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Economic Philosophers

by: Sydni D'Amore

Economic Philosophers ECN 265

Marketplace > Wake Forest University > Economcs > ECN 265 > Economic Philosophers
Sydni D'Amore
GPA 3.68

Allin Cottrell

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Allin Cottrell
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This 5 page Class Notes was uploaded by Sydni D'Amore on Wednesday October 28, 2015. The Class Notes belongs to ECN 265 at Wake Forest University taught by Allin Cottrell in Fall. Since its upload, it has received 23 views. For similar materials see /class/230742/ecn-265-wake-forest-university in Economcs at Wake Forest University.


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Date Created: 10/28/15
ECONOMICS 265 SPRING 2007 Smith The Wealth of Nations Book 2 chapter 2 Of Money l 7 This is a long and relatively dif cult chapter so here is a brief readerls guide to help you nd your way about in it Guide pp 3817388 Here Smith is in effect developing his concepts of Gross National Product and Net National product and considering the issue of depreciation ie what must be subtracted from GNP to yield NNP Along with these pages consider too pl 420 and the account of money as dead stockll pp 3827393 Smith examines the role of banks in economizing on the use of metallic money hence freeing real resources for other uses lmplicit here is the concept of the velocity of circulation of money a modern account of which can be found in any macro textbook pp 3937397 He gives an illustration of his general ideas on banking by reference to the Scottish case in particular and also by way of contrast with England pp 3977399 He considers the constraints on the issue of bank money and the problems arising from overissue pl 406 top half He spells out what he considers to be the proper lending business of the banks and what sort of lending is improper pp 4247427 He argues against the idea that an increase of paper money will lead to in ation so long as paper money is convertible into precious metals on demand But if bank note are not so convertible in ation may indeed result pl 429 He argues for the virtues of competition in banking You should study carefully all of the pages referred to in the Guide Pages not speci cally referred to may be given less emphasis though I suggest a quick read through them to try to get the gist of what Smith is saying Focus questions H l Write down Smithian equations de ning GNP whole value of annual produce NNP and depreciation That is put his verbal discussion of these ideas into a compact schematic form E0 According to Smith in what precise way do the banks aid in the development of the economy In particular what is the mechanism whereby the banks aid in the growth of international trade 9 What according to Smith were the advantages of the Scottish banking system over that in England g i What are the advantages for Smith of broad competition in the sphere of banking On the other hand what general constraints does Smith reckon should be placed on such competition and why ECONOMICS 265 SPRING 2007 Notes and questions on Marxls Capital Volume 1 Chapter 1 The Commodity The next assignment is to read Marxls Preface to the rst edition of Capital pp 89793 and the rst chapter You may skim section 3 of this chapter concentrate on ppi 1257137 sections 1 and 2 and ppi 1637177 section 4 Below are some focus questions please write up a couple of pages of notes in answer to these 1 Section 1 What argument does Marx provide to support his claim that labor must be the substance of value 2 section 1 1f the value of a commodity is determined by the amount of labor time it contains it might appear that the product of an inefficient worker who takes more time to accomplish any given task ought to be more valuable than the product of an efficient workeri How does Marx get around this problem 3 section 2 What exactly does Marx mean by the dual character7 of labor 4 section 4 Political economy has indeed analysed value and its magnitude however incom pletely and has uncovered the content concealed within these forms But it has never once asked why this content has assumed that particular form that is to say why labour is expressed in valuei 77 pp 17374 Marx however does ask this question Try to put his answer into your own words Chapters 276 Below is a brief guide to this reading Be prepared to discuss the particular points to which 1 have drawn attention H Chapter 2 Exchange Notice in particular the discussion on p 182 of the origin of commod ity exchanger Compare with Smithls idea of man7s natural propensity to truck barter and exchangeli Other than that you may skim this chapter to Chapter 3 Money Pay particular attention to the following points a p 192 the idea that money is able to serve as such only because it itself has value ie costs labortime to produce Compare Adam Smith b The notion of the circuit7 of commodity exchange CMC ppi 1997206 c Marx7s discussion of paper money pp 224761 Again compare with Smith CA3 Chapter 4 General formula for