2 15 07 Thursday - Thursday I Nature of Capital A Capital is usually defined as wealth creation 1 How do you make something valuable a Necessity b

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2/15/07 Thursday I. Nature of Capital A. Capital is usually defined as wealth creation 1. How do you make something valuable? a. Necessity b. Scarcity c. Involves value of the item and the labor of the item 1). Marx argues that this is not enough a). He wants to think of it as a “social process” (instead of an economic system) of accumulation and expansion Famous formula M -> C -> M’ (money convert to commodity, which you then convert to more money ) Other economists argue that there is a limit to wealth; however, Marx argues that there must be expansion when capitalism kicks in Marx argues that there is going to be downturns – you created a society with great potential for expansion, but you’ve also created a tiger that is hard to control Change of the revolutionary will change the face of the earth and is anarchy – will eventually crack of its own nature – will lead to recession and revolution of the proletariat (Communist Revolution) d. Human skill e. How economics deal with it – involves notion of good and exchange value 1). Money is a key element to this but is not necessary because you can barter too B. General tendencies of the Capitalist system 1. 5 Key general tendencies according to Marx a. Growth oriented system 1). It HAS to grow – it is not a choice; the system has to expand because it
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This note was uploaded on 05/18/2008 for the course ISF 100A taught by Professor Klee during the Spring '07 term at University of California, Berkeley.

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2 15 07 Thursday - Thursday I Nature of Capital A Capital is usually defined as wealth creation 1 How do you make something valuable a Necessity b

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