Classic political economists believed that the value attached to a commodity

Q1.

Classic political economists believed that the value attached to a commodity is directly related the labour that was put up in production of the same commodity. This is later expounded that labour in its own unchanging value is the real and ultimate measure for value in the current world and this value may be showed by, the amount of money paid for the commodity which is pointed out as the nominal value of the same (Milios, Dimoulis, & Economakis, 2018). The real value of the labour however maybe met by difficulty in valuing the actual effort that went into the production process since some of the labour is more skilled and experienced than others. In spite of this, the economist argue that the difference brought out here is later balanced within the “haggling and bargaining” nature of the market which tends to correct the true value of the labour (Kurz, 2010). Socially necessary labour is the current labour effort required to produce a given output whereas socially average time is the given labour time necessary to give a given output.

Q2.

Marx and Schumpeter showed that what really set of the difference and made firms stand out in promotion of capitalism is the firm’s ability to have access to better technology, better suppliers and better firm organisational plans. This ability, as pointed out by Marx and Schumpeter, strikes at the margins of the firm foundation directly and impacts the very lives of these firms (Phillimore, 2001). An example is the giant Apple company which strategy of competitiveness is put to the internal factors, specifically the production factors giving the company the higher competitive advantage which offsets it as a minor monopoly.

Q3.

Ernest Mandel argues that the rate of profit in the monopoly sector is limited by and dependent on the production of surplus value in the competitive sector (Mandel, 1967). He explained the dynamics of crisis and uneven development in the concept of surplus profit in Marxist economic model. According to Mandel, inequalities, crises, wars, mass poverty, majority oppression, and perversion through fascism are not external disturbances, accidents, nor temporary interruptions but logical and natural expressions of the free market (Freeman, 1996). In his observation, Mandel suggested that capitalism is relatively unstable and dependent on surplus value in the free market economy. He observed this based on the movement of capital, labour, and the limits to equalization of different profit rates.

Q4.

The precariat social group is essentially a class of people in the job market whom employment mode or type is in anyway structured to be insecure (Standing, 2013). They include temporal employments and freelancers on the other hand the “reserve army of labour” refers to a group of people in the society that are unemployed or their position of employment is lowly rated to the skills they carry (Grover & Piggott, 2005). It may also refer to the mismatch in occupational places compared to the skills possessed where the current occupation is in lower rating compared to the skills possessed. Insecure employment and underemployment status have greatly affected the general wellbeing of the people involved. This is both mentally and health wise. It is seen that with underemployment status the people involved happen to showcase a lot of dissatisfaction. This is accrued to the fact that they are working in a field not related to their profession or lowly rated to the set of skills at disposal. Underemployment results such as low-income rates are a major cause of increased stress levels within the working groups (Standing, 2013). This is also evident with the class of people under the precariat jobs section. These two groups represent a mentally deprived group associated with day to day worry of termination and feature expectations that are mostly unpredictable.

Q6.

Labour shedding in one part of the economy means there are increased numbers of unemployed personnel in the economy. An increased number of unemployed people in the economy reduces the labour cost due to the increased number of people readily available for employment (Boeri and Keese, 1992). When there is increased supply of labour in the economy it results to less choosy nature of the unemployed group to the jobs available. This means that people tend to refrain from being specific on the skills they possess for job securing which results to people working in fields they are not necessarily skilled in for even lower wages. Therefore, when the is labour shedding in one part of the economy, the other parts gain the advantage of low cost of labour that adds up to increased profit levels in these economy parts. Mechanization in work places is a great way for lowering production cost with other production benefits (Kongolo, 2010). Adopting mechanized systems lowers the number of employees needed in the firm hence the firms cut on the payments of the wages of the employees cut from the workforce and with that firms cuts on the wages in the event of production mechanization. When the levels of unemployment rise in the economy it results to increased labour supply which does not match the demand of labour in place. A higher labour supply with regard to the labour demand results to lower prices on the labour value available and this is an advantage to the labour-intensive firms. These firms are able to access adequate labour at cheaper prices.

Q7.

Productivity levels in firms or organizations is highly dependent on the leadership system in these settings. Proper leadership is accrued to the set of skills possessed by the personnel put in the higher positions in the firms and organisations. For higher productivity the leadership in these areas should possess a morale captivating skill with which to encourage and motivate the entire workforce for maximization of their output (Soltanisehat, Alizadeh, & Mehregan, 2019). The motivating factor in leadership should also support teamwork within the workforce for a unified goal internally. Socially, leaders should be great team workers and support team working within their group too. Team working is a great tool to ensure the goals of the organisation are met. Synchronization of the entire team makes the focus remain clear to every employ preventing deviation while promoting hardworking and determination. Organizational skills are also very critical to the success of the organization. Some of the necessary organizational skill include proper work delegation, time management skills, proper and effective communication skill and critical thinking with analytical organisation and formulation of ideas.

Q9.

Public goods are products or services that are available for use by all people in the sector the product is necessary. These products are said to have the characteristics of non-rivalry and non-excludable. The users of these products cannot be exempted to use them even when they are not able to compensate the same. These products are also not affected by multiple persons using them in that the use by one person does not affect the use by another (Bramoullé & Kranton, 2007). Landmarks and facilitating infrastructure are products usable by multiple people and are meant to operate this way in order to serve their estimated purpose and to be cost effective. These products are meant to be treated as public goods since their ownership is not assigned to a single individual and their nature is meant to serve a group of people without exemption.

References

Freeman, A. (1996). Ernest Mandel’s Contribution to Economic Dynamics. https://mpra.ub.uni-muenchen.de/64974/1/MPRA_paper_64974.pdf

Mandel, E. (1967). The labor theory of value and Monopoly Capitalism. International Socialist Review, 28(4), 29-42.

Kurz, H. D. (2010). Technical progress, capital accumulation and income distribution in classical economics: Adam Smith, David Ricardo and Karl Marx. The European journal of the history of economic thought, 17(5), 1183-1222.

Milios, J., Dimoulis, D., & Economakis, G. (2018). Karl Marx and the classics: An essay on value, crises and the capitalist mode of production. Routledge.

Phillimore, J. (2001). Schumpeter, Schumacher and the greening of technology. Technology Analysis & Strategic Management, 13(1), 23-37.

Standing, G. (2013). Defining the precariat: A class in the making. Eurozine. https://eprints.soas.ac.uk/18276/1/Defining%20the%20precariat%20Eurozine%20Apr%202013.pdfBoeri, T., & Keese, M. (1992). From labour shortage to labour shedding: labour markets in Central and Eastern Europe. Communist Economies and Economic Transformation, 4(3), 373-394.

Kongolo, M. (2010). Job creation versus job shedding and the role of SMEs in economic development. African journal of business management, 4(11), 2288-2295.

Bramoullé, Y., & Kranton, R. (2007). Public goods in networks. Journal of Economic theory, 135(1), 478-494.