capital Note the different circuit of exchange now MCMi This chapter is short read all o it F Chapter 5 Contradictions in the General Formula Note in particular the argument that surplus value pro t cannot arise from the process of circulation of commodities as such Again a short chapter read a i 5 Chapter 6 Labor Power A very important chapter for Marx7s overall view of things Again shorti Note the distinction between laborpower and labor itself Chapters 7710 Below is a guide to this reading Again be prepared to discuss the particular points to which 1 have drawn attention as well as raising any additional questions that occur to you in the course of your reading 1 Chapter 7 labor process and valorization process On pp 2837292 we nd Marxls discussion of the labor process in general This is for the most part very clear Note that on p 291 footnote 10 Marx registers his disagreement with the general de nition of capitall as simply previouslyproduced means of production Question What is Marx7s own de nition of cap ital As regards pp 293 ff on the valorization process check your understanding of Marx7s numerical example the spinning of cotton yarn by setting out the example in schematic form along with the assumptions Marx is making Also pay attention to pp 2997300 where Marx treats various contemporary theories of pro t in ironic mode Check your understanding by expressing these theories in your own words Finally with respect to pp 0 72 What is Marxls own theory of the origin of surplusvalue or pro t E0 Chapter 8 constant capital and variable capital The basic idea here is quite straightfor ward ln Marxls theory living labor7 creates value during the labor process while previously produced means of production merely transfer their value to the product Since capital in the form of previouslyproduced means of production simply transfers a given quantum of value to the product Marx calls it constant capital7 On the other hand capital advanced in the form of wages is not merely replaced but is augmented by a surplus value hence Marx calls the latter variable capitall CA3 Chapter 9 rate of surplus value There is a certain amount of rather tedious arithmetic in this chapter but the basic idea is clear enough The working day is analytically divided into two portions during one portion the worker carries out an amount of labor suf cient to replace produce the equivalent of the value of his own laborpower during the other portion he produces a surplusvalue for his employer The monetary equivalent of the rst portion of labor time is labeled v and the monetary equivalent of the latter is labeled s The rate of exploitation7 is then sv Note that sv has a minimum of zero but is unbounded on the upside An alternative and in some ways better measure of Marxian exploitation would be ss v the fraction of the social working day spent producing surplus value bounded by zero and unity Challenging question See if you can gure out and express in your own words what is going on in the discussion of Seniorls last hour7 on pp 3337338 F Chapter 10 the working day This chapter is for the most part historical rather than ana lytictheoretical Note the discussion on pp 576 of different historical forms of exploita tionl From p 349 to the end of the chapter Marx is mainly concerned with illustrating his conception of struggle over the length of the working day by reference to the English case Note the very remarkable quotations from the English Factory lnspectors and the Children s Employment Commission It is necessary to read this sort of thing to get a sense of the basis for the intense moral indignation that pervades Marxls Capital Chapters 11714 Below is a guide to this reading Again be prepared to discuss the particular points to which I have drawn attention as well as raising any additional questions that occur to you in the course of your reading 1 Chapter 11 rate and mass of surplus value This chapter makes the basic point that the mass ie total amount of surplus value generated in the valorization of a capital depends positively on both a the amount of laborpower purchased and b the rate of surplus value This is pretty straightforward Note however the puzzle raised on pp 4207421 Let the rate of surplus value rate of exploitation be given Now take two capitals of equal total monetary magnitude one of which is laid out mostly on purchase of laborpower plus some expenditure on means of production and the other of which is laid out mostly on means of production ie constant capital in Marxls terminology and to a lesser extent on labor power It is clear that the former capital will generate more surplus value than the latter by virtue of its setting in motion more laborpower Yet surely all capitals ought in equilibrium to generate E0 CA3 g the same rate of pro t There appears to be a contradiction here Marx will attempt to resolve it in Volume III of Capital Chapter 12 concept of relative surplus value A short and easy chapter The main burden of it is contained in the short paragraph on p 432 de ning absolute surplus value7 obtained by