Study guide for Exam 1-answers

Study guide for Exam 1-answers - Study guide for Exam 1 F...

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Unformatted text preview: Study guide for Exam 1 F rom lecture and Wharton readings Capitalism – is the economic system in which the means of production are owned by private persons, and operated for profit and where investments, distribution, income, production and pricing of goods and services are predominantly determined through the operation of a free market. Production and distribution in a capitalist system are governed by the free market rather than sate regulation. Marx believed that capitalism created a bourgeois society. Marx distinguished the use value of commodities from their exchange value in the market. The use of labor power had become a commodity under capitalism. The exchange value of labor power is reflected in the wage. Marx believed that capitalism couldn’t coexist with democracy. Democracy – is a form of government in which the supreme power is held completely by the people under a free electoral system. In theory, all members of the society have equal access to power, and all members enjoy universally recognized freedoms and liberties. Since capitalism is controlled by a small group of bourgeoisie, and the proletariats have no control whatsoever so democracy cannot exist. The bourgeoisie is social class of people made of the upper class whose status or power comes from employment, education, and wealth. Marx describes the bourgeoisie as the social class which obtains income from ownership of trade in capital assets. In industrial capitalism, the bourgeoisie becomes the ruling class. Marx sees the proletariat and bourgeoisie at an ongoing class struggle, and that capitalism exploits workers. Proletariat – is a term used to identify a lower social class. o Marx refers to them as the working class. In Marxist theory, the proletariat is that class of society which does not have ownership of the means of production and whose worth is their labor in exchange for a wage. o He also believed that capitalism is a system based on the exploitation of the proletariat by the bourgeoisie. This exploitation takes place as follows: the workers, who own no means of production of their own must seek jobs in order to live. They get hired by a capitalist and work for him by producing goods or services in exchange for a wage. His labor becomes a commodity. The capitalists earn money without actually doing any work. Marxists argue that the new wealth is created through work; therefore if someone gains wealth that he did not work for, then someone else works and does not receive the full wealth created by his work. In other words, that someone else has been exploited. o Marx argued that it was the goal of the proletariat to displace the capitalist system with som....
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Study guide for Exam 1-answers - Study guide for Exam 1 F...

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