Ricardo and Marx World View
I. David Ricardo
Ricardo was a classical economist known for many contributions to economics but most notably for his labor theory of value and theory of rents. David Ricardo and several other economists also simultaneously and independently discovered the law of diminishing marginal returns. His most well-known work is the The Principles of Political Economy and Taxation (1817). [1]
A.. Labor Theory of Value
Though many classical economist contributed to labor theory including Adam Smith it is Ricardo whose name is par excellence connected with labor theory of value. Ricardo was faced with two problems that he would be forced to solve in regards to his theory.
First, the difference in value between different types of labor, he cavalierly considered inessential since, 'If a day 's labor of a working jeweler be more valuable than a day 's labor of a common laborer, it has long ago been adjusted, and placed in its proper position in the scale of value" [2]The second problem was a little harder and it resulted to what would be later called 'the time structure of production '[2] Ricardo reasoned that since the uniform rate of profit must apply to all commodities, even goods that have the same embodied labor in different stages of production would have different relative prices depending on the rate of profit. Because of this prices are not invariable to different distributions between wages and profit.[2] Ricardo struggled with this problem for the rest of his life. The inability to invoke such a commodity, a purely analytical problem which has since been resolved by Sraffa as late as 1960, later led to the abandonment of the labor theory of value proper. Ricardo, however, thought that this logical problem did not affect the basic truth of his theory and, moreover, did not himself see any even remotely plausible alternative. [2]
B. Theory of Rents
Economic rent is not the same "rent" that we pay at the start of each month to our landlords, but rather
Ricardo was a classical economist known for many contributions to economics but most notably for his labor theory of value and theory of rents. David Ricardo and several other economists also simultaneously and independently discovered the law of diminishing marginal returns. His most well-known work is the The Principles of Political Economy and Taxation (1817). [1]
A.. Labor Theory of Value
Though many classical economist contributed to labor theory including Adam Smith it is Ricardo whose name is par excellence connected with labor theory of value. Ricardo was faced with two problems that he would be forced to solve in regards to his theory.
First, the difference in value between different types of labor, he cavalierly considered inessential since, 'If a day 's labor of a working jeweler be more valuable than a day 's labor of a common laborer, it has long ago been adjusted, and placed in its proper position in the scale of value" [2]The second problem was a little harder and it resulted to what would be later called 'the time structure of production '[2] Ricardo reasoned that since the uniform rate of profit must apply to all commodities, even goods that have the same embodied labor in different stages of production would have different relative prices depending on the rate of profit. Because of this prices are not invariable to different distributions between wages and profit.[2] Ricardo struggled with this problem for the rest of his life. The inability to invoke such a commodity, a purely analytical problem which has since been resolved by Sraffa as late as 1960, later led to the abandonment of the labor theory of value proper. Ricardo, however, thought that this logical problem did not affect the basic truth of his theory and, moreover, did not himself see any even remotely plausible alternative. [2]
B. Theory of Rents
Economic rent is not the same "rent" that we pay at the start of each month to our landlords, but rather
Bibliography: 1. "David Ricardo Definition | Investopedia." Investopedia – Educating the world about finance. http://www.investopedia.com/terms/d/david-ricardo.asp#axzz2Kci5qREd. 2.Theocarakis, Nicholas J. "Metamorphoses: The Concept of Labour in the History of Political Economy." The Economic and Labour Relations Review : ELRR 20, no. 2 (2010): 7-37. Accessed February 6, 2013. http://p2048-www.liberty.edu.ezproxy.liberty.edu:2048/login?url=http://search.proquest.com.ezproxy.liberty.edu:2048/docview/755276245?accountid=12085 3. An Exercise in the Theory of Rent Location and Land Use: Toward a General Theory of Rent by William Alonso Review by: Robert Clancy The American Journal of Economics and Sociology , Vol. 23, No. 4 (Oct., 1964), pp. 436-438 4."Karl Marx | Investopedia." Investopedia – Educating the world about finance. http://www.investopedia.com/terms/k/karl-marx.asp#axzz2Kci5qREd. 5."BBC News - A Point of View: The revolution of capitalism." BBC - Homepage. http://www.bbc.co.uk/news/magazine-14764357. 6.Marx, Communism, and Markets David Miller Political Theory , Vol. 15, No. 2 (May, 1987), pp. 182-204 7.Marx, K. (1867/1909) Capital: A Critique of Political Economy. Volume I: The Process of Capitalist Production, translated by S. Moore and E. Aveling, Charles H. Kerr and Co., Chicago. 8."John Stuart Mill | Investopedia." Investopedia – Educating the world about finance. http://www.investopedia.com/terms/j/john-stuart-mill.asp#axzz2Kci5qREd. 9.Kurer, Oskar. "Mill 's recantation of the wages-fund doctrine: Was Mill right, after all?." History of Political Economy 30, no. 3 (1998): 515-536. Accessed February 10, 2013. 10. "Mill, Principles of Political Economy, Book IV, Chapter VII | Library of Economics and Liberty." Library of Economics and Liberty. http://www.econlib.org/library/Mill/mlP62.html#anchor_c60.