Wednesday, November 08, 2017

What Marxist economics misses out

○ Marxian economic theory is actually considerably conservative because it is excessively biased on the supply side (productivity etc.).

○ Because Marx's economic theory is based on Say's Law which assumes that the demand always meets the supply where all supplied goods, services, and labours are consumed or utilised.

○ Maintaining the surplus value by exploiting the cheap labour force might be profitable for the capitalist class in the short term. However, Marxian economics ignores that the capitalist class will soon needs to look after those unemployed labour force after the aggregate demand slows down in the medium-long run.

○ Since the theory in Marx's The Capital entirely follows the theorem of Ricardo's economics, it assumes the market is always in a perfect competitive and the comparative advantage always prevails. This is a pretty much same assumption as the majority Neoliberalists whom Marxists antagonise.

○ Therefore, Marxian explanation is insufficient to explain the monopolistic force in any market.

○ The biggest defect of Marx's theory is that it is critically insufficient to explain "unemployment". Since Marx's economic theory assumes the labor market operate by means of Say's law, all the workers supplied will be hired so that the only existing unemployment is the natural unemployment i.e. everyone is voluntarily employed as well as voluntarily unemployed so there is no involuntary unemployment in his theory. This is also a pretty much same assumption as the majority Neoliberalists whom Marxists antagonise.

○ Marx successfully pointed out the cruel misery of those employees in a fate of keep being loyal to their employer and their institute. However, his theory hardly pays enough attention to the problem of those who cannot find any means of life like these unemployed individuals, which rather seems to be the underling problem of the modern developed world's social problem.

○ Marxian theory does not indicate the social problem of anomie where neither aristocrats nor capitalist provides the majority individuals with any means of living.

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