Referee Report for the paper titled “The Politics of Market Socialism” by Andrei Shleifer and Robert W. Vishny Summary : This paper provides an in-depth analysis of one of the rarely discussed drawbacks of market socialism - the assumption that a democratic socialist government pursues efficiency. It argues that : Even if a government is democratic, it will not place sufficient weight on economic efficiency, irrespective of whether it is socialist or capitalist If a government ends up pursuing its ‘political’ objectives, the damage will be greater under socialism than capitalism The former argument is modelled in a two fold manner. First, that socialist dictators cause more economic inefficiency than capitalist dictators due to an added burden of political insecurity;
This leads on to the global issue of social hierarchy. It establishes inequalities within economy, education and health that the poorest try to outdo, becoming unconsciously even more depended on the capitalist system, because they
Weber however took more of a pessimistic view arguing that society is characterised by the process of rationalisation. Marx sees change through capitalism and conflict and Weber sees change through rationalisation and bureaucracy. Both have differing views about social change and the outcome of such change. Marx’s views are much more optimistic than Weber’s idealistic pessimistic views. Karl Marx Marx’s theory of social change is entwined with his idea of social classes and class conflicts.
The idea of socialism and communism may be slightly unrealistic and challenging to implement but in a utopian society, Marx’s view of the political structure is ideal. Arendt argues that there is no place for poverty in politics but Marx makes the point that poverty must be eliminated first so that politics can flourish. The only way to eliminate poverty is through the political system and the overthrow of the elite. As long as there is economic oppression, freedom is not attainable for every citizen. The separation of economics and freedom is unrealistic because money controls the actions of the people.
Capitalism and Freedom While reading Capitalism and Freedom, a clear idea that is regularly identified would be how an economy should run. Milton Friedman believed in a capitalistic economy (Friedman). He also felt that government can not have two forms of rule (Friedman). For example, he felt that having a socialist economy but a democratic style of government would not work. By having two different styles of government, Friedman thought the government would infringe on people’s individual rights.
Heckscher-Ohlin Theory Comparative advantage ascends from differences in national factor endowments, such as land, labour, or capital, as opposite to Ricardo’s theory which stresses productivity. This theory suggest that the country should focus on exporting products using its scarce resources and brings across a free trade principle where goods will be moving freely without any trade barriers implying that this would make flow of resources in and out more demand and more supply will increase the country’s economy(Eli Heckscher 1919 &Bertil
The management of working capital is essential for the company to remain liquid enough to meet its short term creditors. But can proper working capital management make a company more profitable than a competitor who does not manage its working capital? What are the different metrics and processes that need to be improved to increase profitability through working capital management? This thesis is restricted to the different processes around working capital management and will concentrate on a few different metrics to find out how companies can perform better by managing working capital. The method used will be a quantitative study of how working capital management affects profitability in Finnish and Swedish publically traded companies.
In the first part of the article, Tilly explains conservatives’ opinions and trickle-down theory. Conservatives claim that the rewarding system of unequal society steers the behavior of people, who are forced to make the best economic choice. The writer verifies this incentive story by giving example of the inefficient economic system in the USSR. On the other hand, trickle-down theory indicates the role of investment spending, which makes a direct contribution to the economic activity, as well as the volume of investment depends on saving ability of the rich population. This theory is rebutted by “paradox of thrift”, which was introduced by Keynes.
The basic premise of the classical theory of unemployment was that a market economy would ultimately and automatically move towards full employment. This widespread belief prevalent in the classical theory was based on the principle referred to as Say’s Law which basically states that “supply creates its own demand”. This essentially means that as firms generate output, they also generate enough income in order to absorb that output. Therefore, this belief in the economy’s ability to maintain full employment conditions when left to itself lead economists to adopt the principle of laissez-faire, i.e. of non-intervention by the government.
The major structural contradictions can be identified in the issue of commodity value (Best, 2003), class conflict and exploitation (Marsh, 1996) and the effects this has on the worker (Harlambos & Holborn, 2008). Marx argues that use-value is the only significant worth of a product, however, the Capitalist society has conflated this with exchange value – a worth based on abstract market fluctuations rather than material reality (Best, 2003). As the exchange value is not set, it is only the realisation of profits – of the difference between labour costs and the amount paid for the commodity – that benefit the Capitalist. This creates a situation where the Capitalist is over reliant on an unstable situation (Best, 2003). Herein lies one of the foundational contradictions of Capitalism to which Marx accredits the system’s over all