like Adam Smith theories he also believed in value in use and values in exchange in determinating the value of the goods.The value of the goods depends on the number of labor units spent on its production.

Karl Marx- In fact, Karl Marx formulated the labor theory of value to attack Capitalism. According to the theory Labour is the real source of the value of the goods because any goods are produced with help labor it involved labors effort and time hence labor are the real creators of the value.

The Karlmarx theory of labors deals with subjective factors elements in determinating the value of the goods.