30-Second Economics

KEYNESIAN ECONOMICS (POSITIVE)

“In one word, for exploitation, veiled by religious and political illusions, [capitalism] has substituted naked, shameless, direct, brutal exploitation.”

Yet when the laborer’s use value is combined with the machines owned by the employer, the commodities produced are worth more than the laborer’s exchange value; in this way a surplus is generated, which the employer takes as profit—this, Marx argued, is “exploitation.”

labor, too, was a commodity and was integral to the growth of capitalism.

item produced for sale

value and an exchange value

ADAM SMITH
Leave the market to its own devices and it will naturally find a point of equilibrium that will bring stability and prosperit

This school of thought places great emphasis upon the ability of markets to adjust to economic shocks. Yet periodic economic crises call into question just how rapidly markets can actually adapt.

classic example is a diamond, which, as an object, is of little real use, and yet its use value in most modern societies is nevertheless very high

supply and demand