lengthening the working day the value of laborpower remaining constant and relative surplus value7 obtained by shortening the time of necessary labor and hence reducing the value of laborpower the length of the working day remaining constant Note also the discussion on pp 433435 of how an individual capitalist who manages to increase the productivity of labor in his own enterprise will for a time realize an aboveaverage pro t Chapter 13 cooperation Marx begins to discuss the way in which the production process itself is transformed under capitalism with the gathering together of the workers under the direction of the capitalist or his managerial employees We begin to see the sources of the tremendous increase in the productivity of labor under capitalism as compared to previous modes of production Chapter 14 division of labor and manufacture Note that Marx is using the term manufac ture7 in the old literal sense of making by hand He places this phase of production in the 16th to 18th centuries Question What are the two ways in which manufacture originates See pp 455458 Note the echoes of A Smith on pp 4587461 but then note that in the discussion of the division of labor on pp 4707480 Marx goes beyond Smith to develop a more elaborate account Finally note the effects on the individual worker of the capitalist division of labor on pp 480 ff Smith is again quoted sympathetically on p 483 Chapters 15724 The remaining chapters of Capital to which we shall pay particular attention are as follows 15 23 24 25 and 32 Here are some notes on chapters 15 23 and 24 1 E0 9 Chapter 15 machinery and largescale industry This is a long chapter and we cannot study all of it in detail Look out for the following speci c points 1 Marxls argument concerning the social preconditions for the industrial revolutionl which he regards as more decisive than the invention of particular kinds of machines pp 50374 2 His discussion of the economizing of labor time and his claim that this is not pursued in a socially rational manner under capitalism pp 51377 3 The discussion of the effects of the development of machine industry on the structure of the workforce pp 51778 4 The paradox whereby the development of labor saving machinery leads to an extension of the working day pp 528732 5 Discussion of the effects on the craft skills of the workforce 54578 6 Discussion of the impact on employment and unemployment of the introduction of machinery especially pp 570 57273 57577 58273 Chapter 23 simple reproduction Here Marx considers a simpli ed situation in which the capitalists consume an amount equal to the entire surplus value each period Reproduction is then simple7 in the sense that it continues on the same scale from period to period ie with no expansion of the stock of capital The main point of this short chapter is summed up on its last page The capitalist process of production produces not only commodities not only surplus value but it also produces and reproduces the capitalrelation itself on the one hand the capitalist on the other hand the wagelabourer77 724 That is the reproduction7 in question is not just a matter of reproducing xed capital making good depreciation but also of reproducing a certain set of social relations Chapter 24 transformation of surplusvalue into capital Here Marx tackles the more complex issue of the reproduction of capital on an expanded scale where part of the surplus value produced each period is not consumed by the capitalist but rather accumulated Marx notes that an original primitive accumulation7 of capital is needed to get the process started but after this point the ownership of past unpaid labour is thenceforth the sole condition for the appropriation of living unpaid labour on a constantly increasing scale77 729 As the owner of the means of production and purchaser of laborpower the capitalist is able to extract surplus labor from the workers and by using part of this surplus labor to make additional constant capital he is then able to employ iiei exploit in Marxls View of things progressively more laborpoweri Note that on ppi 7297734 Marx returns to the issues discussed earlier in chapters 476 and explains more fully how it is possible on his theory for the exchange of equivalents commodities containing the same amount of labor to coexist with the continual conversion of money into capital Sections 2 and 3 of the chapter are mostly devoted to a critique of what Marx considers erroneous conceptionsi First he tackles the idea advanced by Smith and Ricardo that ac cumulation of capital is equivalent to increased expenditure on productive labori This says Marx is to ignore the necessity of accumulating constant as well as variable capitali Part of the surplus value will serve to augment the variable capital but part must take the form of ad ditional means of production Second Marx ridicules the abstinence theory of accumulation although he notes the difference between the attitude towards consumption of the industrial capitalist and the landlord


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